While the most noticeable sign of trouble in Iran in recent days is the tumble of the rial, which on Tuesday continued to plunge by nine percent to an all-time low in the currency markets - there are other signals that things are afoot in Tehran.
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President Mahmoud Ahmadinejad said Tuesday at a press conference that despite Western sanctions, Iran succeeded in financing $26 billion in imports in the first half of 2012, down only marginally from the same period in 2011. He blamed foreign powers and local speculators for bringing down the rial and defended his government's decision to cut off subsidies, a step which has boosted inflation and played a major role in the devaluation.
But as he tries to blame hostile elements, it seems likely that he is now being set up as the main culprit for the financial crisis.
Last week, the lame-duck president with only eight months to go in office - and who has grown increasingly estranged from Supreme Leader Ali Khamenei - took to the podium at the United Nations General Assembly. There, he was criticized openly by Mansour Haghighatpour, the deputy chairman of the parliament's national security committee, for the size of his entourage to New York. "Many of them have only gone there for a picnic," said Haghighatpour in a comment that was carried by semi-official news agencies and would have been unimaginable during previous General Assembly visits by Ahmadinejad.
The conservative circle around Khamenei has other reasons to move against Ahmadinejad, who has been trying to build his own independent base of power (some of his key allies have been arrested over the last week). But the economic crisis has created the ideal circumstance for his enemies to totally discredit him and to deflect criticism away from the regime.
Three years ago, the Green Revolution - which threatened the government's hold on power - began following allegations of election fraud that returned Ahmadinejad for a second term. Then, the Revolutionary Guard, with Khamenei's backing, ruthlessly suppressed the pro-democracy demonstrations, ensuring Ahmadinejad's presidency. Now they have to deal with the simmering unrest over the financial hardships while clamping down on the president's political camp, and pn any other potential rivals of Khamenei.
Last month, they moved to neutralize challenges from another former Iranian president, Akbar Hashemi Rafsanjani, still a figure of consequence despite having left office fifteen years ago. The old power-broker is feared by many in Tehran for the influence he wields. In what was seen as a warning shot against any designs he may have on returning to power, two of his children - who are aligned with reformist groups - were arrested for "anti-government propaganda." The fact that the regime has not moved against Rafsanjani personally, securing instead his son and daughter as bargaining chips, is a sign of how insecure they currently feel.
The Green Revolution may have failed, petering out after the bloody repression, but it was a source of inspiration to others around the Islamic world, especially in its use of social media to galvanize protest. The chain of revolutions in Arab countries was clearly linked to the Iranian students' brave uprising - and the conservatives have been on the lookout ever since.
Last week, they tried to shut down all access from Iranian computers to Google's search engine and Gmail accounts, ostensibly because of the "Innocence of Muslims" youtube trailer. Yesterday, they reopened access, partly due to the success of many Iranians in continuing to use Google through proxies and VPN software, which grants computer-users access to the Internet through servers based in other countries. Blocking Google and Gmail was also a step that came under attack from Iranian politicians. Meanwhile, the regime's plans to launch a Hallal intranet network - which will cut Iranians off the web entirely, allowing them access only to local sanitized sites - are encountering difficulties. Setting up such a network poses major technological problems and is opposed by the business community, which needs the Internet for foreign commerce (difficult enough given the Western sanctions on the Islamic Republic.)
Veteran observers of the Iranian scene do not believe there is much hope of seeing a return of the Green Revolution soon. Laura Secor, one of the sharpest "Iran-gazers," wrote last week in the New Yorker that "the regime has never had much problem living with popular discontent." Avigdor Lieberman disagrees, saying in his interview with Haaretz on Sunday that he sees a Tahrir-style uprising erupting in Tehran in the run-up to the presidential elections next summer. Reports that Khamenei is considering a constitutional change that would cancel the office of the president and save him the bother seem to indicate that his advisers are seeing something very similar.