No, Iran’s Islamic Republic is not on its last legs

There are few things as heartening in global affairs as seeing a foe suddenly beset by internal problems. So the protests across Iran in the past week made for big, daily headlines.

For Americans, the protests are a sign that Iranians are fed up with an overbearing and corrupt theocracy. For Iran’s Sunni Muslim competitors in the Middle East, primarily Saudi Arabia, it will be seen as a comeuppance for Tehran’s efforts to expand its influence in Iraq, Syria, Lebanon and Yemen.

There is some truth in both views. But the meaning of this unrest can be easily obscured by wishful thinking and rhetorical nonsense. The protests do amount to a warning that Iran’s politics are not working for many people. But that does not mean they constitute an immediate threat to the system. There is a kernel of democracy and responsive government embedded under layers of repression in Iran, so the most likely result is some modest policy corrections.

It’s plausible, as Supreme Leader Ali Khamenei has suggested, that the United States, Saudi Arabia, Israel and others had a hand in encouraging the protests. What serious intelligence operation wouldn’t at least try? But it’s hard to imagine anyone except the most extreme ideologue really believing that the hidden hand of the CIA or Mossad was behind it all.

What seems clear is that the protests grew out of frustration with a long-running battle between elements of the political establishment. What should worry Iranian leaders is that, instead of choosing sides, many of the protesters declared a pox on both their houses.

Iranians have been struggling economically for a long time – partly because of international sanctions, and partly because of the leadership’s priorities and poor management. Inflation, unemployment and other problems were supposed to start easing after Iran struck a deal with the Obama administration to rein in its nuclear program. In some ways, they have. But not a lot. And unfulfilled expectations are a dangerous thing.

A political maneuver by the moderate president, Hassan Rouhani, provided a lot of fuel for the protests. In submitting his budget proposal in December, Rouhani made cuts in a number of programs. However, he also publicized for the first time exactly how much money goes to myriad religious institutions that provide the foundation for the theocracy but are a dead weight for the economy.

At the same time, a second pillar of hard-line support also has come under greater scrutiny. Rouhani has been pressuring the Revolutionary Guards to divest parts of a huge and largely hidden business operation that serves largely to enrich the guard itself and some of its senior officials.

In addition, the Guards are on the front line of Iran’s efforts in Syria and Lebanon. Dennis Ross, a veteran U.S. diplomat and policymaker, says that it is costing Iran several billion dollars a year to prop up Syrian President Bashar Assad. He also cites estimates that Tehran is spending $800 million annually on its Lebanese ally, Hezbollah.

So, to start out, this had the feel of another squabble among politicians. But then, someone got the bright idea to bring the people into it. And something remarkable happened. By most accounts, hard-liners were trying to use the economy to make Rouhani look bad. Instead, most of the ire appeared to be directed at the hard-liners themselves, at the entire political system, and even at the supreme leader.

Protesters made clear they weren’t keen on propping up Assad and Hezbollah, supporting Shiite militias in Iraq and rebels in Yemen who are fighting the Saudis.

The protests seem to be dying down. The Islamic Republic is not on its last legs. But long-term the implications may be more serious than they were from the last round of big protests in 2009. Those were largely confined to an urban elite in the capital, angry about what they regarded as the theft of an election by the hard-liners. This time, the capital was relatively quiet. Instead, the action was in cities across the country that traditionally support the political status quo. One recurring message was that the entire system is rotten.

The big questions for Iranian officials are: How big is their problem in the provinces? And what do you do about it?

Repression works, but not as the only tool. There also is that seed of democracy, a parliament and the give-and-take of politics operating in a very constrained framework. Here again, Ross – who helped craft the Obama administration’s response to the 2009 protests — is instructive.

When given a chance to express an opinion, he says, Iranians typically support more moderate policies. Rouhani is very likely president, he says, because Khamenei realized five years ago that he needed to tack toward the center. In other words, Khamenei responded – in a fashion — to the public mood.

If that’s true, look for him to tweak some policies. Maybe find more money for domestic needs. Not be quite so obvious about supporting Assad and Hezbollah. Perhaps even find a few hard-line scapegoats? But nothing more dramatic. Not now.