Gwynne Dyer: Despite currency crisis, there's no panic in Iran

Iran’s currency virtually collapsed last week, and the public protests that followed in Tehran stirred memories of the massive anti-regime protests of 2009. This has caused excited speculation in the United States and its allies about the imminent fall of President Mahmoud Ahmadinejad, the abandonment of Iran’s uranium enrichment program, or even the end of the whole Islamic regime. Don’t hold your breath.

Ahmadinejad blamed the currency crisis on the foreign sanctions that are crippling Iran’s trade, of course. His critics at home just blamed him: “The smaller part of the problem relates to sanctions while 80 percent of the problem is rooted in the government's mistaken policies,” said Ali Larijani, the speaker of the Iranian parliament. But he would say that, wouldn’t he?

It’s true that Ahmadinejad has used the country’s large oil revenues to paper over some serious mistakes in running Iran’s economy, but the current crisis was caused by a steep fall in those revenues— which is directly due to the sanctions.

Four rounds of United Nations-backed trade sanctions, ostensibly meant to stop Iran from developing nuclear weapons, had already cut the country’s oil exports from 2.5 million barrels a day to 1.5 million barrels a day by early this year.

Then came new American sanctions that blocked any international bank doing business in Iran from access to the immense U.S. market—so most of them ended their dealings with Iran.

In July came new European Union sanctions banning oil imports from Iran entirely. Since Europe was taking one-fifth of Iran’s remaining oil exports, that blow was enough to send the Iranian rial into free-fall.

Until 2009, the rate of exchange was fairly stable at about 10,000 rials to the dollar. Then it started to fall slowly, and then faster— and in a hectic few days last week, it tumbled a further 40 percent to a low of 35,000 rials to the dollar. That was when the protests began in Tehran’s Grand Bazaar, whose merchants were amongst the strongest supporters of the revolution in 1979.

The protests were contained without any deaths, and the shops in the bazaar are now open again. The rial has recovered slightly, stabilizing at around 28,000 to the dollar. But that is one-third of what it was worth three years ago, and the effects are being felt in almost every household in the country. Formerly comfortable middle-class families are scrambling to put food on the table, and the poor are really suffering.

So the sanctions are working, in the sense that they are hurting people. But what are they accomplishing in terms of their stated purpose of forcing Iran to abandon its nuclear weapons programme? More importantly, perhaps, what are they achieving in terms of their unstated purpose: triggering an uprising that overthrows the whole Islamic regime?

First of all, Iran doesn’t have a nuclear weapons programme. The International Atomic Energy Agency (IAEA) and the U.S. and Israeli intelligence service are all agreed on that, although the public debate on the issue generally assumes the contrary. Iran says it is developing its ability to enrich uranium fuel for use in reactors, which is perfectly legal under the Nuclear Non-Proliferation Treaty.

It’s true that the same technologies give the owner the ability to enrich uranium further, to weapons grade, and there is good reason to think that Iran wants that capability. It’s probably not planning to make nuclear weapons now, but it does want that “threshold capability” in case things get really bad in the region and it needs a nuclear deterrent in a hurry.

A “threshold nuclear weapons capability” (but no nuclear weapons) is still not illegal. Other countries with enrichment facilities include Argentina, Brazil, Germany, Japan, and the Netherlands. Moreover, Iran’s stock of reactor-grade enriched uranium is under permanent IAEA supervision, and alarms would go off instantly if it started to upgrade that stock to weapons grade.

Israel’s current government has talked itself into a state of existential panic over Iran’s uranium enrichment programme, but the U.S. government certainly doesn’t believe that Iran has any immediate plans to build nuclear weapons. So what are these sanctions really about?

Overthrowing the Iranian regime, of course. American sanctions against Iran long predate any concerns about Iranian nuclear weapons, and would not be ended even if Iran stopped all work on uranium enrichment tomorrow. The U.S. legislation that imposes the sanctions makes that very clear.

Before sanctions are lifted, the president must certify to Congress that Iran has “released all political prisoners and detainees; ceased its...violence and abuse of Iranian citizens engaging in peaceful political activity; investigated the killings and abuse of peaceful political activists...and prosecuted those responsible; and made progress toward establishing an independent judiciary.” In other words, it must dismantle the regime.

Since stopping the enrichment program would not end the sanctions, why would the Iranian government even consider doing so? And will the Iranian people rise up and overthrow the regime because sanctions are making their daily lives very difficult? Even anti-regime Iranians are proud and patriotic people, and the likelihood that they will yield to foreign pressures in that way is approximately zero.

Comments (16) Add New Comment
Farid
Gwynne has no idea what she is writing about. She should have talked to those who are having their expensive homes foreclosed here in Canada and going back. As for the IAEA, they have accused Iran of hiding their nuclear activity and cleaning sites that were used for explosives, so why would they do that if they had no Nuclear program?
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freeiran
i think Ahmadinejad himself will overthrow corrupt mullahs and their appointees.
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SPY vs SPY
Farid,

I strongly suggest that you take a peek under Gwyne's Jalaba, he has a DONG, which in Western Culture, makes him a HE.

Israel, the Israeli Likud Party and the USA Republican Party LOVE WAR.

WAR is good business for these 2 Political parties and very profitable for their Corporate and Financial Supporters / Owners.

Israel wants WAR WITH IRAN, so that everyone will be distracted from the issue, of the Complete and Permanent Extinction of the Palestinian People.

Israel wants the Global Community to look the other way, when Israel starts its final phase ,which is to eradicate any idea what so ever, that there could ever be a Palestinian State.

War with Iran, will be the beginning of The Final Solution to the Palestinian Problem.

And that is all there is to this story.
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Issac Chandler
Did American sanctions against Iraq killed more children than the war?
The true reason US fears Iranian nukes: they can deter US attacks:
http://m.guardian.co.uk/commentisfree/2012/oct/02/iran-nukes-deterrence?...


The US is considering a nuclear strike because Americans have no appetite for war with Iran:
http://en.m.wikipedia.org/wiki/Philip_Giraldi#section_3
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Anton
Farid : Gwynne Dyer is a man..
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Pat Crowe
No she's not Anton. She's a history, teacher chick with a beard.
And SHE owes me MONEY!
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JMW
I think that Mr. Dyer is being a little too simplistic in his analysis. He's completely ignoring the domestic political pressures in the USA that initiated and sustain the sanctions against Iran.

Yes, the sanctions have little to do with the so-called threat of Iran with nuclear weapons. But the purpose is not to overthrow the Iranian regime, but to win domestic political points in the US by being seen to support Israel.

If there is one thing I've learned about politics, especially right-wing nationalist politics, it is this: politicians have learned that Iranians do not vote in American elections, and Americans do not vote in Iranian elections. Therefore, American politicians and Iranian politicians are free to say whatever they damn well please to whip up voters in their own country, and the politicians literally do not care what the international impact is of their election-cycle hyperbole.

That's why you get Reagan talking about Evil Empires, and Bush Jr talking about the "Axis of Evil", and Ahmadinejad talking about the "Great Satan". It's all for domestic consumption so they can get elected, and to hell with what the rest of the world thinks.
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anonymouse1962
Yeah, and she owns a leather jacket that she never took off for about 20 years!
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johnny_b_goode
first off: freeiran, the clerics have the power, not the president. He is useful to them, and when they tire of him, they will find another tool to take his place when the political winds change. The crazy shit Ahmadinejad has said over the years has been a perfect distraction from the corrupt aging swine that are the Ayatollahs.

I also do not believe all of Israel wants agression with Iran and the extermination of Palestinians, nor do I think they could get away with it. Don't forget that the Likud party are a pretty far right faction that do not represent a majority of the electorate; they are just really good at maneuvering and manipulating the parliament to achieve their goals.

Like usual, Gwynne is probably right. It's not like he has his finger on the pulse of the nation, he's just got a lot of history and personal experience to draw from to make good guesses.

Also, I can back up what he says about the attitude of Iranian citizens being generally right. I went to college in Vancouver with tons of children of Iranian expats, and most of them consider their government to be an embarassment. Don't forget that the much more cosmopolitan, secular young generation coming of age there is already larger than their elders and will gain power by default as they enter their 30's and 40's.

So how does this play out? Simple. I think change and renewal will come to Iran the same way it came to the Chicago Blackhawks; when the miserable old bastard(s) in charge die out.
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petr aardvark
part of the history that is rarely talked about is the 1954 coup that the CIA organized in Iran which overthrew a democratically elected president and installed the shah. All because the Iranians got uppity about wanting to control and get a decent price for their oil. So there is a history of dislike for the US, however a number of Iranian people I've met in Canada and abroad, pretty much all say that the young generation is not interested in the Islamic republic (I'm talking about the 90s so this is probably the current generation now) They really would rather just have a western lifestyle. Whether or not they are willing to rise up or not, I'm not sure - they did try in 2009. And despite Iran being a police state -to some extent the elections in Iran are real though limited. That is much more than the rest of the middle east (pre-Arab spring) has been doing.
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Jody
Farid, she is a he- do some back ground research before making a statement.
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Double Deuce Dave
Frankly I've always been more worried about Israel having nukes. They've intended on using them more than once and they gave birth to modern pre-emptive war.
The whole debate around Iran is overblown and ridiculous. The Iranian people have more justification for fear and loathing than any western countries' population. They are threatened with invasion regularly, their economy is endlessly tampered with, to the point of causing 35%+ inflation, they are told that they can't have any nuclear ambitions (much like telling a teenage girl they can't date the douchebag boyfriend), Iranian
politicians and police are a bunch of douche-tards and their neighbourhood is full of a bunch of prick-jobs.
Nobody holds a grudge like the US of A. Perhaps Iran and Cuba could start a support network for all those countries that feel like they've been cut-off from the US' benevolence.
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Critical thought
Gynnebag Dyer has zero credibility.

If he thinks Israel is more of a threat than Iran he should stop smoking drugs. This s the same "brilliant" scholar who scoffed when Israel claimed that Sudan was a dangerous l when commenting that Israel's statement that it is surrounded by dangerous neighbours. Sudan has perpetrated the worst mass extermination since WW2. There is no doubt that he (like Fisk) has no credibility because he is blinded by his ant-American, anti-Israel bias (like so many PC commentators). Look at the undisputed facts. Iran is a fascist, theocratic oligarchy that brutalizes it's citizens and has openly threatened Israel with annihilation while publically ridiculing it's roots not to mention the Holocaust (but Iran is not racist.) Iran has refused to co-operate with nuclear inspectors and moved its program underground. Furthermore it has accelerated the enrichment program while publically bragging about its long range missiles capable of carrying payloads. (could they mean nuclear payloads Duh?). So why on earth should we believe them? History has shown that when brutal dictators threaten other nations with extinction we should take them at their word. To do otherwise would be stupid at best or as Gynne has demonstrated intellectually dishonest.
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Mosby
That Iran's oil exports have decreased by 1 million barrels a day this year is actually very good news for Iran in the long run because it forces other oil exporters to use up their reserves even faster in trying to satisfy current energy demand.
By leaving the oil in the ground, Iran is -- in effect -- stockpiling a million barrels a day for use down the road when other exporters have no more oil available for export and the price of oil zooms into the stratosphere.
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nitroglycol
Uh, "Critical thought", I think you may be confusing what Dyer said with what Double Deuce Dave said. Where did Dyer suggest that Israel is more dangerous than Iran?

If you want to live up to your nickname, it would help to read the material you're criticizing, otherwise you have close to zero credibility yourself.
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Mohsen
Extremely simplistic and nuanceless analysis by Gwynne Dyer.

Any Iranian can tell you that the country is awash in oil and gas. Power generation by gas costs about 1/3 the cost of power generation by nuclear plants -- in advanced countries. In underdeveloped countries, the differential is even greater. Gas is about 5 time cheaper.

So Gwynne thinks that Iran needs nuclear powered by enriched uranium. Some simpleton, and typical Gramsci cultural leftist who will back any tyrant that screams 'death to imperialism', in particular if it is an Islamic tyrant.
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