By Ramin Mostaghim and Patrick J. McDonnell, Los Angeles Times –
TEHRAN — Iranian police and demonstrators clashed Wednesday during street protests linked to rising prices and the plunging value of the national currency.
Police in black riot gear fired tear gas and moved to disperse the protesters after they had rallied outside the capital’s central bazaar and then marched toward the parliament building. Many businesses and shops were shuttered, leading to the effective shutdown of the huge marketplace.
“Our checks bounced, our businesses are ruined,” said a merchant who gave his name as Ali. “How shall we earn a living?”
About 500 owners of apparel shops and other businesses joined in the march, expressing outrage about their inability to stay afloat as the national currency, the rial, seems to lose more value every day.
“I don’t dare to sell” anything, said Hassan, 48, a cloth salesman who, like others, declined to give his full name, fearing retaliation. “I am scared I won’t be able to replenish my shelves.”
The protests were unusual in this tightly controlled society and seemed to be a spontaneous reaction to outrage about rising prices and the government’s inability to halt the currency slide.
Worried Iranians have been buying up dollars and other foreign currencies, further depressing the value of the Iranian rial.
The merchants’ decision to take to the streets appeared significant because the business class is often viewed as an ally of the status quo. Merchants from the main bazaar were regarded as major supporters of the 1979 Islamic Revolution.
The complaints voiced on Wednesday were not about Iran’s lack of democracy but rather about what many viewed as the inept economic policies of the government of President Mahmoud Ahmadinejad, whose second term ends next year. By law he cannot run again.
The protesters marched more than a mile from the bazaar to a popular junction known as the Istanbul intersection, near the Turkish and British embassies and close to parliament.
As they marched, they decried what they termed “inefficient government” and, in some cases, assailed Iranian rulers’ determination to help the nation’s close ally, Syrian President Bashar Assad.
“Leave out Syria!” some marchers chanted. “Think about us!”
Iran is believed to be providing huge subsidies to Syria in a bid to help keep Assad’s government afloat amid an 18-month rebellion.
U.S. and allied officials saw the clashes as evidence that the tough sanctions imposed this year by the West represent an increasing political threat to the Iranian government and called for a further tightening of the restrictions. The sanctions — aimed at Tehran’s controversial nuclear program — have hurt Iran’s ability to sell its major export, oil, reducing its export earnings.
The sanctions “are having a profound impact on the ground,” said Victoria Nuland, a State Department spokeswoman.
At the center of the protests was discontent with Iran’s free-falling currency. The rial has lost as much as 80 percent of its value against the U.S. dollar in the last year, and its descent has accelerated at a record pace in recent days.
Mark Dubowitz, a sanctions expert at the Foundation for Defense of Democracy, said the rial’s fall may be a sign that Iran doesn’t have the foreign exchange reserves needed to prop up the currency, or at least can’t access reserves that might be in accounts abroad that have been frozen by sanctions.
“You’d think that if the regime had sufficient reserves, and access to them, they could be intervening to prevent the rial from plummeting further,” he said.
The poor and middle classes have been hit especially hard as prices of food and other necessities have risen rapidly.
At the Istanbul intersection, protesters arrived at the same time that police were raiding the shops and corner hangouts of many money changers. The operation was part of a crackdown on illegal sales of U.S. dollars, which are growing in popularity as a hedge against the dwindling value of the rial. Authorities blame these transactions in part for the rial’s declining value.
Police dressed in black with full riot gear fired tear gas to disperse the protesters, who set several garbage bins ablaze amid scattered clashes.
A day before the protests, Ahmadinejad had blamed the current crisis on the U.S.-led sanctions and called for action against 22 “ringleaders” of the currency-exchange market. The president also said Iran was the victim of a “psychological war,” an apparent reference to a widespread sense of economic panic.
Iranian leaders have vowed not to back down on their nuclear program despite the tough Western sanctions. Iran says its atomic program is meant for peaceful uses, including energy generation. Washington and its allies suspect that Tehran is intent on building an atom bomb.