Protests have been sparked across Iran over the last few days following the upcoming imposition of US sanctions. The immense impact they will have on the already drowning Iranian economy has caused thousands of Iranians to take to the streets in the last few days. The US is re-imposing sanctions on Iran, a second shocking move that follows Trump’s decision to withdraw from the US-Iran ‘Nuclear Deal’, officially known as the JCPOA (Joint Comprehensive Plan of Action). Up to one million Iranians face unemployment due to the sanctions, and the value of Iranian currency has fallen by a dramatic 80 per cent in the last few months. Security forces have responded with violent force, including the use of water cannons, tear gas and rubber bullets to stop the crowds in their tracks and discourage further dissent.
Protests
People in cities across Iran including; Isfahan, Tehran, and Karaj have taken to the streets to express anger at the decision and its potential impact on daily life. Hundreds of others also protested in cities such as Shiraz and Qom. Protests are said to have now spread to over 10 cities in Iran, marking the widest spread unrest since the protests of January, in which up to 25 people died.
An unemployment rate of 11.9 percent (as per 2017 World Bank figures), and the devaluation of currency (Iranian Rial) by nearly two thirds, has seen thousands take to the streets in protest. Dissent is aimed at the government as well as Iranian religious authorities, with some protests seeming to be well-organised, and others taking place more sporadically.
A religious seminary was also reported to have been attacked by protesters in Eshtehard, 100 km west of Tehran, causing 500 trainee clerics to flee. Some have called for the fall of the Ayatollah Khameini, with others calling for the return of the Shah – a nostalgic feeling often echoed in times of political unrest in Iran.
Amid the protests the Iranian people have responded to the crisis by stockpiling supplies of gold bars, and gold coins and many have hit shops to stock up on essentials such as food, demonstrating their uncertainty of the immediate future. More protests are expected to break out immediately after the sanctions are implemented on 7 August.
The Nuclear Deal gone wrong
In May this year President Trump pulled out of the JCPOA (Joint Comprehensive Plan of Action) a bill that was set to create a long-lasting diplomatic solution to escalating tensions between the US and Iran.
The JCPOA is an agreement between Iran and the P5+1 permanent members of the UN security council (US, UK, France, Russia, China and Germany – the +1) alongside the EU. Agreed in 2015, the deal was seen as a breakthrough; it allowed the US to enhance security measures in relation to Iran’s proliferation of nuclear arms. Under this agreement Iran agreed to reduce and eliminate some stockpiles of uranium as well as reduce production facilities, thereby reducing risks of proliferation.
Sanctions
Th US withdrawal from the JCPOA in May this year, has caused disruption and condemnation from the EU and the UK. In another controversial move, the US decided to reimpose sanctions on Iran. The sanctions will be on ‘Iran’s purchase of US dollars, trade in gold and precious metals and its dealings with metals, coal and industrial-related software. Sanctions will also be reapplied to US imports of Iranian carpets and foodstuffs and on certain related financial transactions.’
Sanctions are set to be imposed on 7 August, and the US intends them to be, not only firm, but also far-reaching. The official call from Washington has stated that other countries must also stop importing Iranian oil by November or face economic consequences themselves. These measures require buyers of Iranian oil to stop their purchases by November, or face being excluded from the American financial system.
This threateningly tough measure has not been received well by the international community. China have said that they will not increase their purchases from Iran, however will not stop them either. China are happy to continue cooperating with Iran and continue to pay for Iranian oil imports in Chinese yuan.
The EU has released a statement effectively blocking the US sanctions for EU businesses carrying out trade with Iran. Federica Mogherini, the EU’s high representative for foreign affairs said,
“We deeply regret the re-imposition of sanctions by the U.S., due to the latter’s withdrawal from the Joint Comprehensive Plan of Action,”
The EU’s Blocking Statute automatically goes into operation on the 7 August ‘to mitigate their impact (the sanctions) on the interests of EU companies doing legitimate business in Iran.’ It allows those within the EU to recover damages due to the US sanctions. It also forbids those within the EU from complying with those sanctions.
The EU has reemphasised its position in support of the JCPOA, calling on the US to reconsider its position on the sanctions as well as to think seriously about re-entering the JCPOA agreement.
The UK Foreign and Commonwealth Office and the Foreign Secretary Jeremy Hunt released a joint statement on the matter that concluded,
‘Preserving the nuclear deal with Iran is a matter of respecting international agreements and a matter of international security.’
Impact of sanctions on the Iranian people
The impact of these sanctions will be immense on Iran’s economy. They are estimated to cause a drop in oil production from 2.4 million barrels per day to as low as 700,000 by the end of the year, but the overall and individual consequences on the people of Iran will be even more destructive. Iran’s labour ministry reports that one million Iranians could lose their jobs as a result of the impending US sanctions.
Despite the EU’s promises to protect European businesses from the impact of sanctions, these promises cannot be guaranteed. Earlier this year multinationals such as, TOTAL, Siemens, Peugeot, and Boeing had already decided to cease or limit trading with Iran.
But it is not the multinational corporations that suffers the most, it is the people of Iran. Individuals such as Hassan Seyedi, a broker at the Alaedine electronics bazaar in Tehran, who joined the protest because his small business is inevitably suffering. He told the New York Times,
“We filmed and took selfies; the second day we went out again,” Mr. Seyedi said. But now he was back in his small shop, where he pays a monthly rent of more than $3,100. “I can’t afford to protest too long,” he said. “I need to make any money I can.”
When sanctions were first announced other Iranians spoke of their financial concerns. Ali Shoja, a cleaner who could not afford to support his family.
“I used to be a driver, now I clean. What’s next? I cannot become a beggar.” (New York Times, May 2018)
His sentiments then echo those of many in Iran now facing the first step towards the newly implemented sanctions. The reinstatement of the US in the JCPOA could be a solution to the issues in the short term, but with a Trump presidency still in play, many wonder if there could ever be a diplomatic solution to tensions between Iran and the US.
The EU has made its stance clear by issuing the Blocking Statute, but the international community as a whole should take a clear stance on its role in the sanctioning of Iran. If they comply with the demands from the US, Iran could be subject to its worst economic crisis in many years. If they do not comply and continue to trade with Iran after the sanctions, the US then stands to break financial ties with a number of key players on the international stage.