With war likely over, Iranian rulers must face demands of angry, embittered population

Written by Parisa Hafezi and Angus McDowall

DUBAI/LONDON, June 15 (Reuters) – Iran’s theocratic rulers have put the U.S. military campaign behind them, but their real trouble may be about to begin: managing the competing demands of hardliners and a poor, angry population reinvigorated by surviving the attack.

Iran’s powerful conservatives are gaining strength from a three-month conflict that they believe Iran has won. They want the leadership to take a tough stance in upcoming talks with the United States and prioritize rearmament, confident they can stop any domestic dissent by force.

But ordinary Iranians are desperate for any peace dividends or financial aid to raise living standards and provide better opportunities after a devastating war followed by years of painful sanctions.

Both parties have high expectations, conflicting demands, and little patience. Looming in the background is the specter of renewed mass protests, such as the unrest authorities quelled in January when thousands of demonstrators were killed.

POPULAR ANGER IN ECONOMIC CRISIS

“As soon as the war ends and this interim agreement becomes shaky, real problems will begin for Iran’s religious structure,” said Hamidreza Azizi, a visiting researcher at the German Institute for International and Security Affairs in Berlin.

Four Iranian officials and one former official told Reuters of the pressures facing the Islamic Republic’s people as they emerge from war and turn to surveying the ruins of their economy.

Three of these officials said there is a public expectation that any financial aid the government receives from suspended sanctions or asset restoration will be used to stimulate the economy and improve people’s lives.

Of these, one senior official, who described Iranians as “tired of war and economic distress”, said the funds would likely be directed to reconstruction, injections of liquidity into banks and broader economic support.

All four officials either publicly acknowledged or hinted at the risk of renewed protests if authorities fail to improve living standards. One called the agreement to end the war a “double-edged sword”, given the growing public expectation.

The former official, a reformist, said the risks were well understood at the highest levels of Iran’s leadership and was one of the reasons why Tehran accepted the deal to reopen the Strait of Hormuz.

The memorandum to end the war that Iran and the United States will sign on Friday is expected to include some financial aid to Iran, with more to follow if the parties can reach a broader agreement later this summer.

Iran’s economy faces very high inflation, a depreciating currency, widespread unemployment, and extensive damage to industry and infrastructure since the start of the war that will be very expensive to repair.

Iranian economist and political analyst Saeed Laylaz said, “From a domestic perspective, Iran now has a limited window to take control of domestic conditions. The United States has always focused on internal developments in Iran and continues to do so.” he said.

Long-term easing of sanctions—allowing Iranian businesses to regain access to global markets and finance—will require a broader deal with the United States on Tehran’s nuclear program, which is still considered a long shot.

THE CONSTANTS WANT A REWARD FOR THEIR STAND IN WARTIME

Throughout the war, Iranian authorities fended off dissent through stern warnings and brutal punishments, and by dispersing supporters into the streets in an almost continuous series of demonstrations and other events in support of the system.

After years of calling for the establishment to take a tougher stance against the West and for Iran to demonstrate its power through actions such as cutting the Strait of Hormuz, conservatives think they are right and expect to be rewarded for their efforts.

There are various groups in the conservative camp, including the Revolutionary Guard. But while the Guardians are now ready to accept a deal that will help the Islamic Republic survive, the so-called Paydari Front is not.

The front lines include prominent MPs, experienced politicians and influential figures in the media, and can have a large following among the people who have taken to the streets since the beginning of the war.

Although they are not powerful enough to overturn state policy, they can pose a challenge to the ruling order.

Many fear that Iran will agree to negotiations with the United States rather than postpone it for better conditions, especially after the killing of Supreme Leader Ayatollah Ali Khamenei on the first day of the conflict.

“Even though we won the war, they are making a deal with the enemy who martyred our leader. So what is the revenge for the blood of Imam Khamenei? How is this an Islamic government? And now they want to shake hands with the killers of the Imam on Friday,” said Hussein, a member of the Basij volunteer militia led by the Revolutionary Guard, using a title full of reverence for Iran’s late leader. family name.

One of four officials interviewed by Reuters acknowledged that social grievances needed to be addressed, but said the war showed Iran’s military capabilities were a top priority. The rebuilding of Iran’s military power “will continue at full speed,” the official said.

Azizi said that if the interim agreement results in rapid funding for the economy, the government could postpone the reckoning with its people for now.

“The most immediate challenge for the leadership is how to convince their own hard-line support base that this is actually a good deal. This is because they have relied heavily on this hard-line minority throughout the war and during the ceasefire,” he added.

Adding to the challenges facing authorities, the last major round of protests in 2022-2023 resulted in a de facto pushback on women’s public dress codes. Since the mass demonstrations over the death in custody of Mahsa Amini, women have been able to go out without wearing the long-compulsory headscarf; This constantly disturbs radical views.

During the conflict, the Revolutionary Guard grew stronger and helped elevate their preferred candidate, Mojtaba Khamenei, as religious leader, replacing his deceased father. Analysts say Khamenei is still not seen in public and the Guard continues its rise.

They may be willing to pressure ideological hardliners who reject a deal they brokered, as well as protesters who challenge the Islamic system, said Alex Vatanka, a senior fellow at the Middle East Institute in Washington.

“I think they will go after anyone who challenges the compromise because after Ali Khamenei, internal control is now extremely important. They will have social freedoms, such as women walking around without headscarves, but there will be no tolerance for political freedoms,” he said.

(Reporting by Parisa Hafezi; Writing by Angus McDowall; Editing by Nia Williams)