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Iran in Convulsion (the Death Spiral Continues)

Michael Ledeen
2nd January 2012 - Faster, Please!

Big news today from Iran, confirming once again that the hapless regime in Tehran proceeds down its death spiral. The first is the spectacular collapse of the national currency, which has lost 35% of its value since September. The second headline, in an extraordinary press conference by the effective commander of the revolutionary guards, is the admission that the incarcerated leaders of the green movement have so much powerful support that the regime dares not prosecute them.

The crash of the rial him has been linked to the latest round of sanctions, the ones aimed against the Iranian central bank. These are, at least for the moment, unilateral American sanctions, but their import is global, since they are aimed at anyone doing business in Iran’s oil sector. Those transactions invariably go through the central bank, and the American sanctions confront would-be purchasers of Iranian crude oil with an unpleasant choice: either do business with America or do business with Iran.

The ayatollahs, in their usual blustery way, have pooh-poohed the effect of the sanctions, insisting that Iran is so strong that even such harsh measures will have little effect.  But nobody in Iran believes that.  There are long lines at the money changers, and one leading government supporter puts the matter in chilling perspective:   Iranian industry “cannot continue to exist” with the rial at today’s level.

As the Washington Post’s man in Tehran says, this is a devastating blow to the regime, both because it further exposes their inability to cope with the Great Satan—whose destruction, after all, is the core mission of the Islamic Republic—and because the Iranian people know that their oppressors are making  out like bandits, as Treasury Undersecretary David Cohen explains:

The 39 percent difference between the central bank’s official rate and market rates on Dec. 21 was the largest in almost two decades, economists in Tehran and Washington said in interviews.

U.S. Treasury Undersecretary David Cohen said the gap between the two rates has provided an arbitrage opportunity exploited by officials and businesses affiliated with the IRGC, the elite military arm that’s under international sanctions for suspected nuclear weapons work and terrorism. They are among regime elements able to obtain foreign currency at the favorable official exchange rate and sell it for a profit in exchange bureaus at the market rate, he told the Senate Foreign Relations Committee in written testimony Dec. 1.

“Ordinary Iranians are urgently seeking out foreign currency such as dollars or euros for safety, yet they are having trouble accessing hard currency, and when they can, they have to pay the unofficial market rate,” said Cohen, the Treasury undersecretary for terrorism and financial intelligence.

There are stories from Tehran about people desperately trying to buy commodities, from gold to steel,  about people selling cars and motorcycles to get cash they can convert to hard currency, and, inevitably, about people offering their kidneys for sale (a story we’ve heard about desperate people everywhere from Africa to China.  Is it true?).

So the regime is failing to meet the basic needs of the Iranian people (nothing really new there; strikers at the Shiraz Telecommunications Factory haven’t been paid for 26 months), and the people don’t like it.

This debacle coincides with an amazing confession of weakness from the highest level of the regime:  Ali Saeedi is the supreme leader’s representative to the Revolutionary Guards, and since Supreme Leader Ali Khamenei commands the Guards, Saeedi’s words are authoritative.  Asked why Mir Hossein Mousavi and Mehdi Karroubi–the two Green Movement leaders who have been held in isolation for more than ten months—Saeedi publicly stated that it can’t be done, because the two have such powerful support. The opposition leaders can’t be prosecuted, he said,  “because they have supporters and followers” as well as “a few turban-heads [clerics] who continue to back elements within the sedition.”

Indeed, Karroubi’s wife has been released from captivity, and she communicates her husband’s thoughts to the Green Movement.  Most recently, this consisted of instructions to boycott the upcoming parliamentary elections, scheduled for March.  This is yet another direct challenge to Khamenei, who has always boasted (often falsely) that Iranian elections produce huge turnouts.

Those who believe the Green Movement has been crushed need to reflect on these developments, which seem to me to prove the opposite:  the regime fears the movement, doesn’t dare take decisive action against its leaders, and faces further protests against a background of mounting failure.

And yet, Khamenei’s killers continue to attack us in Iraq and Afghanistan, and we still have not openly supported his opponents, any more than we have supported Assad’s opponents in Syria.  How many Americans have to die at the hands of this wicked regime before we help the Iranian and Syrian people put an end to their long national agony?

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