Rouhani defiant despite growing anger in Iran

President Hassan Rouhani struck a defiant tone as millions of Iranians gathered in cities across the country to celebrate the 40th anniversary of the Islamic revolution despite growing public angst over the country's direction.

Mr Rouhani said Iran would continue to build missiles and seek to influence regional affairs – policies that have riled US president Donald Trump – as the country's leaders organised a show of support for their theocratic rule on the streets.

Forty years to the day after revolutionaries claimed victory having overthrown the US-backed Shah, crowds packed into central Tehran holding portraits of Ayatollah Ruhollah Khomeini, the charismatic cleric who led the 1979 uprising.

But the celebrations could not mask a sense of crisis gripping the country. Even some of those who took to the streets expressed discontent over economic issues, blaming Mr Rouhani and other pragmatic politicians for trusting western powers.

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Mr Trump’s decision last year to withdraw from Iran’s landmark 2015 nuclear deal has pushed the economy towards recession and driven a spike in food costs.

The crowds in Revolution Street and Freedom Square chanted “Death to America” and Mr Rouhani said “Americans and Zionists . . . should know that no plan could be implemented in the region without Iran”.

But Mr Rouhani has not been able to escape public ire himself. “If Rouhani had not followed the US, we would not have faced this economic disaster,” said Zahra, a 35-year-old employee in a private company, who wore a top-to-toe black hijab. “We should respond to US threats very strongly.”

Iranians’ disillusionment with their leaders has reached new highs while support for Mr Rouhani among pro-reform Iranians is at its lowest level in several years.

For Mr Rouhani, sealing the nuclear deal with six world powers was the main achievement of his presidency. During his first term, inflation plummeted from more than 30 per cent to less than 10 per cent, but it is now skyrocketing to its old levels. After a spurt of growth following the accord’s implementation, economic growth slowed sharply.

Many western companies have pulled out or suspended their operations in the country. Oil exports – the lifeline of the economy – have plummeted by more than one million barrels a day and Iranians’ hopes of prosperity have been dashed. As it seeks to manage its dwindling revenues, the government has been forced to scale back “RouhaniCare”, a health programme that was the president’s flagship domestic policy.

The rally’s organisers played pop songs and revolutionary music while laying on games and entertainment shows for children. Reform-minded Iranians took to the streets to show their support for Iran, as opposed to the ruling class, but the crowd was dominated by core supporters of the regime, who back anti-US and anti-Israel policies.

Mr Rouhani’s hardline rivals – whose supporters thronged into Freedom Square – have sought to capitalise on the crisis to consolidate their power as competing regime factions look ahead to the next parliamentary and presidential elections.

Politicians also have an eye on the eventual succession to Ayatollah Ali Khamenei, the 79-year-old supreme leader.

With the nuclear accord hanging by a thread, hardliners feel vindicated having argued that Mr Rouhani was duped by the West into accepting poor terms for the deal.

"The government should never have trusted the US and Europe. We said these negotiations wouldn't bear fruit," said Hossein Shariatmadari, editor of Kayhan, a state-run newspaper that is viewed as the hardliners' mouthpiece.

“We are struggling with economic problems and some are caused by sanctions. But many of them could be tackled with better management.”

A fresh battle between reformers and hardliners is now brewing over European efforts to help Iran counter the US sanctions. Last month France, Germany and the UK launched a special trade mechanism known as Instex that is intended to keep open some lines of trade between European companies and Iran. Its initial focus will be limited to essential goods, such as medicine and food, and many Iranians doubt its effectiveness.

Still, Muhammad Javad Zarif, Iran’s foreign minister, said Instex was a “long overdue” first step as the government banks on the nuclear deal’s three European signatories to help cushion US pressure.

But hardliners have scoffed at the initiative and expressed concern that its implementation will push the government towards complying with international regulations against money laundering and terrorism financing.

“The Islamic republic will not accept humiliating conditions from Europeans under the pretext of one small stream like Instex,” Sadegh Larijani, the head of the judiciary, one of the centres of hardline power, told Iranian media.

Shariatmadari said the worry was that the West wanted to use the anti-terrorism rules to target funding for the elite Revolutionary Guards and Tehran’s financial support for regional groups, including Hizbullah, the Lebanese militant movement, and Yemen’s Houthi rebels.

“This means surrendering with our hands tied and handing over the country to Isis,” he said.

Ali Shakouri-Rad, a reformist politician, said Mr Rouhani’s opponents hoped the failures of the nuclear accord “will mean he cannot finish his term”. But he added that the president retained the support of the republic’s most powerful figure – Mr Khamenei.

“Rouhani and reformers have been undermined, but that does not mean hardliners have been strengthened,” said Mr Shakouri-Rad. “A large segment of the population has been disappointed, but there’s no alternative [to reformers].”

However, others in the reform camp are more bleak. Abdollah Momeni, an activist, said the president’s “strong point” – the nuclear accord – had become his “weak point”.

“People voted for Rouhani to avoid what we see today. They have reached the point they dislike reformers more than hardliners because they think it’s 20 years that they’ve been saying they will do reforms,” he added. “You can see the hopelessness.” – Copyright The Financial Times Limited 2019