Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Protests over economic conditions in Iran have roiled the country
Speaker 2: for weeks. Anti government protests in Iran have entered a
Speaker 2: thirteen day as the country faces economic.
Speaker 1: Terms nationwide movement that has now swept through all thirty
Speaker 1: one provinces.
Speaker 2: The death toll in Iran may be in the thousands,
Speaker 2: higher than previously feared. And while it's not the first
Speaker 2: time Iran's regime has faced massive demonstrations, this time feels different.
Speaker 1: What was unique about it, I think, is that the
Speaker 1: sheer desperation of the population brought all segments of the
Speaker 1: society together.
Speaker 2: Olivyas is the Iran Project director for the International Crisis Group,
Speaker 2: an independent policy research organization that tracks conflicts around the world,
Speaker 2: and he says, these protests in Iran are widespread.
Speaker 1: Rich and poor, old and young, secular and pious, and
Speaker 1: also it's spread geographically in places that we had not
Speaker 1: seen protests before, some of the regime's strongholds, including rural areas,
Speaker 1: and then again it's quickly spread to bigger cities.
Speaker 2: What also sets these demonstrations apart is the kind of
Speaker 2: support they're getting from a sitting US president. In a
Speaker 2: social media post, the Commander in chief said, quote, we
Speaker 2: are locked and loaded and ready to go if Iran
Speaker 2: shoots and violently kills peaceful protesters. The Iran regime was
Speaker 2: in a precarious position before this. Israel and the US
Speaker 2: attacked Iran in June. The country's currency, the Iranian reale,
Speaker 2: has weakened dramatically in recent months.
Speaker 1: And so you put all of those things together, it's
Speaker 1: created not just a national sense of desperation, but also
Speaker 1: a sense of finality that we're getting close to a
Speaker 1: moment of absolute deadlock across the board. The regime was
Speaker 1: and is failing, and the people, I think were just
Speaker 1: fed up with it.
Speaker 2: I'm David Gura, and this is the big take from
Speaker 2: Bloomberg News today on the show, weeks of protests in
Speaker 2: Iran and the possibility of international support threatened the Iranian regime,
Speaker 2: How we got here and what could happen next. Iran
Speaker 2: has been led by a religious authoritarian regime since nineteen
Speaker 2: seventy nine, and it has faced protests since then, but
Speaker 2: they've always been quashed by Iran's military and security forces,
Speaker 2: which are aligned with the regime. Olivayaz, the Iran Project
Speaker 2: director for the International Crisis Group, says, there is something
Speaker 2: unique about the demonstrations that are currently taking place across Iran.
Speaker 1: Iran is not unfamiliar with protests. This time, the trigger
Speaker 1: was economic. The Iranian currency has lost about fifty percent
Speaker 1: of its value in the course of the past few months,
Speaker 1: ninety nine percent of his value in fact, since the
Speaker 1: beginning of the revolution. And the economic downturn in the
Speaker 1: past few weeks created a real crisis, and the merchants
Speaker 1: in bazaar came to the streets protesting the market volatility.
Speaker 1: I think they never imagined that they would unleash an
Speaker 1: avalanche that basically covered the entire country very quickly and
Speaker 1: fantastasized into an immediate demand for regime change. Now, of course,
Speaker 1: we have seen this before. It usually takes maybe a
Speaker 1: day or two for these protests to start spreading, but
Speaker 1: this was almost immediate.
Speaker 2: As you mentioned, in twenty twenty five, the Iranian real
Speaker 2: slumped by about forty five percent against the US dollar.
Speaker 2: We've seen this dramatic weakening. What accounts for that? Why
Speaker 2: have we seen the currency depreciate so much?
Speaker 1: Well, first of all, David, I think that it's the
Speaker 1: accumulated impact of sanctions. Iran has been in a state
Speaker 1: of stagflation for about fifteen years. Second is that the markets,
Speaker 1: especially since last fall when the UN sanctions on Iran
Speaker 1: were restored and it became clear that there's basically no
Speaker 1: light at the end of the tunnel for getting any
Speaker 1: sanctions relieved anytime soon, and so there's no economic reprieve
Speaker 1: around the corner. There was some significant capital flight and
Speaker 1: dimming of hopes and expectations in the market in Iran,
Speaker 1: and I think all of these factors came together and
Speaker 1: created a perfect economic storm that the government simply did
Speaker 1: not have any answers to. The middle class was already
Speaker 1: hollowed out after years of sanctions, corruption and mismanagement. But
Speaker 1: the government was better at trying to look after his
Speaker 1: own core constituents, the lower strata of the Iranian society.
Speaker 1: But again, there was no cushion left now to try
Speaker 1: to bail them out anymore.
Speaker 2: How has their government responded to these protests, Well.
Speaker 1: Look, these protests I think have had three phases. The
Speaker 1: first phase was the Pesition administration trying to see if
Speaker 1: there was a way to placate these protests by offering dialogue,
Speaker 1: offering subsidies seven dollars to every Iranian and hoping that
Speaker 1: it would go away. It did not work because the
Speaker 1: problems are so much deeper and widespread to be alleviated
Speaker 1: just with marginal reforms like this. And then the second
Speaker 1: week we started to see the clampdown the usual mo
Speaker 1: of the Islamic Republic, which is repress and carry on
Speaker 1: refused reforms. It was really back to that playbook. And
Speaker 1: then President Trump threatened to intervene, and I think that
Speaker 1: served as a perverse incentive for the regime to try
Speaker 1: to wrap up these protests before the US could move
Speaker 1: military assets to the region. And this is when we saw,
Speaker 1: coinciding with last weekend and run, a very brutal crackdown.
Speaker 1: The regime brought down the iron fist with speed and
Speaker 1: ferocity that we've never seen before. The number of fatalities
Speaker 1: now ranges in a few thousands, tens of thousands of
Speaker 1: people have been arrested.
Speaker 2: We are just a few months from the war back
Speaker 2: in June, and you had US and Israel attacking a
Speaker 2: lot of a run in infrastructure, targeting scientists, military officials.
Speaker 2: How is that shaping the way the regime is responding
Speaker 2: to these protests well.
Speaker 1: As I said, Iran has had experience with protests before,
Speaker 1: but this is really once in a generation phenomenon that
Speaker 1: the regime was dealing with, and I think that made
Speaker 1: it feel that it is facing an existential angst for
Speaker 1: its survival, and it resulted in its resort to brutality
Speaker 1: the kind of which we have not seen in decades.
Speaker 1: I think the fact that the regime believed that Israel
Speaker 1: would not just try to undermin it through military and
Speaker 1: kinetic actions or sabotage of its nuclear or military facilities,
Speaker 1: but also through subversion, also through infiltration. And of course
Speaker 1: we saw in the Dream Conflict an extraordinary degree of
Speaker 1: intelligence penetration by Israel into the Iranian system and society,
Speaker 1: and Israel was openly talking about trying to topple the regime.
Speaker 1: So some of that fear was not paranoia, some of
Speaker 1: it was justified based on past experience. So all of
Speaker 1: this provided more ammunition for those within the system. We're
Speaker 1: arguing that this should be nipped in the butt as
Speaker 1: quickly as possible.
Speaker 2: One tool the regime has at its disposal is control
Speaker 2: of the Internet, and we've seen that happen here over
Speaker 2: the last few weeks. I'm curious how that shaped our
Speaker 2: understanding of this protest movement, and beyond that, the effect
Speaker 2: that that's had on protesters' ability to organize.
Speaker 1: Look, the regime has no answer to the legitimate grievances
Speaker 1: of its population other than repression and shutting down the internet,
Speaker 1: as it has done repeatedly in the past. It serves
Speaker 1: multiple purposes. First of all, when the regime turns off
Speaker 1: the lights, the world doesn't understand the scale and scope
Speaker 1: of the atrocities committed until the regime has managed to
Speaker 1: re establish control. Partly, this time around, we know about
Speaker 1: what has happened because the regime actually broadcasted it itself
Speaker 1: broadcasted on state television, and the regime did that in
Speaker 1: order to instill fear in the hearts of the protesters.
Speaker 1: Is also to prevent communication and coordination between the protesters
Speaker 1: and to make sure that the images of bravery in
Speaker 1: one city do not spill over and encourage and incentivize
Speaker 1: other cities to come join the protest. And finally, it
Speaker 1: is to prevent cyber attacks or covert operations, as we know,
Speaker 1: to prevent internal forces from being able to coaliesten to
Speaker 1: bigger masses that would be hard for the regime to
Speaker 1: contain and control.
Speaker 2: Elon Musk says he's going to make his Starlink Internet
Speaker 2: service available for free to Iranians. Is that likely to
Speaker 2: make any kind of a difference here?
Speaker 1: So, look, there are some images and some information trickling
Speaker 1: out of Iran because the blackout is about ninety nine percent,
Speaker 1: so it's about one percent of Internet connection that is
Speaker 1: still established, and part of that I think is coming
Speaker 1: through Starlink. So it's a positive thing that Elon Musk
Speaker 1: is doing, but it's still awfully insufficient. It is very
Speaker 1: difficult to get a comprehensive and accurate image of what's
Speaker 1: happening on the ground. I have not been able to
Speaker 1: reach my own family in the past six stays. I
Speaker 1: don't know how they're doing. The landlines, mobile phones, Internet,
Speaker 1: all of it is down, and so it's really possible
Speaker 1: to get hold of them.
Speaker 2: Coming up. What President Trump has said about the United
Speaker 2: States is support of the protesters and what could happen
Speaker 2: if the protest movement or intervention from overseas topples the
Speaker 2: Iranian regime. The protest movement in Iran is facing a
Speaker 2: violent crackdown, including threats to kill popular opposition leaders and activists,
Speaker 2: that has drawn international condemnation, and President Trump has offered
Speaker 2: protesters his support. At an event in the Oval Office
Speaker 2: on Wednesday, Trump said he'd heard the executions were called off.
Speaker 3: We have involved by very important sources on the other side,
Speaker 3: and they've said the killing this up and the executions
Speaker 3: won't take place. There was supposed to be a lot
Speaker 3: of executions today and that the executions won't take place.
Speaker 2: Also asked about the possibility of US military action in Iran,
Speaker 2: which he still won't rule out.
Speaker 1: Does mean a military action is now off the table
Speaker 1: against Iran?
Speaker 3: Or We're going to watch and see what the process is.
Speaker 2: I asked Alivayas, the Iran Project director for the International
Speaker 2: Crisis Group, to unpack Trump's comments. In recent days, President
Speaker 2: Trump has been a very vocal supporter of the protesters.
Speaker 2: He's threatened to twenty five percent tariff on goods from
Speaker 2: any country that trades with Iran, and he's also encouraged
Speaker 2: protesters to keep going, keep protesting. He wrote on social
Speaker 2: media this week, take over your institutions. In another post,
Speaker 2: he wrote help is on its way, with no specifics
Speaker 2: about what that means, and when reporters asked him about that,
Speaker 2: the President declined to elaborate. What is the potential for
Speaker 2: US involvement here and what could it look like as
Speaker 2: you see it?
Speaker 1: To be honest, it's anybody's guests, But there is a
Speaker 1: range of options available to the president in the category
Speaker 1: of non kinetic I would say that overall, they're not
Speaker 1: gonna move the needle of that month, because if you
Speaker 1: engage in cyber attacks, for instance, to hamper the repressive
Speaker 1: apparatus's ability to communicate, they can still you know, it's
Speaker 1: a temporary measure. If you engage in sanctions or sanctions enforcement.
Speaker 1: First of all, one has to remember that Iran is
Speaker 1: already sanctioned to the hilt, and if the US is
Speaker 1: to enforce, let's say, an oil embargo, it risks in
Speaker 1: the process endangering one of the most critical choke points
Speaker 1: in the world. And that would also have an inflationary
Speaker 1: impact on the US as well, because gas prices will
Speaker 1: go up in the same way that imposition of tariffs
Speaker 1: on China, or on UAE or on Turkey, which are
Speaker 1: trade partners of Iran, would also have an inflationary impact
Speaker 1: on the United States, and in any case, it's unlikely
Speaker 1: to have an immediate impact that would save the protesters.
Speaker 1: So the non kinetic options I really don't think are
Speaker 1: going to be effective in the short run. Kinetic options
Speaker 1: come with huge risks and unforeseen consequences. The president can
Speaker 1: decide to go for political decapitation of the running regime,
Speaker 1: try to eliminate the Supreme leader or the government or
Speaker 1: additional military leaders. But there are two facts about the
Speaker 1: running regime that one should not underestimate. One is that
Speaker 1: it's deeply entrenched, just like in Venezuela, where the president
Speaker 1: decided that he's just going to remove the head and
Speaker 1: leave the rest of the body of that regime in place.
Speaker 1: And second is that it's also deeply benched regime. It
Speaker 1: quickly replaced all the generals who were killed in June
Speaker 1: and started fighting back against Israel. And even in a
Speaker 1: scenario that one creates political vacuum at the top of
Speaker 1: the system, it might be replaced by either a more
Speaker 1: repressive set of leaders within the Revolutionary Guards, or it
Speaker 1: might be replaced by violent chaos if we end up
Speaker 1: in a free for all. In Iran, there is almost
Speaker 1: half a ton of near weapons grade uranium that is
Speaker 1: unaccounted for in Iran. That's sufficient for ten nuclear weapons
Speaker 1: and maybe dozens of dirty bombs, and this would be
Speaker 1: a major security breach for not just Iran and the region,
Speaker 1: but the rest of the world.
Speaker 2: This week, German Chancellor Friedrich Mertz predicted the Islamic Republic
Speaker 2: is in its quote final days. He said, when a
Speaker 2: regime can only hold on to power through violence, it's
Speaker 2: effectively finished. Is this a regime on the brink of collapse?
Speaker 1: Look, the Islamic Republic is in a debt spiral without
Speaker 1: any doubt. But when it would collapse is anybody's guests.
Speaker 1: I've been hearing these predictions literally for decades, and the
Speaker 1: reality is that other regimes like the the Syrian regime
Speaker 1: survived on use of lethal force and repression for many years,
Speaker 1: so that Saddam Hussein and it eventually required foreign military intervention.
Speaker 1: So it's hard to predict when the Islamic Republic will collapse.
Speaker 1: But there are certain things that are absolutely clear. This
Speaker 1: is a regime that is at a dead end. It
Speaker 1: has been ideologically bankrupt, economically bankrupt, politically at a dead end.
Speaker 1: Even if it had a little bit of legitimacy left
Speaker 1: because its social contract was defined by providing safety and
Speaker 1: security instead of prosperity and pluralism. Even that fell apart
Speaker 1: last year when it exposed the country to foreign aggression
Speaker 1: as a result of its policies. So overall, I do
Speaker 1: believe that the Islamic Republic is doomed to fail. But
Speaker 1: when that happens, I think it's anybody's guest.
Speaker 2: Let me ask you last that we've talked a bit
Speaker 2: about the the transition would mean domestically, let me pull
Speaker 2: back and ask about what it would mean for the
Speaker 2: Middle East and for the world more broadly. I'm thinking
Speaker 2: about the Sui's, the Qataris, the Israelis, also thinking about
Speaker 2: Russians and the Chinese. What would that moment of transition
Speaker 2: mean for the world as a whole, Well.
Speaker 1: It depends, David. I think the status quo is attractive
Speaker 1: for many because Iran is basically in a box. It's
Speaker 1: dependent economically on China, militarily on Russia, and it is
Speaker 1: not able to really pose an existential threat to most
Speaker 1: of its neighbors and even to Israel in terms of
Speaker 1: the threat it poses to Israel, as has been weekend,
Speaker 1: So as long as it doesn't lash out, I think
Speaker 1: a lot of Iran's neighbors would prefer Iran to remain
Speaker 1: in the weak state that it is right now. Now,
Speaker 1: a good scenario of Iran fulfilling its potential turning into
Speaker 1: a G twenty economy, pluralistic democratic society is actually unattractive
Speaker 1: to most of Iran's neighbors. To some of Iran's neighbors
Speaker 1: who have monarchies and our authocracies, this basically sets a
Speaker 1: precedent for their own populations that could be destabilizing to
Speaker 1: some of Iran's neighbors who have been able to reap
Speaker 1: the economic benefits of Iran's isolation, all of a sudden
Speaker 1: there will be a major competitor, a major energy exporter,
Speaker 1: a major attraction for foreign investment, and this could be
Speaker 1: quite problematic. Also, Iran could be able to once again
Speaker 1: influence US policy in the way that it was doing
Speaker 1: prior to the nineteen seventy nine revolution. That would then
Speaker 1: diminish the privileged position that some countries like Israel have now.
Speaker 1: The worst case scenario, which is Iran becoming another failed state,
Speaker 1: is also pretty unattractive for most of Iran's neighbors. With
Speaker 1: the exception of Israel, which I think will be okay.
Speaker 1: With Iran descending into chaos and it's fought away from Israel.
Speaker 1: As long as it's internally focused, it's not a problem.
Speaker 1: But for Turkey there will be probably millions of refugees
Speaker 1: who would cross the border. For the Gulf States who
Speaker 1: want to invest on their economic plans and future prosperity,
Speaker 1: a country of ninety million being engaged in a civil
Speaker 1: strife with a lot of lethal weapons and facile material
Speaker 1: being unmonitored is quite problematic. So I think the worst
Speaker 1: and the best case scenario are not attractive for Iran's neighbors.
Speaker 1: The STATISCO is, but unfortunately the STATUSCO also doesn't appear
Speaker 1: to be very sustainable.
Speaker 2: This is the Big Take from Bloomberg New I'm David Gurat.
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