Iran: Inevitable Transition in A Long Game

SOURCE: INSTITUTE OF STUDY OF WAR

The current economic state of Iran is unsustainable, thus a transition in the medium term is inevitable, what form it takes and when it happens remains to be seen, an inevitable long game is evident.

The past few weeks, starting December 28, protests in Iran have dominated the global headlines despite the United States Operation Absolute Resolve launched just a few days later on January 03.

With success in replacing a recalcitrant head of state, President Nicolás Maduro in Caracas and flying him and his wife Cilia Flores to New York to face trials, there is a perception that the US administration under the inveterate President Donald Trump may be looking for more opportunities, and the protests in Iran may seem to provide one.

Never the one to pull his punches, President Trump has vowed to support the people of Iran.

A former prince of the deposed Pahlavi dynasty, Reza Pahlavi, in exile in the US, has called on the people of Iran to take to the streets and said he would be willing to cheer them on and possibly lead them.

For the US, a confrontational relationship with Iran is dyed in the history of the Iranian Revolution in 1979 that deposed a favourable Shah and took over the US Embassy in Tehran by supporters of the Ayatollah Khomeini, the predecessor of the current Supreme Authority Khamenei, in November of the same year.

For Iran, memories of the US CIA-led coup in 1953 that deposed Prime Minister Mohammad Mosaddegh.

In recent years, the history of relations, particularly with Mr Trump’s Administration, has been fraught with contentions from the withdrawal of the US from the nuclear deal short form known as JCPOA in May 2018, the assassination of Maj Gen Soleimani, Iran’s Quds Force commander, and the May 2025 strikes on Iranian nuclear facilities.

Thus, trust with the US administration borders on hostility.

Moreover, the tools available to the US for regime change in Iran primarily involve cyber and information operations, which are already in use and have yet to produce a tipping point that would see the regime fall.

Despite the heavy death toll, with over 700 killed, both civilians and soldiers, there are no signs that the government or the protestors are willing to relent, with the rioting passing into the third week.

The genesis of the protests remains economic, which has quickly spiraled into a demand for the replacement of the clerical regime led by Ayatollah Ali Khamenei, seen as the figurehead of the controls that have led to the current crisis, with a spiraling fall in the price of the Touman and inflation over 40%.

While the President, seen as the executive head of the government, attempted to placate the protestors, his efforts, such as increased subsidies, were seen as a band-aid for a crisis deeply rooted in the system.

Khamanei and the administration have blamed the US for having incited the protests into rioters, thus externalising what is largely an internal issue.

Enter the Basij and the Islamic Revolutionary Guards Corps, which have tamped down these and many other protests prior with a heavy hand.

There appears to be a stalemate for now.

The parliament is functioning, the internet has been blocked, but for a few news sites, such as Tasnim, which is controlled by the IRGC, official news from Iran is sparse.

Freelance videos are rife.

The Institute for the Study of War [ISW], which is curiously tracking the War in Ukraine, is now focused on protests in Iran and is publishing updates of the protests, which seem to be focused in the North, North East, and Western parts of the country, with Tehran, Mashhad, and other major cities being the hot spots.

How the situation will unravel is unclear for now.

What is clear, however, is that Iran will have to seek an economic transition if not a political one.

An economic transition without fundamental changes, including the IRGC's control over the economy, will remain incomplete. For the IRGC to rescind controls on the economy will require a political signal from the top, which is Khamenei or his replacement.

The other arm is the removal of US sanctions. The US conditions for the same are that Iran forsake its right to enrichment, which Tehran sees as an infringement on sovereignty.

The US may only increase the pressure on the regime, but whether Khamanei, in his eighties, relents remains to be seen.

Till then, the battle on the streets may continue intermittently, as the economic genie is unlikely to go back into the bottle.