Violence and Protest in Iran as Currency Drops in Value
By THOMAS ERDBRINK and RICK GLADSTONE
Riot police used batons and tear gas to close a long- tolerated black
market for foreign currency in Tehran on Wednesday, after Iran’s
currency hit a record low.
Video From the Lede Blog
European Pressphoto Agency
Riot police officers clashed with money changers in Tehran on Wednesday.
By THOMAS ERDBRINK and RICK GLADSTONE
Published: October 3, 2012
TEHRAN — The first outbreak of public anger over Iran’s
collapsing currency and other economic maladies jolted the heart of the
capital on Wednesday, with riot police violently clamping down on
black-market money changers, hundreds of citizens marching to demand
relief and merchants in the sprawling bazaar closing their shops in
protest.
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The official news media in Iran said an unspecified number of people had
been arrested, including two Europeans, in the unrest, which was
documented in news photographs, at least two verifiable videos uploaded
on YouTube and witness accounts. Economists and political analysts in
Iran and abroad said the anger reflected both the accumulated impact of
harsh Western economic sanctions over Iran’s disputed nuclear program as well as the government’s inability to manage an economic crisis that has become increasingly acute.
It came a day after Iran’s president, Mahmoud Ahmadinejad,
told a televised news conference that the plunge in the value of the
currency, the rial — it has fallen by 40 percent against the dollar this
past week — was orchestrated by ruthless currency speculators, the
United States and other unspecified internal enemies of Iran. He pleaded
with fellow citizens to stop selling their rials for dollars, a
currency he once characterized as “a worthless piece of paper,” and warned that speculators face arrest and punishment.
But Mr. Ahmadinejad, whose stewardship of the economy has been
increasingly challenged by other Iranian politicians in the last year of
his term, offered no new solutions to arrest the slide in the rial,
which is a major inflationary threat and has become the most visible
barometer of Iran’s economic travails. Because of the sanctions, Iran is
facing extreme difficulties in selling oil, its main export, and in
repatriating dollars and other foreign currencies, because Iran has been
largely cut off from the global banking system.
Unscripted protests in Iran are highly unusual, particularly since the
political opposition in the country was crushed after Mr. Ahmadinejad’s
disputed re-election in 2009. Iran experts said the outbreak on
Wednesday was significant because it appeared to offer an insight into
the degree of public weariness.
“It may not be widespread yet, but it demonstrates not just unhappiness
with the Ahmadinejad government, but also dissatisfaction with the
Islamic Republic’s failure to stem the economic crisis brought about by
incompetence, mismanagement and sanctions,” said Alireza Nader, a
Washington-based political analyst at the RAND Corporation, a research
and consulting firm. He said “the regime is going to face much greater
instability in the future, especially if it loses the support of Iran’s
business and merchant class.”
Gary Hufbauer, a senior fellow at the Peterson Institute for
International Economics in Washington, said in an audio commentary on
the group’s Web site
that the sanctions had effectively halved Iran’s oil exports, choked
its ability to import essential goods and left its currency worth a
fraction of its value early this year. “These are hard times for
ordinary and upper class Iranian people,” he said.
The unrest also caught the attention of Secretary of State Hillary
Rodham Clinton, who speaking from Washington rejected Mr. Ahmadinejad’s
explanation for the rial’s plunge. She suggested that conditions would
improve if Iran engaged in meaningful negotiations over its nuclear
program, which Western powers and Israel suspect is meant to develop nuclear weapons but Iran says is for peaceful purposes.
“I think the Iranian government deserves responsibility for what is
going on inside Iran,” Mrs. Clinton told reporters. “And that is who
should be held accountable. And I think they have made their own
government decisions, having nothing to do with the sanctions, that have
had an impact on the economic conditions inside the country.”
Mr. Ahmadinejad’s warning to currency manipulators appeared to be the
reason for the riot police deployment in and around Manoucheri Street in
central Tehran, where the black-market money changes had been doing a
thriving business, particularly in recent days as hundreds of Iranians
sought to trade their rials for other currencies, fearing even worse
times ahead.
Witnesses described cat-and-mouse chases between motorized riot police
officers armed with tear gas and batons, and money changers and their
customers, who were forced to scatter.
Anger also spread to Tehran’s grand bazaar, where many merchants closed
their stores. Some were cheered by sympathetic shoppers in denouncing
the government for its financial support of Syria’s embattled government
instead of investing that money at home.
“They spend billions of dollars to keep Syrian President Bashar al-Assad
in power, but now they say they have no money!” one garment seller
screamed, according to witnesses. A team from Iran’s state television
was nearly attacked when its reporter turned to the camera saying that
the people behind him had been upset over a robbery.
Abdullah, a young man selling textiles, loudly complained that it has
become extremely difficult to do business when the value of the rial is
so unpredictable. “The checks our customers give us bounce, we don’t
know what prices will be tomorrow, how can we earn a living?,” he said.
One of the videos uploaded on YouTube
that witnesses verified as genuine showed hundreds of demonstrators
marching peacefully and chanting “Leave Syria alone, think of us!”
But other videos, apparently uploaded by Iran’s underground and exiled opposition movement to exploit the moment for political advantage, appeared to be fake, blending clips from Wednesday with old footage from the antigovernment protests following the disputed election more than three years ago.
Related
The Lede Blog: Video Offers Glimpses of Tehran Protests (October 3, 2012)
Iran’s President Ties Recent Drop in Currency to U.S.-Led Sanctions (October 3, 2012)
Netanyahu Appears to Be Shifting Israel’s Iran Policy Toward More Sanctions (October 3, 2012)
Wary of Israel, Iran Is Said to Err in Strikes (October 3, 2012)
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The Mehr News Agency reported that several people were arrested at the bazaar, including two Europeans disguised as tourists who were “collecting intelligence.” They were not further identified.
The secretary general of the Tehran Bazaar and Trade Union, a powerful official close to the government, accused unspecified outside instigators of pressuring bazaar merchants to close their shops. The official, Ahmad Karimi Esfahani, was quoted by the Iranian Labor News Agency as saying that most merchants had wanted to remain open for business. “Those now present are trying to show the bazaar as closed,” he was quoted as saying. “They are guided by foreigners.”
Other bazaar traders hinted that the closure of the bazaar was organized by powerful opponents of Mr. Ahmadinejad, who were trying to make him look weak by closing down Tehran’s most popular shopping center.
Members of Parliament and Shiite Muslim clerics have been calling for an end to the black-market currency trade, accusing the money changers of driving down the rial’s value. Others have called upon the government to buy rials and sell dollars and other foreign currencies, presumably from the central bank’s reserves, in order to stabilize the rial. But it is unclear exactly how large a cash reserve the Central Bank has at its disposal.
The head of Iran’s Central Bank and Mr. Ahmadinejad regularly say that Iran has more than $100 billion in cash, but government contractors, state employees and even members of the Revolutionary Guards have complained of late payments in recent months — and sometimes of none at all.
The bazaar is firmly in the hands of conservative businessmen who once supported Mr. Ahmadinejad’s rise to power but now strongly oppose him. Some analysts argued that Wednesday’s protest there may have been staged in order to embarrass the president.
With many trying to blame him for the wide range of problems plaguing Iran, Mr. Ahmadinejad seems to be gearing up for a political fight. On Tuesday he attacked the head of Iran’s parliament, Ali Larijani, accusing him and other politicians of trying to bring him down, after Mr. Larijani told the Revolutionary Guards-affiliated Fars news agency that the government practiced “Robin Hood economics.”
But other videos, apparently uploaded by Iran’s underground and exiled opposition movement to exploit the moment for political advantage, appeared to be fake, blending clips from Wednesday with old footage from the antigovernment protests following the disputed election more than three years ago.
Related
The Lede Blog: Video Offers Glimpses of Tehran Protests (October 3, 2012)
Iran’s President Ties Recent Drop in Currency to U.S.-Led Sanctions (October 3, 2012)
Netanyahu Appears to Be Shifting Israel’s Iran Policy Toward More Sanctions (October 3, 2012)
Wary of Israel, Iran Is Said to Err in Strikes (October 3, 2012)
World Twitter Logo.
Connect With Us on Twitter
Follow @nytimesworld for international breaking news and headlines.
Twitter List: Reporters and Editors
The Mehr News Agency reported that several people were arrested at the bazaar, including two Europeans disguised as tourists who were “collecting intelligence.” They were not further identified.
The secretary general of the Tehran Bazaar and Trade Union, a powerful official close to the government, accused unspecified outside instigators of pressuring bazaar merchants to close their shops. The official, Ahmad Karimi Esfahani, was quoted by the Iranian Labor News Agency as saying that most merchants had wanted to remain open for business. “Those now present are trying to show the bazaar as closed,” he was quoted as saying. “They are guided by foreigners.”
Other bazaar traders hinted that the closure of the bazaar was organized by powerful opponents of Mr. Ahmadinejad, who were trying to make him look weak by closing down Tehran’s most popular shopping center.
Members of Parliament and Shiite Muslim clerics have been calling for an end to the black-market currency trade, accusing the money changers of driving down the rial’s value. Others have called upon the government to buy rials and sell dollars and other foreign currencies, presumably from the central bank’s reserves, in order to stabilize the rial. But it is unclear exactly how large a cash reserve the Central Bank has at its disposal.
The head of Iran’s Central Bank and Mr. Ahmadinejad regularly say that Iran has more than $100 billion in cash, but government contractors, state employees and even members of the Revolutionary Guards have complained of late payments in recent months — and sometimes of none at all.
The bazaar is firmly in the hands of conservative businessmen who once supported Mr. Ahmadinejad’s rise to power but now strongly oppose him. Some analysts argued that Wednesday’s protest there may have been staged in order to embarrass the president.
With many trying to blame him for the wide range of problems plaguing Iran, Mr. Ahmadinejad seems to be gearing up for a political fight. On Tuesday he attacked the head of Iran’s parliament, Ali Larijani, accusing him and other politicians of trying to bring him down, after Mr. Larijani told the Revolutionary Guards-affiliated Fars news agency that the government practiced “Robin Hood economics.”
But other videos, apparently uploaded by Iran’s underground and exiled opposition movement to exploit the moment for political advantage, appeared to be fake, blending clips from Wednesday with old footage from the antigovernment protests following the disputed election more than three years ago.
Related
-
The Lede Blog: Video Offers Glimpses of Tehran Protests (October 3, 2012)
-
Iran’s President Ties Recent Drop in Currency to U.S.-Led Sanctions (October 3, 2012)
-
Netanyahu Appears to Be Shifting Israel’s Iran Policy Toward More Sanctions (October 3, 2012)
-
Wary of Israel, Iran Is Said to Err in Strikes (October 3, 2012)
The Mehr News Agency reported that several people were arrested at the
bazaar, including two Europeans disguised as tourists who were
“collecting intelligence.” They were not further identified.
The secretary general of the Tehran Bazaar and Trade Union, a powerful
official close to the government, accused unspecified outside
instigators of pressuring bazaar merchants to close their shops. The
official, Ahmad Karimi Esfahani, was quoted by the Iranian Labor News
Agency as saying that most merchants had wanted to remain open for
business. “Those now present are trying to show the bazaar as closed,”
he was quoted as saying. “They are guided by foreigners.”
Other bazaar traders hinted that the closure of the bazaar was organized
by powerful opponents of Mr. Ahmadinejad, who were trying to make him
look weak by closing down Tehran’s most popular shopping center.
Members of Parliament and Shiite Muslim clerics have been calling for an
end to the black-market currency trade, accusing the money changers of
driving down the rial’s value. Others have called upon the government to
buy rials and sell dollars and other foreign currencies, presumably
from the central bank’s reserves, in order to stabilize the rial. But it
is unclear exactly how large a cash reserve the Central Bank has at its
disposal.
The head of Iran’s Central Bank and Mr. Ahmadinejad regularly say that
Iran has more than $100 billion in cash, but government contractors,
state employees and even members of the Revolutionary Guards have
complained of late payments in recent months — and sometimes of none at
all.
The bazaar is firmly in the hands of conservative businessmen who once
supported Mr. Ahmadinejad’s rise to power but now strongly oppose him.
Some analysts argued that Wednesday’s protest there may have been staged
in order to embarrass the president.
With many trying to blame him for the wide range of problems plaguing
Iran, Mr. Ahmadinejad seems to be gearing up for a political fight. On
Tuesday he attacked the head of Iran’s parliament, Ali Larijani,
accusing him and other politicians of trying to bring him down, after
Mr. Larijani told the Revolutionary Guards-affiliated Fars news agency
that the government practiced “Robin Hood economics.”
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