Anti-government protests have led to widespread unrest in Iran. CFR Senior Fellows Philip H. Gordon, Ray Takeyh, and Amy Myers Jaffe will discuss the significance of these protests and how the United States should respond.
JAFFE: Thank you very much. Well, I want to welcome everybody and thank you for participating on such a stormy weather day, if you’re in the U.S. northeast, or for those who are calling in from the national program welcome as well. I’m Amy Myers Jaffe. I am the David M. Rubenstein fellow—senior fellow for energy and environment here at the Council, and the director of the program on energy security and climate change.
We are looking forward to discussing with you today the events in Iran. They have got the attention of my group because it has pushed oil prices to levels not seen for several years. So everybody’s watching very closely the events. We have two great speakers today for this call. I want to mention that it is an on-the-record call, and that a transcript of the entire session will be posted at CFR.org later today, and also to tell our participants that there are additional resources on this subject that are available on the CFR website today.
We have two great speakers who’ll give differing perspectives on not only what’s happening in Iran, but what the United States response should be. Philip Gordon is the Mary and David Boies senior fellow on U.S. foreign policy. He was formerly special assistant and White House coordinator for the Middle East, North Africa, and the Gulf between 2013 and 2015, with responsibilities that included the Iran nuclear deal. Ray Takeyh is the Hasib J. Sabbagh senior fellow for the Middle East studies—for Middle East studies. Also author of a fantastic book, Guardians of the Revolution.
So I’m going to ask each of our speakers to give their view on the—on what’s taking place in Iran. And then we will have a little discussion among ourselves. And then we will open it up to you, the participants, to ask questions. So let me start, first, with you, Phil.
GORDON: Great. Thanks, Amy. And thanks to everyone for joining.
I will start with what I guess I would say we think we know is going on, because I want to actually begin with the caveat that, you know, obviously, we are not in Iran. Information is limited. And in these cases, you know, it’s always hard to know exactly what is developing. Iran is a big and diverse place and these protests are big and diverse too.
But what I think we know is that around December 28th people started to protest, beginning in the northern Iranian city of Mashhad, which is the second-largest city in Iran, a city of some 3 million people. And those protests seem to be mostly economic in nature. People seem to be fed up—and these are mostly working-class people we’re talking about—with their economic plight. Inflation, which has been double-digit in Iran for a number of years, people have made specific records to—references to eggs. There was a poultry issue and the price of eggs in particular skyrocketed. But just general prices rising. Unemployment, which is around 13 percent in Iran nationally but up to 40 percent among the youth population. And so people are very frustrated with their economic plight at a time when they see a government which has plenty of money for what it wants to do and is perceived to be corrupt in spending what these people feel like is their money on the wrong things.
So these protests start there. And then they start—they have spread over the last week or so to dozens of other Iranian towns and cities. And as they have spread, they have seemed to take on a larger political element. Again, caveat, it’s always hard to figure out what thousands of people are doing. And you can overread anecdotes. But intermingled with these protesters are now not just complaints about the price of food, but chants about their political leadership including, you know, some pretty harsh ones about death to the supreme leader and Iran should be working for Iranians and not Syria and Lebanon. In other words, even a foreign policy aspect to the protests.
I would add to that, links mostly to the economic piece, that they also seem to have been produced by a big gap between their expectations and the reality. And we see this in other protest movements as well. People protest not just when they’re poor—and there are a lot of poor people around the world who aren’t protesting—but when they have reason to believe or had reason to believe that their living standards were going to rise. And that would be the link you could make to the lifting of sanctions in the context of the nuclear deal. The deal gets done in 2015, sanctions are lifted, they have an election of their president who promised because of the deal would deliver a higher living standard, and that hasn’t happened. Both I think in part—in reality, the deal has not led to the investment and significant oil revenues that they hoped would translate into a better life for the population, but also just in terms of the inflated expectations. It was oversold in Iran. And I think that has really led to frustration among these people who, again, leaders who seem to have plenty of money and plenty of money to spend abroad, but not on them.
So that is, I think, a basic, as far as I understand it—we’ll see what Ray has to add to that—understanding of what’s going on. We know that more than 20 people have been killed. There have been counter-protests by regime supporters, or at least organized by the regime, shown widely on state—the sponsored media. We know there have been efforts by the regime to block social media, including the Telegram system that protesters use to communicate with each other.
I would describe the regime’s reaction so far—and, by the way, I think the regime was taken by surprise here. I think most people were, at least in the timing, and weren’t ready for this, which may explain what has so far been a pretty light touch in terms of their response. There hasn’t really been a violent crackdown yet. And that’s because, I think, in part, they were taken by surprise. But also, in part, they’re hoping this peters out on its own so that they don’t have to use force. But I’m sure we’ll get to this. It seems to me fair to assume that if they have to, they will.
And then I guess last thing I would say—and I’m sure we’ll turn to U.S. policy and recommendations for U.S. policy—the U.S. has been weighing in. The president, the vice president and others being pretty clear that we stand by the protesters. I think you may have seen the vice president’s piece in The Washington Post today, sort of outlining the administration policy. And the most significant tweets, at least by the president have underscored what he says, it’s time for change in Iran. And he has promised great support from the United States. So I’m sure we’ll turn to all that, but why don’t I stop there, as least for now. Thanks.
JAFFE: OK. Ray, if you would elaborate. And your piece in Politico really spelled out how you think these protests might lead to the end of President Rouhani’s rule, and sort of a reconsolidation of kleptocracy in Iran. If you’d like to elaborate on that, and also give you sense of what you think is driving the protests.
TAKEYH: Sure. I think Phil touched on it. I don’t have much to add to his description of the genesis of these protests, except a few things. And one of the things you see in the location of these protests, sometimes the larger theme of economic distress is married to local grievances. For instance, in a lot of these protest areas, they tend be more of ethnic—some ethnic minorities. For instance, Lorestan, there are a lot of ethnic minorities and they have had their own grievances, the Kurdish population with its grievances.
So there are some local grievances that are being dovetailed to this national message of economic distress. In a place like Kermanshah that was recently subject to an earthquake, subsequent to the earthquake it became apparent that the building codes were not up to snuff because the inspectors were being bribed by the homeowners—by the real estate owner. And subsequently the level of reconstruction that Tehran had promised was not being delivered, or was being siphoned onto corruption. So you begin to see some of these local grievances also being married to this larger issue of those macroeconomic factors that I think Phil touched on.
Now, President Rouhani is really the third president in a row whose presidency is being crippled by an uprising. This happened actually to President Khatami with the student uprisings in 1999. After that, he was really a spent force. He continued in office, but he was essentially curtailed from having much initiative. Actually, President Ahmadinejad’s presidency also became really crippled after the Green Movement in June of 2009. And the remainder of his presidency he was more of an inconsequential figure that he had been in the first term. I think President Rouhani is going to experience the same thing. His presidency is now a crippled one. And what happens now is the focus and the power will shift further to the more conservative sectors of the Iranian body politics, particularly the office of the supreme leader.
There has been an ongoing debate between the president and the supreme leader. And not just between this president and this supreme leader, but Ali Khamenei has had this problem with his previous presidents. Namely, Ali Khamenei has had a vision of economy which, as was mentioned, is called an economy of resistance. It doesn’t make much sense to me, but essentially it’s one that suggests that Iran should rely on local markets, its own internal markets, and the local regional markets—Afghanistan, Central Asia, Iraq, and likeminded states, whoever they are—and essentially, abjure sort of Western commerce and foreign investment.
I think for the supreme leader, and many within the conservative movement who are enchanted by notions of self-sufficiency and self-reliance, the application of the sanctions over the—between the years 2005 to 2015 was an indication how vulnerable their country can become to international pressure stimulated by the Western powers. And essentially, he always thought that an economy that’s isolated from abroad—abroad being particularly the Western societies—that would be beneficial. There has always been a discussion in Iran about what they called an eastern orientation, namely in addition to local markets and the region we can have relationship with China and some of the east—Russia and those countries—and not necessarily the European, or certainly not American states.
President Rouhani thought that actually perhaps the economy could be stimulated by international investments and foreign investments. And for that reason, he required an arms control agreement to lift those sanctions. And some of those commerce did come back. The economy did turn around from 2013. I think according to the IMF figures, the economy grew about 6 ½ percent last year, and about—it was projected to grow, I think, by 3 ½ percent this coming fiscal coming year.
But that’s only one side of it. The class cleavages in Iran have become even more pronounced during the Rouhani presidency. The rich have gotten richer and the poor have gotten poorer. That’s not exclusive to Iran. We hear about problems of wage stagnation and sort of a disparity in wealth allocation in other countries, including the United States. But that has become particularly glaring with the problems of corruption. Again, President Rouhani is not the first president to suffer from corruption. Iran has been corrupt, not just during the monarchy but certainly in the post-monarchy period during the Islamic Republic. But it’s becoming even more glaring because of the unemployment and underemployment figures, inflation and so forth.
So from that one, I suspect the regime will move, should it survive these protests—which I suspect it will—into much more of a consolidated, hawkish, right-wing government. These protests are unique. I think it was mentioned, they have lasted longer. They present a really unique challenge to the regime, because it comes from a segment of the public that the regime has thought was its backbone—the working class and the lower classes, and even from the religious classes. And this is—essentially was supposed to be the backbone of the regime, as opposed to the middle-class element and upper classes, who were much more enchanted by political liberalization.
I think one of the reasons the regime is trying to deal with these demonstrations by using law enforcement as opposed to the Revolutionary Guards and others is because at the end of the day the Revolutionary Guards are conscript army. And to deploy conscripts at this particular place, at this particular time, to repress these kind of demonstrators is kind of a scary thought for the regime. In 2009, you can get a conscript to beat up a university student, because the class differences and class resentments between them was so great. In these particular protests, the socioeconomic bonds between the conscripts and protesters are much closer. They come from the same neighborhoods. They come from the same places. And they come from the same backgrounds. And I think that’s been one of the reasons why the regime is hesitant to deploy the kind of force that it might otherwise be tempted to do.
Ali Khamenei and the regime’s perception of protest is always you suppress quickly, and decisively, and immediately, because otherwise there’s a threat of contagion. And the fact that they haven’t done this in this particular case leads me to believe that they’re concerned about the reliability of their security forces. And if those security forces are deployed and they don’t do what the regime wants them to do, and that becomes very problematic for the regime and its survival because it essentially demystifies its coercive power. And I think, as Phil suggested, they’re hoping these things peter out.
But moving forward, I think the regime has lost, or at least appears to have lost, from what we see, one of its most important constituencies and is fearful of its own security services. And this is not a formula—and doesn’t really have theocracy with a human face to offer. The reformists have been excised and discredited. And now you see the pragmatists and centrists suffering probably the same predicament as the reformists did in 1999. So all I can say is, moving forward, I suspect uneasy life ahead for the regime.
JAFFE: Very good. So I’m going to sort of bring in just briefly an oil angle, and then ask Ray and Phil to comment on that. So the oil market started going up, and then many commentators came on and said: Well, this isn’t going to be like 1979. And that caused everybody to think about what happened in 1979, which was a prolonged period of protests for months where eventually, as the regime cracked down on the protesters and started shooting people, Ray, we got the kind of thing that you’re describing where the security forces started to side with the protesters and it became more chaotic. And then eventually, the oil workers started to go on strike and deny fuel to the military to have vehicles and so forth that they could use to suppress the population. And we all know how this story ended. Eventually the oil workers walked off the job, oil exports went to zero, and the shah was forced to step down.
So it was a very lengthy process. And so it didn’t seem like oil was actually an immediate threat now because these protests, as you say, are spread across the country. But you—as you mentioned, there are some driving forces that involve ethnic minorities. And the general media has not picked up so much the fact that in Khuzestan, which is a big oil producing region of Iran that has an Arab minority population, there has been several attacks on oil installations. Nothing that would at this point interfere with exports, but there’s been a lot of swirl around that. There was an Arab separatist leader who had called on his followers to blow up oil-related facilities. Was gunned down in Europe at the end of last year. And then there was sort of this counter-sabotage in Bahrain against the oil pipeline that brings oil from Saudi Arabia to Bahrain for Bahrain to refine for its fuel.
So there has been this sort of escalation in ethnic tensions targeting oil. And so I think it’s not 100 percent not an oil story. But it does raise this question with these different regions and sort of the nature of the broader kind of protest—so, like you say, not urban elite in Tehran—how much harder it’s going to be for this government moving forward. And so therefore I ask the question—you know, given the fact that minorities are involved, and we’ve already had instability in the region and complication coming from the Kurdish desire for autonomy, how do you see this playing—Phil and Ray, how do you see this playing out for the U.S. in terms of its policy, the difficulty of having a cohesive policy towards Iran at this time?
GORDON: Do you want me to start with that, Amy?
JAFFE: Yeah, why don’t you go ahead, Phil.
GORDON: Let me just briefly. I think—well, two things. The oil market, as everybody knows, in recent years has been quite impervious, even to geopolitical developments in the Middle East, I think to the surprise of many. You know, we’ve had these great Saudi-Iranian tensions and obviously a big war in Syria with spillover and refugees in the neighbors, and a Kurdistan referendum, threat of independence, and the war in Libya, and the war in Yemen. And yet, all along oil prices have continued to fall or remain stagnant. And nothing we’ve seen—even, you know, the burning of the Saudi embassy in Tehran and all these tensions—have significantly affected the price, for reasons that Amy knows all too well and we won’t get into here, with U.S. shale and the fragility of OPEC.
And so if the question is now could this be different, I would think that conclusion would be premature, especially in terms of the protest angle, because I think we’re a long way from—I mean, anything’s possible. And we’ll probably get to that in the call. Who knows how this plays out? But I think we’re a long way from these protests really leading to, you know, the breakup of Iran, or a Syria-like situation that would significantly affect Iranian production, let alone anybody else’s. I suppose it could in an indirect way lead to the ending of the nuclear deal, which would affect Iran’s oil sales and production.
And, you know, that could come if the protests make the U.S. even more likely to end the deal by not continuing to waive sanctions, and Iran resumes its nuclear program, and then you get secondary sanctions put in. I suppose that could take Iranian oil off the market and affect the oil price. But again, we’re not—we’re not there yet, and we’re certainly not to a place where Iran is destabilized by these protests, although we could get there. So I don’t think that—I mean, that’s obviously worth watching, but I don’t think we’re there yet. I would be, in terms of oil price, more focused on and concerned about the implications of Saudi-Iranian conflict and competition, even aside from the protests.
And what we’ve seen with Iranian support for the Houthis and ballistic missiles being fired at Riyadh and, you know, getting back to your point, Amy, about, you know, things blowing up and minorities being played with, the growing Saudi impatience and intolerance of Iran’s expansionist policies in the region. If they start responding by meddling in Iran the way that Iran was meddling in regional Arab states, then I think we could start to see some real geopolitical trouble. But that is actually a risk and a concern quite apart from the protests that we’re seeing now.
JAFFE: Ray, you want to weigh in?
TAKEYH: I don’t have much to add to that. I would say that in terms of Iran’s own oil industry—and one of the things that usually these protest movements like this follow, if they in fact endure, is call for industrial strikes and so forth. And that happened in 1979 revolution. But even in that context, the oil industry was one of the last to actually participate in such national strikes that essentially crippled the shah’s financial muscle. I mean, I don’t think we’re there yet. If these demonstrations persist and enlarge and so forth, and if they transform into not just acts of protests but acts of national strikes and so forth, then I suspect the oil industry may be affected with its own complementary strikes. But I think we’re a ways away from that. And my guess is we won’t get there at this occasion.
JAFFE: Very good. OK. At this point now I think we’re ready to ask our participants on the line if they have their own questions they’d like to queue up. Let me ask you, let me remind you, this is an on-the-record call. And transcripts will be posted. And also, let me ask all participants to keep your questions short and direct. And if you’d like to address them to a particular expert, please feel free to do so when you ask your question.
OPERATOR: At this time we’ll open the floor for questions.
(Gives queuing instructions.)
The first question will come from Stewart Ain from New York Jewish Week.
Q: Hi. Thanks for doing this. Just last week, before the demonstrations started, there was a desecration of two synagogues in Shiraz. Can you—and there were also reports that some Jews were arrested. Can you shed light, did that have anything to do with what’s going on now? And were those Jews arrested? And can you clarify on what’s going on?
TAKEYH: Yeah, I just—I don’t know about that particular episode, so I can’t really speak about it in an informed way. But I’m not quite sure if that episode touched off this particular sort of wave of national protest that we see. I don’t think so.
JAFFE: And I would add to that, that there is probably a general sensitivity because there is funding coming into parts of Iran for Arab separatists or Kurdish separatists to act out. It’s possible that the regime is focused on the minority population in certain ways. I don’t know if that would apply the Jewish population, but this question of ethnic minorities is a more pressing question inside Iran today.
Q: Thank you.
OPERATOR: Thank you. Then next question will come from Farnaz Fassihi with Wall Street Journal. Please go ahead with your question.
Q: Hello. Thank you for doing this. I’m curious to hear what you think of these protests in light of the broader regional chaos and sort of crises that we see, and if that calculates into how the U.S. or the West will support or not support the protesters in Iran. In other words, do they—do they want to really destabilize Iran and create a security vacuum?
JAFFE: Phil, you want to take that question? I know you had a very strong op-ed in The New York Times about what you think the administration should or shouldn’t do.
GORDON: Sure, thanks. Yeah, I’ve weighed in on that question of what the U.S. should say and do in the form of cautioning restraint. I think broadly speaking, these protests are a good thing in the sense of, you know, we have our problems with the Iranian regime, the Iranian people certainly have their problem with the Iranian regime. And for them to feel pressure from below that their corruption is a problem and their spending money on foreign adventures is a problem and they need to treat their people better and make sure that the people receive the fruits of any sanctions relief, I think is all a good thing.
The question to the United States then becomes how can we help encourage this trend in a positive direction and, equally importantly for me, how can we avoid doing things that would do more harm than good? And I actually think a high-profile effort and declarations by the United States and, directly to get at your question, you know, specifically weighing on do we want to take advantage of this to weaken our enemy in the Iranian government and promote regime change, I do fear that that explicit agenda by the United States would do more harm than good.
I completely understand the natural American inclination to want to say: We, as the United States, should weigh in on behalf of courageous protesters who deserve the right to free expression and protest, which is absolutely right. And I have no problem with such statements across the U.S. political spectrum. But we should also be very—we should understand that the United States and the Trump administration in particular are not necessarily the best vehicles, and that there are problems with putting an American face on these protests.
I think that only give the regime further pretext to blame foreign interference and distract from its own failings. People point out that they’ll blame foreigners anyway, which is true. But you know, why give them additional fodder? I also think we should be very careful not to write checks that we can’t cash, by which I mean if we start inciting the Iranian public to rise up because we want them to overthrow their regime, what are we going to do if the regime then does violently crack down against them and we’ve come out and even encouraged them to take action?
People worry about U.S. credibility and resentment of the U.S. I think that would be a recipe for just that. And, you know, others have pointed to the precedent made in ’91 when President Bush—H. W. Bush urged, you know, the Iraqi Shia to get Saddam Hussein to step aside, and they were—they were slaughtered. And leading to, you know, eternal resentment of the United States. So I think we just have to—in this case, discretion is the better part of valor. I don’t think active American efforts can help. And I think that certain American efforts and high-profile efforts can actually backfire and lead to the opposite of what we are trying and what is in our own interest.
JAFFE: Ray, let me ask you this follow-up question. For—let’s say the regime take the position that you’re expecting, and they are highly repressive of the protests, that the protests are put down, and looking more like 2009 again, and Rouhani is discredited in the way you’ve described. What do you think the path forward is for the United States and for the Trump administration on the sanctions question?
TAKEYH: Well, I think what I was suggesting is that the regime is going to have a right-wing shift, in a sense that the policies that the right has advocated in terms of the economy internally and lack of social liberties and so forth are likely to be the case. I suspect if these demonstrations become enlarged, then the regime as whole, including President Rouhani whose rhetoric has become more hawkish as these protests have gone by, will all come together in an act of repression. But in that amount of repression, I think you’d see more of a consolidation of the conservative bloc and less input and influence from other sectors of society, whether it’s the left or the center, which would be—I mean, the center is now, in my judgement, is joining the left in being excised from sort of the official corridors of power.
If things really get out of hand, I mean, this is a dynamic situation. And I suspect United States is going to follow. It’s hard to see if you have massive repression and further sort of crackdowns that there would not be pressure for some sort of a response in terms of the sanctions policy. Those responses can generate from Congress, can generate from the White House or some sort of a working together. I suspect there would be some sort of a legislative response in terms of punitive economic measures based upon such a crackdown, as you suggest. Now, what the composition of those sanctions would be, I don’t know.
JAFFE: OK. We’ll take the next question from our queue.
OPERATOR: Thank you. The next question will come from Laura Rozen with Al-Monitor. Please go ahead.
Q: Hi. Can you hear me?
JAFFE: Yes, we can hear you, Laura.
Q: Thanks for doing this. Yeah, I wanted to ask a little bit about—I’ve been struck that the European reaction has been muted and that, you know, France, which is kind of the most forward-leaning on human rights of the European three, you know, has openly expressed concern about how forward-leaning the U.S. has been, and almost seemed to try to distance themselves from the U.S. kind of cheering on, you know, semi-regime-change language. Thanks.
JAFFE: Phil, you want to take that on? Do you think the Europeans are just trying to hedge their bets because they have business deals pending, or do you think there’s something more philosophical involved?
GORDON: No, I think it’s a bit of both. But I think it’s more philosophical. I think the Europeans share the concerns that I was just articulating about putting an international face on this. You know, right now the spotlight is on the failings and the transgressions of the Iranian regime, where it should be. And I think they are concerned about a high-profile international effort—particularly an American one. Because I actually think that it makes more sense for Europeans to be weighing in. If it’s just the Trump administration, which doesn’t exactly have a great reputation in Iran. You know, Trump has banned Iranians from visiting the United States and he’s opposed the sanctions relief that they benefit from. And his word is not trusted in Iran.
If it’s just the U.S. laying in, I think it’s counterproductive. If it’s the international community, including the Europeans or led by the Europeans, I think the Iranian regime would have to take that more into account. So from my point of view, you know, we got it exactly backwards right now, with the U.S. taking the lead with the most sort of hawkish time for change in Iran statements, and the Europeans keeping quiet. I think we’ve be more effective it was the other way around. But I think Europeans are driven by a number of things, including their concern that if we turn this into foreigners meddling in Iran again we let the Iranian regime off the hook rather than encouraging it to make changes.
If I could just return to link this to the previous questions, because it is—question, because this is also related to the sanctions question and how the U.S. responds. I think the Europeans are concerned about spillover to the nuclear deal. People know that the United States has some important decisions to make on waivers, extensions for those sanctions to be lifted, this month starting January 11 and 12. And my own view is that not waiving the sanctions because of these protests would be falling into a trap. And if—I mean, I agree with Ray. Some sort of a response would be inevitable if there’s violent repression. And it would be appropriate to sanction Iranian entities that participate in that repression and/or international firms that may supply goods used in the repression.
But killing the nuclear deal could be cutting off our nose to spite our face, in the sense that that would just return to a place where it’s the international community to blame for the economic problems and it’s reimposition of sanctions and the world is against us, rather than what seems to have happened now which is that sanctions got lifted. And the Iranian public said, OK, our life’s going to get better now. And it didn’t. And the reason for that is the regime rather than the U.S. or the Trump administration.
JAFFE: OK. Our next question, please.
OPERATOR: Our next question will come from Jessica Ashooh with Reddit. Please go ahead.
Q: Hi. I was wondering, there’s been—you mentioned the shutdown of social media. And I was wondering if you have any views on whether that is effective, whether that is sustainable, and whether that is in the future for the Iranian regime.
JAFFE: Ray, do you want to take that question? Also in light of the fact that the kinds of groups that are protesting are maybe different than we saw in 2009?
TAKEYH: There has been a very significant profusion of social media usage in Iran among all classes. You know, and one of the interesting thing about this is the contagion effect. How does it spread so quickly from one city to another, from one province to another, from one locality to another? And I think social media played a critical role in this. But there is a possibility—and I’m just offering—that there is some sort of an internal oppositional organization that is also driving thing that we don’t know about. And that is also a possibility, in conjunction with social media.
Protest movements such as these, given the fact that they’re locally originated, tend to produce their own leaders. And so moving forward, the regime is going to have a problem of not just two leaders after the Green Movement that it could essentially take out from the scene and have under house arrest—the reformer Karroubi and the presidential candidate Mousavi. But given the fact that there is so much locally generated opposition, I think the regime is going to have to deal with the fact that there are a multiplicity of leaders in a variety of places. And I think social media outlets, those allow these kind of maybe unrelated group of people to have greater cohesion and access to one another and perhaps knit together a larger movement, even if this particular round of protests burn out.
I don’t know if in this day in age, with all the technologies that are available, any regime can effectively control its social media. Iranians are very connected to those—to the devices and so forth. I think the regime will try to engage in that repression and the protesters will try to get around this latest measure, and so on and so forth. And here, I think the United States can play a role in terms of providing communication devices and so forth, and that kind of a thing. But I don’t know if the regime can effectively control public discourse in Iran as easily. It’s a country of 80 million. It’s a sophisticated political culture. And everybody seems to have access to some form of social media outlet and so forth. So it’s a losing fight for the regime in that sense.
JAFFE: Thank you very much. Next question.
OPERATOR: The next question will come from Stephen Heintz with Rockefeller Brothers Fund. Please go ahead.
Q: Thank you very much. Within the last hour, the State Department has issued a new statement on the continuing protests in Iran. And they reiterate their view that the Iranian people have the right to protest and express their sympathies with the Iranian protest. They say at the end, and here I quote, “We condemn in the strongest possible terms the deaths to date and the arrests of at least 1,000 Iranians. We have ample authorities to hold accountable those who commit violence against protesters, contribute to censorship, or steal from the people of Iran. To the regime’s victims we say: You will not be forgotten.” And that’s the end of the State Department’s statement.
So I’m interested to ask both Phil and Ray how they interpret that statement, that we have ample authorities to hold accountable those who commit violence against protesters, contribute to censorship, or steal from the people of Iran.
JAFFE: Phil, you want to go first on that?
GORDON: Sure. I mean, I think it’s pretty straightforward, Steve. You know, we have—there are a number of executive orders that are available to the president, including executive orders that cover human rights, that could be used to sanction, you know, whatever Iranian entities or individuals we choose under those authorities. They have been applied significantly in the past. And, you know, I suspect that’s what State is referring to now. If there are entities that are not currently designated under those authorities but are seen to play a role in violent repression, that they would be pulled out and used in this case. So that’s what I think they’re referring to.
TAKEYH: I’d just say that about a couple months ago the United States Congress did pass a bill—I think it passed 98-2 in the Senate—that designated the entire Revolutionary Guard as a terrorist entity. And it was the job of the Treasury Department to actually map out how to—how to impose sanctions as a result of that particular designation. As I said, it passed—it passed—I think it was the Iran-Russia Sanctions Act. It passed Senate 98-2 and by similar majorities in Congress—in the House of Representatives. The president signed it into law. So there is that sort of—the president does have the authority, and actually the responsibility—he’s obligation by law.
And the Treasury Department was supposed to have a kind of detailed map out about how to implement those particularly device, and implement sanctions against the Revolutionary Guards, entities and their business enterprises and their entirety, but January—by early—end of the year at the latest. And so the president can certainly draw on that latest law in terms of that. And this may be other elements of the regime, I don’t know. The statement doesn’t obviously detail that. But I suspect that shortly the administration will announce some kind of a package of sanctions that it has in mind, because of the hint—they already have hinted it, as in the statement that was just read out.
JAFFE: And let me add to that—
GORDON: And one thing—
JAFFE: Oh, go ahead. Go ahead, Phil.
GORDON: Oh, I was just going to add a brief—
JAFFE: Go ahead.
GORDON: What Ray is referring to. I mean, we have multiple and multiple authorities. The Countering American Adversaries for Support of Terrorism Act (sic; Countering America’s Adversaries Through Sanctions Act) that Ray referred to over the summer. He’s right, Congress mandated that the administration take under action of this rubric. When the president decertified to Congress the Iran nuclear deal in mid-October, he took a step that announced that whereas only part of the Revolutionary Guard, the external Quds Force, had been designated under these executive orders, he was extending those authorities to designate the rest of the entirety of the Revolutionary Guard for supporting terrorism.
But a couple of things to keep in mind about that. One is that the Revolutionary Guard had already been designated multiple times under different executive orders, including those about human rights that I referred to, and support of terrorism. So a lot of this and a lot of the additional sanctions that we see announced here are really just designating the same entity again under a different authority, but not actually adding any material changes to what we do.
I mean, Iranian entities are already very significantly sanctioned the president chose in mid-October not to designate the Revolutionary Guard Corps as a foreign terrorist organization, which would have been a much more significant step, the first time any essentially foreign army—in this case, conscript army—would be entirely designated under much more significant authority that would apply criminal sanctions to anyone providing any support to that organization. And given the IRGC’s economic role, that could be a very significant step. So there’s plenty the U.S. and the State Department can do. But if you look at the details, you’ll often find that what it’s really doing is just sort of reinforcing something that has already been done.
JAFFE: So let me just mention, I was going to say, adding to that point, in 2010 after the 2009 upheavals, Khamenei ordered a change in structure in the oil industry in Iran, I think specifically because everybody who as alive in ’78 and ’79 knows what happened with oil workers. And so they actually placed more people from the Revolutionary Guard into senior leadership positions in different parts of the oil industry. So that’s could open the president some interesting opportunities, if they wanted to leave the Iran deal untouched but they wanted to target certain kind of oil deals. They might look into this Revolutionary Guard aspect and see if there’s something they could do on oil that would pinch the regime a little, but isn’t actually violating the Iranian nuclear deal.
OPERATOR: Thank you. The next question will come from Adrienne Medawar with Town Hall Los Angeles.
Q: Thank you. And thank you for doing this.
There are those who say that the—in Iran, the young, especially women, are well-educated. But a big factor here is that there are no jobs, as in many parts of the Middle East. How can this be dealt with? First of all, is this so? And secondly, how can this be dealt with in a timely fashion? I mean, this is not something you do overnight, creating jobs. We know that. (Laughs.)
TAKEYH: Well, I think that’s the—that’s the regime’s dilemma, has to do with problems of unemployment and underemployment. Has to deal with the fact that the youth employment is about, as Phil mentioned, 40, 30 percent. This is—this is a problem that Iran has today. But moving forward, Iran is going to have another problem. Mainly, the Japan problem. It will have too many elderly and too few working people. So even if it manages to address this problem, down the road in another 10 years it will have a different category of problems to deal with, you know, sustaining an elderly population with a sort of a diminishing workforce in a contracted economy.
So the economic problems of the country are just not going to go away anytime soon. The country is mismanaged. I mean, Amy referred to it, putting Revolutionary Guard people in oil industry, which is not a particularly good use of Revolutionary Guard members, in any industry. But and essentially when you staff so much of your—so much of your economic apparatus with loyalists and so forth, you’re going to see this kind of a stagnation. You know, the country does have, as was mentioned, very significant problems.
I mean, Ali Khamenei’s idea of economy of resistance does have some benefits to it, in a sense that he does talk about actually diversifying the economy and essentially producing products other than just merely exporting a sort of a mono-culturized economy. He does have a point. But so far, they have been unable to do that. They do have other forms of exports—petrochemicals, cars, steel, and so forth. But that has some local Middle East markets, but not that many. And this is the curse that the country finds itself in. It needs to do deep, structural reforms of its economy, but there’s always a fear that such a structural reform will cause dislocation and instability. And I think after the latest episode of protest there’s going to be even a less appetite for the type of reform that may actually get the economy going again.
JAFFE: Thank you.
GORDON: Amy, can I just add? I think Adrienne’s question gets at a fundamental challenge for Iran policy, or indeed policy towards any American adversary—especially, though, in this case with a nuclear program. On one hand, you want to use sanctions or review sanctions to punish the government, and to cut off revenues that can be used for the support of terrorism or foreign policy adventures or the nuclear program. But that punishes the very people that we are hoping to support and hoping to be our allies in bringing about change in Iran. And I think that dilemma is going to apply now as we think about how to respond to these protests, and especially if the regime cracks down, there will be a tendency or calls for the reimposition not just of, you know, narrow sanctions against certain entities, but sanctions against the entire country, including those nuclear sanctions, which would feel like a way to punish the regime for its crackdown, but at the same time—getting back to your question about jobs—would only hurt the people that we are trying to help here. And the phenomenon in all of these situations is often that when money is limited through these sanctions, the government still gets its money, the corrupt officials still get their money, the IRGC gets its budget, there’s plenty of money for supporting terrorism—which isn’t particularly expensive—but the people of the country suffer. And that’s one of the things I worry about could result from all of this, is that our response to the regime’s repression could lead to a set of policies, including the reimposition of sanctions, that just make the situation worse in the long run.
JAFFE: And I think it’s important to point out that Ayatollah Khameini, his concept of the resistance economy is to cut Iran off from the global economy, and to control—have the government itself control the kind of commanding heights of the economy, and to use those resources to follow the sort of theological mission of this current government. And so I do think that it’s important to understand that.
I mean, one of the reasons that they came up with this whole resistance economy idea in the first place was that the United States was understanding how dependent Iran was on imports of gasoline and other fuels because it had so made such a mess of its petrochemical and oil industry. So one of the things that I feared when we—when we made the Iranian nuclear deal is that once the regime would get the spare parts that it needed for its petrochemical and fuel system, it would not be committed to the deal anymore.
So I do think what Philip is saying is correct. We need to think how to target the particular entities that we want to get squeezed. Whether that’s through attacking the corruption through the Justice Department or through our allies, having them look at the corruption in different ways and seeing if we can have a more targeted focus and not just, you know, it’s a hammer, they’re the nail.
GORDON: And, Amy, the thing about the resistance economy related to this, I think, is, as you rightly say, Ayatollah Khameini is interested in persisting with the resistance economy because he does just fine. But what’s interesting about these protests is it seems to be the Iranian public saying, well, you know what? We’re not cool with that. We’re not happy to continue to sacrifice so that you can do just fine and you can do whatever foreign policy and things you want because this is not working out for us. And that’s, I think, an important sort of shot across the bow. The regime is going to have to take that into account moving forward regardless of how these things play out in the short term.
JAFFE: I would agree with that. And I would emphasize what an important opportunity that could be in the long run and that the United States not take any action, as Phil was saying, that would quash the momentum of that, because that is an important development.
I think we have time for one more question.
OPERATOR: Thank you. The final question will come from Frank Kelly with Deutsche Bank.
Q: Thanks for a fantastic call.
My question sort of goes back a little more particularly to a question that was asked earlier about regional issues. Do you guys—and maybe this is way off—is there—is there a risk here that Tehran uses this or twists this as a way to get back at Saudi, or to claim that there’s foreign interference, et cetera, and further sort of stirring the pot in the region?
TAKEYH: Well, I would say—
JAFFE: So I think I’ll—go ahead, Ray. You go first, then I’ll weigh in.
TAKEYH: Well, the Iranians are already saying the Saudis are involved in this, even to the point of General Jafari, head of Revolutionary Guard, said Saudis and Americans and Israelis who produce ISIS are actually infiltrating ISIS personnel into Iran to instigate the protests. So that happened.
I don’t think the competition between Saudi Arabia and Iran that is playing itself out throughout the region—in Syria and Iraq and Lebanon and Yemen—is going to be affected by this, in a sense that I think that it’s already at a pitched high. One of the things that Iranian government should do is retreat from some of these imperial ventures because they don’t seem to be very popular with its own people, as indicated by some of the protest slogans.
For a long time—I think you saw in the past couple of years the regime was becoming much more flamboyant in terms of its suggestion that it is involved in a variety of regional civil wars. Essentially, it had a team of Shia empowerment, pan-Shiism across the Middle East. I think the regime anticipated that that sort of imperial surge, married to Shia solidarity themes, would give it a greater degree of credibility at home. That has seemed to have been rejected by the population.
But I don’t believe it will affect the policy of the government, especially if I’m correct and the government moves further to the right, and subscribes not just to resistance economy but also the other Ali Khomeini slogan, the revolution without borders. So, in that particular sense, the regime would be wise to retreat from some of its imperial adventures, given their cost, but I don’t think that’s likely.
JAFFE: And I would add to that, in terms of regional tension, that because this sort of struggle between Saudi Arabia and Iran in these many locations that have been mentioned, I think the Saudis see this as a very existential military competition, and I think that they will see these protests as an opportunity of weakness on the Iranian side, and therefore they will probably want to step up their own efforts. And again, they’ve had a fairly muscular foreign policy in the last year or two.
So I think that that’s, again, something that the United States is going to have to address in its policies. And I wonder if Phil has any point of view about that.
GORDON: Well, that is at the center of what the administration says its regional policy is now about. I mean, repeatedly senior officials, starting with the president but including others, have said that the—Iran is behind most of the problems in the Middle East. And the president announced in October what he called a comprehensive new strategy to deal with Iranian expansionism in the region, which as Ray rightly said is—you know, is already on the roll. And everywhere you go in the Arab world or in the Gulf you hear, you know, talk about the Iranians now control four Arab capitals: Baghdad, Beirut, Sanaa, and Damascus. And they fear that there are more to come if somebody doesn’t stand up to them. So at least in theory that is at the heart of U.S. policy, the desire to contain this Iranian expansionism.
I think when you look closely there’s a big gap between the administration’s pronouncements about what it’s going to do and actual containment of Iran, which involves much more difficult and costly things like, you know, having boots on the ground in Syria, and being willing to tackle Iranian militias and risk asymmetrical responses and all of that. But it’s definitely, as it should be, a high-level U.S. concern and the focus of U.S. policy.
I agree with Ray that we probably shouldn’t expect too much out of this. I mean, you could come up with a scenario whereby Iran finally starts to realize that there’s a cost to this expansionism, both because it’s provoking Arab and Gulf responses and resistance, even leading to some tacit cooperation between Israel and Gulf regimes. It’s provoking an American response, which is very much focused on how to punish Iran and contain Iran. And then, on top of that, now it seems to be leading to some disgruntlement in Iran’s own population.
So you could come up with a hopeful scenario whereby the regime gets this and starts to divert some of its attention and spending to its base, so to speak, as we said earlier, rather than to these foreign adventures. I wouldn’t hold my breath on that, because I think there are a whole bunch of reasons why this regime is committed to that. And we’ve already seen the way they’re—part of their strategy is to fan the flames of sectarianism as a, you know, sort of raison d'être, the reason that they would win support from their public.
They’ve already tried to blame the Saudis. I think Iranians said—you know, Iranian spokespersons said that a quarter of the protesters were, you know, Saudi-sponsored or something like that. So they’re going to try to blame their adversaries, which would be consistent with what they’ve been doing.
So I fear we should expect that to be the future course while hoping, at least, that maybe this will at least get their attention and oblige them to think twice about their foreign policies, and think more about what they can do more for their own people rather than spreading the revolution.
JAFFE: Well, I’ll leave that as the last word. I want to thank Ray Takeyh and Phil Gordon for a really fascinating afternoon’s commentary on the events in Iran. I want to thank all of our participants and your excellent questions.
Again, this was an on-the-record call. A transcript of the call will be posted at CFR.org. And I know Phil and I and Ray continue to write about this subject, so I welcome you to come and look for our blogs and articles on the CFR website. Thank you very much, everybody.
TAKEYH: Thank you.