‘Change is inevitable’: What is next for Iran?

Protests in Iran have petered out. Tens of thousands have been arrested. And those accused of supporting the unrest have had business assets seized and are being pursued on “terrorism” charges. The authorities – for now – have reasserted control.

Yet, in the shadow of the apparent calm, the very same grievances that sparked the unrest remain, leaving Iran with little choice but to make tough compromises to win sanctions relief and fix the economy or face further upheaval, experts say. With a battered economy, a weakened network of regional allies and the looming threat of a US attack, Iran is at a crossroads.
“This is not a stable status quo – it’s just not tenable,” said Ali Vaez, director of the Iran Project at the International Crisis Group. “I am not predicting that the system will hit rock bottom tomorrow, but it’s in a spiral and from this point on, it can only go down if it refuses to change”.

The recent demonstrations erupted in late December when protests over a currency collapse morphed into a nationwide upheaval calling for the overthrow of the Islamic republic – Iran’s system of governance.

The authorities’ response led to one of the most violent confrontations since the country’s 1979 revolution.

Iranian state media said the protests had left 3,117 people dead, including 2,427 civilians and members of the security forces. US-based human rights activists say that more than 5,000 people have been killed. Al Jazeera was not able to independently verify the figures.

Economic crisis
Protests in past years, such as the unrest sparked by a fuel price hike in 2019 or the women-led demonstrations in 2022, were followed by the state dispensing subsidies and loosening up on social restrictions. But this time around, it has limited options for addressing the distress that sparked the recent demonstrations.
Due to decades of international sanctions, as well as mismanagement and corruption, the Iranian rial’s value has nose-dived, and oil revenues have shrunk. Inflation last year peaked at more than 42 percent, according to International Monetary Fund data. By comparison, the rate was at 6.8 in 2016 – a year after Iran and world powers signed a deal that curbed Iran’s nuclear activities in exchange for sanctions relief. US President Donald Trump pulled out of the deal in 2018 – during his first term in office – and reimposed sanctions.

On top of that, Iran suffers from electricity outages and chronic water shortages, making life increasingly difficult for the average citizen.

To get some sanctions relief, Iran needs to negotiate a deal with the Trump administration. But that would require Khamenei making concessions on what have been Iran’s core foreign policy pillars, namely its nuclear programme, ballistic missiles and supporting a network of allies across the region.

They have been key components of Iran’s “forward defence” strategy – a military doctrine aimed at preventing fighting from reaching Iranian territory. Changes to any of these elements would represent a profound shift in the security architecture built up by Khamenei. While in the past, the supreme leader has shown openness to partially curbing the nuclear programme, concessions over missiles and the so-called axis of resistance have been non-negotiable.

“It is unclear whether Iran is willing to formally accept restrictions” on these three elements, said Mohammad Ali Shabani, an Iran analyst and editor of news site Amwaj.media. “As Trump has threatened a renewed bombing campaign if Iran resumes enrichment, Khamenei seems paralysed in his decision-making,” he added.

Trump has said that he wants Iran to dismantle its nuclear infrastructure entirely, an option that Iran has ruled out, insisting that its enrichment programme is for civilian purposes.

Concerning support for non-state actors in the region, Iran has been working on reconfiguring that network following the war last June with Israel, said Halireza Azizi, visiting fellow at the German Institute for International and Security Affairs.

Israel has, in the past few years, degraded the arsenal and decapitated the leadership of what was Iran’s strongest ally in the region, Lebanon’s Hezbollah. Non-state actors in Iraq have become more involved in that country’s political system and, therefore, more cautious, and the regime of Bashar al-Assad in Syria has collapsed. And finally, Iran itself was directly attacked by Israel, the first time it has faced a full-scale attack from its chief regional enemy.
After that war, a heated debate on the actual benefit of working with non-state actors ensued in Iran, Azizi said. The argument that prevailed was that Iranian soil had been struck only after regional allies were weakened, and not before.

“So the policy [now] is to double down and try to revive that network” with some modification, Azizi said.

The focus, he said, has shifted to working with smaller groups in Iraq, find new ways to transfer weapons to Hezbollah and rely more on the Houthis in Yemen. It is too soon, and information is too limited, to assess whether the protests and the threat of a US strike have changed that calculus, but official channels indicate that there have been no modifications.