1 00:00:02,720 --> 00:00:07,200 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:09,520 --> 00:00:13,440 Speaker 2: Protests over economic conditions in Iran have roiled the country 3 00:00:13,480 --> 00:00:16,680 Speaker 2: for weeks. Anti government protests in Iran have entered a 4 00:00:16,720 --> 00:00:19,360 Speaker 2: thirteen day as the country faces economic. 5 00:00:19,040 --> 00:00:22,840 Speaker 1: Terms nationwide movement that has now swept through all thirty 6 00:00:22,920 --> 00:00:23,919 Speaker 1: one provinces. 7 00:00:24,000 --> 00:00:26,480 Speaker 2: The death toll in Iran may be in the thousands, 8 00:00:26,560 --> 00:00:29,120 Speaker 2: higher than previously feared. And while it's not the first 9 00:00:29,160 --> 00:00:34,040 Speaker 2: time Iran's regime has faced massive demonstrations, this time feels different. 10 00:00:34,440 --> 00:00:37,440 Speaker 1: What was unique about it, I think, is that the 11 00:00:37,479 --> 00:00:42,000 Speaker 1: sheer desperation of the population brought all segments of the 12 00:00:42,080 --> 00:00:43,000 Speaker 1: society together. 13 00:00:43,159 --> 00:00:47,040 Speaker 2: Olivyas is the Iran Project director for the International Crisis Group, 14 00:00:47,240 --> 00:00:51,280 Speaker 2: an independent policy research organization that tracks conflicts around the world, 15 00:00:51,760 --> 00:00:55,800 Speaker 2: and he says, these protests in Iran are widespread. 16 00:00:55,400 --> 00:00:59,280 Speaker 1: Rich and poor, old and young, secular and pious, and 17 00:00:59,760 --> 00:01:03,480 Speaker 1: also it's spread geographically in places that we had not 18 00:01:03,560 --> 00:01:08,880 Speaker 1: seen protests before, some of the regime's strongholds, including rural areas, 19 00:01:09,080 --> 00:01:11,720 Speaker 1: and then again it's quickly spread to bigger cities. 20 00:01:11,959 --> 00:01:14,920 Speaker 2: What also sets these demonstrations apart is the kind of 21 00:01:14,959 --> 00:01:17,800 Speaker 2: support they're getting from a sitting US president. In a 22 00:01:17,840 --> 00:01:20,560 Speaker 2: social media post, the Commander in chief said, quote, we 23 00:01:20,640 --> 00:01:23,640 Speaker 2: are locked and loaded and ready to go if Iran 24 00:01:23,720 --> 00:01:28,440 Speaker 2: shoots and violently kills peaceful protesters. The Iran regime was 25 00:01:28,520 --> 00:01:32,040 Speaker 2: in a precarious position before this. Israel and the US 26 00:01:32,160 --> 00:01:36,240 Speaker 2: attacked Iran in June. The country's currency, the Iranian reale, 27 00:01:36,560 --> 00:01:38,880 Speaker 2: has weakened dramatically in recent months. 28 00:01:39,240 --> 00:01:42,240 Speaker 1: And so you put all of those things together, it's 29 00:01:42,280 --> 00:01:47,160 Speaker 1: created not just a national sense of desperation, but also 30 00:01:47,240 --> 00:01:50,640 Speaker 1: a sense of finality that we're getting close to a 31 00:01:50,760 --> 00:01:55,520 Speaker 1: moment of absolute deadlock across the board. The regime was 32 00:01:55,600 --> 00:01:58,080 Speaker 1: and is failing, and the people, I think were just 33 00:01:58,120 --> 00:01:58,840 Speaker 1: fed up with it. 34 00:02:02,800 --> 00:02:04,640 Speaker 2: I'm David Gura, and this is the big take from 35 00:02:04,680 --> 00:02:08,000 Speaker 2: Bloomberg News today on the show, weeks of protests in 36 00:02:08,040 --> 00:02:12,520 Speaker 2: Iran and the possibility of international support threatened the Iranian regime, 37 00:02:13,080 --> 00:02:20,200 Speaker 2: How we got here and what could happen next. Iran 38 00:02:20,320 --> 00:02:23,639 Speaker 2: has been led by a religious authoritarian regime since nineteen 39 00:02:23,760 --> 00:02:27,080 Speaker 2: seventy nine, and it has faced protests since then, but 40 00:02:27,160 --> 00:02:31,120 Speaker 2: they've always been quashed by Iran's military and security forces, 41 00:02:31,280 --> 00:02:34,920 Speaker 2: which are aligned with the regime. Olivayaz, the Iran Project 42 00:02:34,919 --> 00:02:38,120 Speaker 2: director for the International Crisis Group, says, there is something 43 00:02:38,240 --> 00:02:42,120 Speaker 2: unique about the demonstrations that are currently taking place across Iran. 44 00:02:42,400 --> 00:02:46,480 Speaker 1: Iran is not unfamiliar with protests. This time, the trigger 45 00:02:47,000 --> 00:02:51,840 Speaker 1: was economic. The Iranian currency has lost about fifty percent 46 00:02:51,880 --> 00:02:54,760 Speaker 1: of its value in the course of the past few months, 47 00:02:55,000 --> 00:02:57,200 Speaker 1: ninety nine percent of his value in fact, since the 48 00:02:57,200 --> 00:03:01,240 Speaker 1: beginning of the revolution. And the economic downturn in the 49 00:03:01,240 --> 00:03:05,640 Speaker 1: past few weeks created a real crisis, and the merchants 50 00:03:05,639 --> 00:03:08,959 Speaker 1: in bazaar came to the streets protesting the market volatility. 51 00:03:09,600 --> 00:03:12,679 Speaker 1: I think they never imagined that they would unleash an 52 00:03:12,800 --> 00:03:17,760 Speaker 1: avalanche that basically covered the entire country very quickly and 53 00:03:18,400 --> 00:03:23,079 Speaker 1: fantastasized into an immediate demand for regime change. Now, of course, 54 00:03:23,120 --> 00:03:26,200 Speaker 1: we have seen this before. It usually takes maybe a 55 00:03:26,280 --> 00:03:29,480 Speaker 1: day or two for these protests to start spreading, but 56 00:03:29,560 --> 00:03:30,840 Speaker 1: this was almost immediate. 57 00:03:31,160 --> 00:03:34,040 Speaker 2: As you mentioned, in twenty twenty five, the Iranian real 58 00:03:34,160 --> 00:03:37,280 Speaker 2: slumped by about forty five percent against the US dollar. 59 00:03:37,320 --> 00:03:40,440 Speaker 2: We've seen this dramatic weakening. What accounts for that? Why 60 00:03:40,480 --> 00:03:42,360 Speaker 2: have we seen the currency depreciate so much? 61 00:03:42,680 --> 00:03:45,040 Speaker 1: Well, first of all, David, I think that it's the 62 00:03:45,080 --> 00:03:49,520 Speaker 1: accumulated impact of sanctions. Iran has been in a state 63 00:03:49,560 --> 00:03:55,320 Speaker 1: of stagflation for about fifteen years. Second is that the markets, 64 00:03:55,640 --> 00:03:59,880 Speaker 1: especially since last fall when the UN sanctions on Iran 65 00:04:00,080 --> 00:04:04,000 Speaker 1: were restored and it became clear that there's basically no 66 00:04:04,160 --> 00:04:05,960 Speaker 1: light at the end of the tunnel for getting any 67 00:04:05,960 --> 00:04:09,680 Speaker 1: sanctions relieved anytime soon, and so there's no economic reprieve 68 00:04:09,720 --> 00:04:14,040 Speaker 1: around the corner. There was some significant capital flight and 69 00:04:14,120 --> 00:04:17,800 Speaker 1: dimming of hopes and expectations in the market in Iran, 70 00:04:18,480 --> 00:04:21,479 Speaker 1: and I think all of these factors came together and 71 00:04:21,560 --> 00:04:24,960 Speaker 1: created a perfect economic storm that the government simply did 72 00:04:25,040 --> 00:04:27,799 Speaker 1: not have any answers to. The middle class was already 73 00:04:27,800 --> 00:04:33,880 Speaker 1: hollowed out after years of sanctions, corruption and mismanagement. But 74 00:04:34,560 --> 00:04:37,440 Speaker 1: the government was better at trying to look after his 75 00:04:37,560 --> 00:04:41,440 Speaker 1: own core constituents, the lower strata of the Iranian society. 76 00:04:42,279 --> 00:04:45,520 Speaker 1: But again, there was no cushion left now to try 77 00:04:45,560 --> 00:04:47,000 Speaker 1: to bail them out anymore. 78 00:04:47,960 --> 00:04:50,880 Speaker 2: How has their government responded to these protests, Well. 79 00:04:50,680 --> 00:04:53,279 Speaker 1: Look, these protests I think have had three phases. The 80 00:04:53,360 --> 00:04:58,000 Speaker 1: first phase was the Pesition administration trying to see if 81 00:04:58,040 --> 00:05:03,200 Speaker 1: there was a way to placate these protests by offering dialogue, 82 00:05:03,640 --> 00:05:08,200 Speaker 1: offering subsidies seven dollars to every Iranian and hoping that 83 00:05:08,240 --> 00:05:11,440 Speaker 1: it would go away. It did not work because the 84 00:05:11,480 --> 00:05:16,200 Speaker 1: problems are so much deeper and widespread to be alleviated 85 00:05:16,760 --> 00:05:21,360 Speaker 1: just with marginal reforms like this. And then the second 86 00:05:21,440 --> 00:05:25,280 Speaker 1: week we started to see the clampdown the usual mo 87 00:05:25,480 --> 00:05:30,600 Speaker 1: of the Islamic Republic, which is repress and carry on 88 00:05:31,120 --> 00:05:34,880 Speaker 1: refused reforms. It was really back to that playbook. And 89 00:05:34,920 --> 00:05:39,760 Speaker 1: then President Trump threatened to intervene, and I think that 90 00:05:40,000 --> 00:05:44,640 Speaker 1: served as a perverse incentive for the regime to try 91 00:05:44,640 --> 00:05:48,240 Speaker 1: to wrap up these protests before the US could move 92 00:05:48,279 --> 00:05:52,520 Speaker 1: military assets to the region. And this is when we saw, 93 00:05:53,080 --> 00:05:58,560 Speaker 1: coinciding with last weekend and run, a very brutal crackdown. 94 00:05:59,000 --> 00:06:02,240 Speaker 1: The regime brought down the iron fist with speed and 95 00:06:02,320 --> 00:06:08,040 Speaker 1: ferocity that we've never seen before. The number of fatalities 96 00:06:08,080 --> 00:06:11,880 Speaker 1: now ranges in a few thousands, tens of thousands of 97 00:06:11,920 --> 00:06:13,080 Speaker 1: people have been arrested. 98 00:06:15,920 --> 00:06:17,839 Speaker 2: We are just a few months from the war back 99 00:06:17,880 --> 00:06:20,599 Speaker 2: in June, and you had US and Israel attacking a 100 00:06:20,600 --> 00:06:23,920 Speaker 2: lot of a run in infrastructure, targeting scientists, military officials. 101 00:06:24,520 --> 00:06:27,560 Speaker 2: How is that shaping the way the regime is responding 102 00:06:27,720 --> 00:06:29,440 Speaker 2: to these protests well. 103 00:06:30,640 --> 00:06:33,400 Speaker 1: As I said, Iran has had experience with protests before, 104 00:06:33,440 --> 00:06:37,760 Speaker 1: but this is really once in a generation phenomenon that 105 00:06:37,800 --> 00:06:40,800 Speaker 1: the regime was dealing with, and I think that made 106 00:06:40,839 --> 00:06:44,400 Speaker 1: it feel that it is facing an existential angst for 107 00:06:44,440 --> 00:06:49,720 Speaker 1: its survival, and it resulted in its resort to brutality 108 00:06:49,800 --> 00:06:52,840 Speaker 1: the kind of which we have not seen in decades. 109 00:06:53,480 --> 00:06:57,280 Speaker 1: I think the fact that the regime believed that Israel 110 00:06:57,680 --> 00:07:02,159 Speaker 1: would not just try to undermin it through military and 111 00:07:02,279 --> 00:07:06,080 Speaker 1: kinetic actions or sabotage of its nuclear or military facilities, 112 00:07:06,440 --> 00:07:11,800 Speaker 1: but also through subversion, also through infiltration. And of course 113 00:07:11,840 --> 00:07:16,000 Speaker 1: we saw in the Dream Conflict an extraordinary degree of 114 00:07:16,000 --> 00:07:20,520 Speaker 1: intelligence penetration by Israel into the Iranian system and society, 115 00:07:21,200 --> 00:07:26,000 Speaker 1: and Israel was openly talking about trying to topple the regime. 116 00:07:26,600 --> 00:07:29,920 Speaker 1: So some of that fear was not paranoia, some of 117 00:07:29,960 --> 00:07:34,440 Speaker 1: it was justified based on past experience. So all of 118 00:07:34,480 --> 00:07:38,800 Speaker 1: this provided more ammunition for those within the system. We're 119 00:07:38,880 --> 00:07:41,200 Speaker 1: arguing that this should be nipped in the butt as 120 00:07:41,240 --> 00:07:42,240 Speaker 1: quickly as possible. 121 00:07:43,880 --> 00:07:46,680 Speaker 2: One tool the regime has at its disposal is control 122 00:07:46,680 --> 00:07:48,840 Speaker 2: of the Internet, and we've seen that happen here over 123 00:07:48,880 --> 00:07:51,480 Speaker 2: the last few weeks. I'm curious how that shaped our 124 00:07:51,600 --> 00:07:55,160 Speaker 2: understanding of this protest movement, and beyond that, the effect 125 00:07:55,200 --> 00:07:57,840 Speaker 2: that that's had on protesters' ability to organize. 126 00:07:58,360 --> 00:08:02,040 Speaker 1: Look, the regime has no answer to the legitimate grievances 127 00:08:02,040 --> 00:08:07,080 Speaker 1: of its population other than repression and shutting down the internet, 128 00:08:07,120 --> 00:08:10,320 Speaker 1: as it has done repeatedly in the past. It serves 129 00:08:10,360 --> 00:08:13,480 Speaker 1: multiple purposes. First of all, when the regime turns off 130 00:08:13,480 --> 00:08:17,200 Speaker 1: the lights, the world doesn't understand the scale and scope 131 00:08:17,240 --> 00:08:21,559 Speaker 1: of the atrocities committed until the regime has managed to 132 00:08:21,720 --> 00:08:26,560 Speaker 1: re establish control. Partly, this time around, we know about 133 00:08:26,960 --> 00:08:30,360 Speaker 1: what has happened because the regime actually broadcasted it itself 134 00:08:30,880 --> 00:08:33,960 Speaker 1: broadcasted on state television, and the regime did that in 135 00:08:34,040 --> 00:08:37,959 Speaker 1: order to instill fear in the hearts of the protesters. 136 00:08:38,320 --> 00:08:43,319 Speaker 1: Is also to prevent communication and coordination between the protesters 137 00:08:43,880 --> 00:08:48,440 Speaker 1: and to make sure that the images of bravery in 138 00:08:48,480 --> 00:08:52,120 Speaker 1: one city do not spill over and encourage and incentivize 139 00:08:52,360 --> 00:08:56,719 Speaker 1: other cities to come join the protest. And finally, it 140 00:08:56,800 --> 00:09:02,040 Speaker 1: is to prevent cyber attacks or covert operations, as we know, 141 00:09:02,400 --> 00:09:06,880 Speaker 1: to prevent internal forces from being able to coaliesten to 142 00:09:06,960 --> 00:09:09,880 Speaker 1: bigger masses that would be hard for the regime to 143 00:09:09,880 --> 00:09:10,720 Speaker 1: contain and control. 144 00:09:11,000 --> 00:09:13,640 Speaker 2: Elon Musk says he's going to make his Starlink Internet 145 00:09:13,679 --> 00:09:16,120 Speaker 2: service available for free to Iranians. Is that likely to 146 00:09:16,160 --> 00:09:18,240 Speaker 2: make any kind of a difference here? 147 00:09:18,840 --> 00:09:22,840 Speaker 1: So, look, there are some images and some information trickling 148 00:09:22,880 --> 00:09:27,040 Speaker 1: out of Iran because the blackout is about ninety nine percent, 149 00:09:27,160 --> 00:09:30,360 Speaker 1: so it's about one percent of Internet connection that is 150 00:09:30,400 --> 00:09:33,120 Speaker 1: still established, and part of that I think is coming 151 00:09:33,160 --> 00:09:36,000 Speaker 1: through Starlink. So it's a positive thing that Elon Musk 152 00:09:36,200 --> 00:09:41,200 Speaker 1: is doing, but it's still awfully insufficient. It is very 153 00:09:41,200 --> 00:09:44,240 Speaker 1: difficult to get a comprehensive and accurate image of what's 154 00:09:44,240 --> 00:09:48,040 Speaker 1: happening on the ground. I have not been able to 155 00:09:48,120 --> 00:09:51,880 Speaker 1: reach my own family in the past six stays. I 156 00:09:51,920 --> 00:09:57,040 Speaker 1: don't know how they're doing. The landlines, mobile phones, Internet, 157 00:09:57,920 --> 00:10:00,440 Speaker 1: all of it is down, and so it's really possible 158 00:10:00,440 --> 00:10:06,240 Speaker 1: to get hold of them. 159 00:10:06,280 --> 00:10:08,760 Speaker 2: Coming up. What President Trump has said about the United 160 00:10:08,800 --> 00:10:11,600 Speaker 2: States is support of the protesters and what could happen 161 00:10:11,640 --> 00:10:15,199 Speaker 2: if the protest movement or intervention from overseas topples the 162 00:10:15,280 --> 00:10:31,160 Speaker 2: Iranian regime. The protest movement in Iran is facing a 163 00:10:31,280 --> 00:10:36,040 Speaker 2: violent crackdown, including threats to kill popular opposition leaders and activists, 164 00:10:36,640 --> 00:10:40,400 Speaker 2: that has drawn international condemnation, and President Trump has offered 165 00:10:40,440 --> 00:10:43,840 Speaker 2: protesters his support. At an event in the Oval Office 166 00:10:43,880 --> 00:10:47,120 Speaker 2: on Wednesday, Trump said he'd heard the executions were called off. 167 00:10:47,240 --> 00:10:50,920 Speaker 3: We have involved by very important sources on the other side, 168 00:10:50,960 --> 00:10:53,920 Speaker 3: and they've said the killing this up and the executions 169 00:10:53,960 --> 00:10:56,280 Speaker 3: won't take place. There was supposed to be a lot 170 00:10:56,280 --> 00:10:59,480 Speaker 3: of executions today and that the executions won't take place. 171 00:11:00,040 --> 00:11:03,000 Speaker 2: Also asked about the possibility of US military action in Iran, 172 00:11:03,240 --> 00:11:04,800 Speaker 2: which he still won't rule out. 173 00:11:04,920 --> 00:11:07,480 Speaker 1: Does mean a military action is now off the table 174 00:11:07,520 --> 00:11:08,120 Speaker 1: against Iran? 175 00:11:08,320 --> 00:11:10,599 Speaker 3: Or We're going to watch and see what the process is. 176 00:11:11,280 --> 00:11:14,280 Speaker 2: I asked Alivayas, the Iran Project director for the International 177 00:11:14,320 --> 00:11:18,600 Speaker 2: Crisis Group, to unpack Trump's comments. In recent days, President 178 00:11:18,640 --> 00:11:22,079 Speaker 2: Trump has been a very vocal supporter of the protesters. 179 00:11:22,120 --> 00:11:24,280 Speaker 2: He's threatened to twenty five percent tariff on goods from 180 00:11:24,280 --> 00:11:27,360 Speaker 2: any country that trades with Iran, and he's also encouraged 181 00:11:27,360 --> 00:11:30,679 Speaker 2: protesters to keep going, keep protesting. He wrote on social 182 00:11:30,720 --> 00:11:34,199 Speaker 2: media this week, take over your institutions. In another post, 183 00:11:34,240 --> 00:11:36,600 Speaker 2: he wrote help is on its way, with no specifics 184 00:11:36,640 --> 00:11:39,360 Speaker 2: about what that means, and when reporters asked him about that, 185 00:11:39,400 --> 00:11:42,880 Speaker 2: the President declined to elaborate. What is the potential for 186 00:11:43,000 --> 00:11:45,640 Speaker 2: US involvement here and what could it look like as 187 00:11:45,640 --> 00:11:46,080 Speaker 2: you see it? 188 00:11:46,440 --> 00:11:48,959 Speaker 1: To be honest, it's anybody's guests, But there is a 189 00:11:49,080 --> 00:11:52,640 Speaker 1: range of options available to the president in the category 190 00:11:52,679 --> 00:11:58,000 Speaker 1: of non kinetic I would say that overall, they're not 191 00:11:58,240 --> 00:12:01,160 Speaker 1: gonna move the needle of that month, because if you 192 00:12:01,480 --> 00:12:05,800 Speaker 1: engage in cyber attacks, for instance, to hamper the repressive 193 00:12:05,960 --> 00:12:10,640 Speaker 1: apparatus's ability to communicate, they can still you know, it's 194 00:12:10,640 --> 00:12:15,920 Speaker 1: a temporary measure. If you engage in sanctions or sanctions enforcement. 195 00:12:16,520 --> 00:12:19,160 Speaker 1: First of all, one has to remember that Iran is 196 00:12:19,200 --> 00:12:22,120 Speaker 1: already sanctioned to the hilt, and if the US is 197 00:12:22,160 --> 00:12:26,360 Speaker 1: to enforce, let's say, an oil embargo, it risks in 198 00:12:26,400 --> 00:12:29,640 Speaker 1: the process endangering one of the most critical choke points 199 00:12:29,640 --> 00:12:32,600 Speaker 1: in the world. And that would also have an inflationary 200 00:12:32,679 --> 00:12:35,280 Speaker 1: impact on the US as well, because gas prices will 201 00:12:35,320 --> 00:12:38,360 Speaker 1: go up in the same way that imposition of tariffs 202 00:12:38,360 --> 00:12:42,839 Speaker 1: on China, or on UAE or on Turkey, which are 203 00:12:43,280 --> 00:12:46,880 Speaker 1: trade partners of Iran, would also have an inflationary impact 204 00:12:47,480 --> 00:12:50,959 Speaker 1: on the United States, and in any case, it's unlikely 205 00:12:51,120 --> 00:12:54,800 Speaker 1: to have an immediate impact that would save the protesters. 206 00:12:55,280 --> 00:12:57,480 Speaker 1: So the non kinetic options I really don't think are 207 00:12:57,520 --> 00:13:03,680 Speaker 1: going to be effective in the short run. Kinetic options 208 00:13:04,360 --> 00:13:10,120 Speaker 1: come with huge risks and unforeseen consequences. The president can 209 00:13:10,240 --> 00:13:14,520 Speaker 1: decide to go for political decapitation of the running regime, 210 00:13:14,600 --> 00:13:19,880 Speaker 1: try to eliminate the Supreme leader or the government or 211 00:13:20,160 --> 00:13:23,640 Speaker 1: additional military leaders. But there are two facts about the 212 00:13:23,720 --> 00:13:26,320 Speaker 1: running regime that one should not underestimate. One is that 213 00:13:26,360 --> 00:13:31,199 Speaker 1: it's deeply entrenched, just like in Venezuela, where the president 214 00:13:31,200 --> 00:13:34,040 Speaker 1: decided that he's just going to remove the head and 215 00:13:34,280 --> 00:13:36,920 Speaker 1: leave the rest of the body of that regime in place. 216 00:13:37,520 --> 00:13:41,360 Speaker 1: And second is that it's also deeply benched regime. It 217 00:13:41,520 --> 00:13:45,760 Speaker 1: quickly replaced all the generals who were killed in June 218 00:13:46,360 --> 00:13:49,960 Speaker 1: and started fighting back against Israel. And even in a 219 00:13:50,000 --> 00:13:54,319 Speaker 1: scenario that one creates political vacuum at the top of 220 00:13:54,360 --> 00:13:59,360 Speaker 1: the system, it might be replaced by either a more 221 00:13:59,400 --> 00:14:04,600 Speaker 1: repressive set of leaders within the Revolutionary Guards, or it 222 00:14:04,679 --> 00:14:08,640 Speaker 1: might be replaced by violent chaos if we end up 223 00:14:08,679 --> 00:14:11,640 Speaker 1: in a free for all. In Iran, there is almost 224 00:14:11,720 --> 00:14:15,199 Speaker 1: half a ton of near weapons grade uranium that is 225 00:14:15,280 --> 00:14:18,920 Speaker 1: unaccounted for in Iran. That's sufficient for ten nuclear weapons 226 00:14:18,920 --> 00:14:22,280 Speaker 1: and maybe dozens of dirty bombs, and this would be 227 00:14:22,280 --> 00:14:26,240 Speaker 1: a major security breach for not just Iran and the region, 228 00:14:26,440 --> 00:14:28,200 Speaker 1: but the rest of the world. 229 00:14:29,120 --> 00:14:32,160 Speaker 2: This week, German Chancellor Friedrich Mertz predicted the Islamic Republic 230 00:14:32,240 --> 00:14:34,600 Speaker 2: is in its quote final days. He said, when a 231 00:14:34,680 --> 00:14:37,440 Speaker 2: regime can only hold on to power through violence, it's 232 00:14:37,440 --> 00:14:41,880 Speaker 2: effectively finished. Is this a regime on the brink of collapse? 233 00:14:42,720 --> 00:14:47,080 Speaker 1: Look, the Islamic Republic is in a debt spiral without 234 00:14:47,080 --> 00:14:52,800 Speaker 1: any doubt. But when it would collapse is anybody's guests. 235 00:14:52,960 --> 00:14:56,960 Speaker 1: I've been hearing these predictions literally for decades, and the 236 00:14:57,000 --> 00:15:00,880 Speaker 1: reality is that other regimes like the the Syrian regime 237 00:15:01,360 --> 00:15:05,120 Speaker 1: survived on use of lethal force and repression for many years, 238 00:15:05,440 --> 00:15:10,200 Speaker 1: so that Saddam Hussein and it eventually required foreign military intervention. 239 00:15:11,040 --> 00:15:14,400 Speaker 1: So it's hard to predict when the Islamic Republic will collapse. 240 00:15:14,800 --> 00:15:17,600 Speaker 1: But there are certain things that are absolutely clear. This 241 00:15:17,640 --> 00:15:20,120 Speaker 1: is a regime that is at a dead end. It 242 00:15:20,240 --> 00:15:26,360 Speaker 1: has been ideologically bankrupt, economically bankrupt, politically at a dead end. 243 00:15:26,840 --> 00:15:29,600 Speaker 1: Even if it had a little bit of legitimacy left 244 00:15:29,960 --> 00:15:35,440 Speaker 1: because its social contract was defined by providing safety and 245 00:15:35,560 --> 00:15:39,880 Speaker 1: security instead of prosperity and pluralism. Even that fell apart 246 00:15:40,000 --> 00:15:45,680 Speaker 1: last year when it exposed the country to foreign aggression 247 00:15:45,800 --> 00:15:50,320 Speaker 1: as a result of its policies. So overall, I do 248 00:15:50,360 --> 00:15:53,320 Speaker 1: believe that the Islamic Republic is doomed to fail. But 249 00:15:53,440 --> 00:15:56,040 Speaker 1: when that happens, I think it's anybody's guest. 250 00:15:57,760 --> 00:15:59,280 Speaker 2: Let me ask you last that we've talked a bit 251 00:15:59,280 --> 00:16:02,200 Speaker 2: about the the transition would mean domestically, let me pull 252 00:16:02,240 --> 00:16:04,400 Speaker 2: back and ask about what it would mean for the 253 00:16:04,400 --> 00:16:06,840 Speaker 2: Middle East and for the world more broadly. I'm thinking 254 00:16:06,840 --> 00:16:10,000 Speaker 2: about the Sui's, the Qataris, the Israelis, also thinking about 255 00:16:10,120 --> 00:16:14,480 Speaker 2: Russians and the Chinese. What would that moment of transition 256 00:16:14,680 --> 00:16:18,000 Speaker 2: mean for the world as a whole, Well. 257 00:16:17,840 --> 00:16:21,200 Speaker 1: It depends, David. I think the status quo is attractive 258 00:16:21,520 --> 00:16:27,280 Speaker 1: for many because Iran is basically in a box. It's 259 00:16:27,400 --> 00:16:35,000 Speaker 1: dependent economically on China, militarily on Russia, and it is 260 00:16:35,200 --> 00:16:39,080 Speaker 1: not able to really pose an existential threat to most 261 00:16:39,120 --> 00:16:42,320 Speaker 1: of its neighbors and even to Israel in terms of 262 00:16:42,360 --> 00:16:44,960 Speaker 1: the threat it poses to Israel, as has been weekend, 263 00:16:45,480 --> 00:16:48,640 Speaker 1: So as long as it doesn't lash out, I think 264 00:16:48,680 --> 00:16:52,480 Speaker 1: a lot of Iran's neighbors would prefer Iran to remain 265 00:16:52,840 --> 00:16:55,960 Speaker 1: in the weak state that it is right now. Now, 266 00:16:56,160 --> 00:17:00,360 Speaker 1: a good scenario of Iran fulfilling its potential turning into 267 00:17:00,400 --> 00:17:09,159 Speaker 1: a G twenty economy, pluralistic democratic society is actually unattractive 268 00:17:09,720 --> 00:17:12,800 Speaker 1: to most of Iran's neighbors. To some of Iran's neighbors 269 00:17:12,840 --> 00:17:17,879 Speaker 1: who have monarchies and our authocracies, this basically sets a 270 00:17:17,960 --> 00:17:22,760 Speaker 1: precedent for their own populations that could be destabilizing to 271 00:17:22,800 --> 00:17:25,520 Speaker 1: some of Iran's neighbors who have been able to reap 272 00:17:25,640 --> 00:17:29,000 Speaker 1: the economic benefits of Iran's isolation, all of a sudden 273 00:17:29,080 --> 00:17:33,080 Speaker 1: there will be a major competitor, a major energy exporter, 274 00:17:33,240 --> 00:17:38,280 Speaker 1: a major attraction for foreign investment, and this could be 275 00:17:38,440 --> 00:17:44,960 Speaker 1: quite problematic. Also, Iran could be able to once again 276 00:17:45,040 --> 00:17:48,280 Speaker 1: influence US policy in the way that it was doing 277 00:17:48,400 --> 00:17:51,720 Speaker 1: prior to the nineteen seventy nine revolution. That would then 278 00:17:51,760 --> 00:17:56,760 Speaker 1: diminish the privileged position that some countries like Israel have now. 279 00:17:56,800 --> 00:18:00,320 Speaker 1: The worst case scenario, which is Iran becoming another failed state, 280 00:18:00,560 --> 00:18:04,720 Speaker 1: is also pretty unattractive for most of Iran's neighbors. With 281 00:18:04,840 --> 00:18:07,560 Speaker 1: the exception of Israel, which I think will be okay. 282 00:18:07,640 --> 00:18:13,320 Speaker 1: With Iran descending into chaos and it's fought away from Israel. 283 00:18:13,400 --> 00:18:16,680 Speaker 1: As long as it's internally focused, it's not a problem. 284 00:18:16,840 --> 00:18:20,400 Speaker 1: But for Turkey there will be probably millions of refugees 285 00:18:21,040 --> 00:18:24,920 Speaker 1: who would cross the border. For the Gulf States who 286 00:18:24,960 --> 00:18:28,560 Speaker 1: want to invest on their economic plans and future prosperity, 287 00:18:29,240 --> 00:18:32,280 Speaker 1: a country of ninety million being engaged in a civil 288 00:18:32,280 --> 00:18:36,640 Speaker 1: strife with a lot of lethal weapons and facile material 289 00:18:37,160 --> 00:18:41,639 Speaker 1: being unmonitored is quite problematic. So I think the worst 290 00:18:41,680 --> 00:18:46,359 Speaker 1: and the best case scenario are not attractive for Iran's neighbors. 291 00:18:46,720 --> 00:18:51,119 Speaker 1: The STATISCO is, but unfortunately the STATUSCO also doesn't appear 292 00:18:51,160 --> 00:18:52,600 Speaker 1: to be very sustainable. 293 00:18:58,440 --> 00:19:01,240 Speaker 2: This is the Big Take from Bloomberg New I'm David Gurat. 294 00:19:01,240 --> 00:19:03,520 Speaker 2: To get more from The Big Take and unlimited access 295 00:19:03,560 --> 00:19:06,520 Speaker 2: to all of Bloomberg dot Com, subscribe today at Bloomberg 296 00:19:06,560 --> 00:19:10,000 Speaker 2: dot com slash podcast Offer. If you liked this episode, 297 00:19:10,160 --> 00:19:12,200 Speaker 2: make sure to follow and review The Big Take wherever 298 00:19:12,200 --> 00:19:14,600 Speaker 2: you listen to podcasts. It helps people find the show. 299 00:19:15,040 --> 00:19:16,880 Speaker 2: Thanks for listening. We'll be back tomorrow.