Last week, Iran’s currency, the rial, lost more than 30 percent of its value against the U.S. dollar. Iran has experienced exchange rate volatility before, but last week’s drop was enough to prompt widespread protests by more than 10,000 merchants. The currency drop is just one more chapter for a political system that can best be described as circus-like.
In addition to jolting economic and security events, Iran is accustomed to a politics of illusion and mirage; political relationships are often not as they may seem on the surface. True, even established liberal democracies have moments of political surprise and subterfuge. In Iran, though, a system dominated by a council of Islamic clerics is a hall of mirrors for average citizens and expert observers alike.
To what extent are the economic policies of President Mahmoud Ahmadinejad responsible for the slide in the Iranian currency? To what extent are international economic sanctions fomenting macro-economic crisis? How free is Ahmadinejad’s government to pursue its own course on domestic economic issues? How much patience will (younger) Iranians have with the supreme council of clerics? Have ruling elites over-played their hand in pushing the domestic economy to the brink over its nuclear program?
Various Iranian experts do not believe that the country is facing an imminent political revolution. These experts argue that continued exports of energy, an increasingly effective clampdown on the Internet, and the formidable coercive power of the Iranian Revolutionary guard provide the regime enough resources to survive. As in so many other cases, regime change in Iran may ultimately rest on the question of the loyalty of the government’s soldiers.