Iran Democracy Monitor: No. 123

CURRENCY WOES HIT TEHRAN
Iran's beleguered economy has taken a fresh drubbing in recent days, with its national currency falling to record lows against the U.S. dollar. On October 1st alone, the value of the Iranian rial declined by some 17 percent, collapsing to a value of 34,700 to one American dollar. The massive devaluation has exacerbated an already-dire fiscal situation in Tehran; the rial has lost more than 80 percent of its value over the past year as a result of Western pressure.

U.S. officials have cited the decline of the rial as proof that economic sanctions levied against the Iranian regime by the U.S. and its allies in Europe are having significant effect. "From our perspective this speaks to the unrelenting and increasingly successful international pressure that we are all bringing to bear on the Iranian economy. It's under incredible strain," State Department spokeswoman Victoria Nuland has said.

Iranian officials are saying much the same, albeit with different conclusions. Iranian president Mahmoud Ahmadinejad, for example, has blamed the rial's recent slide on "enemies" of the Islamic Republic, but vowed that his government would not "retreat on the nuclear issue." (BBC, October 2, 2012; Agence France-Presse, October 2, 2012)

JOBLESSNESS, INFLATION SOAR AS WESTERN SANCTIONS BITE
A collapse of the national currency isn't the only economic worry for Iran's government. Growing international pressure on the Iranian regime over its nuclear program has caused a massive spike in inflation. Officially, the Iranian government has said that the national inflation rate stands at some 25 percent, but informed estimates suggest the true rate could be as much as double that figure. Unemployment has also soared, with an estimated 500,000 to 800,000 Iranians having lost their jobs in the past year.

The Iranian government's failure to keep pace with these negative trends is increasingly drawing the ire of parliamentarians in Tehran. According to Musalreza Servati, a member of the Majlis Budget Committee, the Iranian government has only created a total of 600,000 jobs annually since 2005. This figure falls significantly short of the government's promised 900,000 per year - a gap Servati attributes to a lack of planning and coordination within the government. Several other committee members concur that the government has failed its legal obligation to eliminate unemployment. (Tehran ICANA, August 21, 2012; Reuters, September 19, 2012)

IRAN COURTS THE SYRIAN OPPOSITION
For decades, the Alawite regime in Syria has served as the Islamic Republic's staunchest regional ally. But now that the civil war between Syrian president Bashar al-Assad and his domestic opposition is more than a year-and-a-half old, the Iranian regime is showing signs that it is contemplating its political alternatives in Damascus. Thus a leader of the Syrian opposition has charged that Tehran has repeatedly attempted initiate begin diplomatic contacts with the Syrian branch of the Muslim Brotherhood, which makes up part of Syria's rebel forces. For its part, the Islamist group has denied the charges - mostly. The Brotherhood has told Iran in no uncertain terms that there "would be no dialogue except after Al-Assad’s departure from power," a leading Brotherhood figure, Mulhim al-Durubi, has told reporters. (London Al-Sharq al-Awsat, September 25, 2012)