It is too early to judge whether Iran’s president can contain the anger on the streets. The protest movement that erupted days ago in Tehran’s Grand Bazaar — triggered by the collapse of the Iranian currency — quickly spread to universities, some state-run industrial facilities, and other cities.
Still in its early stages, the movement’s durability, reach, and level of popular participation remain unclear. What is evident, however, is that it has unsettled both poles of power in Iran, the Supreme Leader and the president, and exposed a growing divide between the regime and the state over how to manage domestic and foreign challenges.
While the Supreme Leader and the forces of the regime and the “revolution” are focused on rebuilding military capabilities and preparing for what they view as a near-inevitable confrontation with Israel, President Masoud Pezeshkian and his cabinet are preoccupied with desperate efforts to keep the domestic situation from unraveling, chiefly the economy. Yet the economy is the key to achieving two objectives that are nearly impossible under Iran’s current conditions, where priority is given to strengthening military and security capabilities.
The first objective is economic recovery and stabilizing the national currency. This effort faces two major obstacles: an external one stemming from sanctions, and another — according to Pezeshkian himself — caused by the greed of those profiting from the black-market exchange rate, whom he blames as a major factor behind the currency’s historic decline.
The second objective is sustaining dialogue between citizens and the government, which has so far rejected security solutions or at least succeeded in postponing them temporarily. Pezeshkian, who instructed his interior minister to listen to protesters’ demands, is fully aware that meeting those demands is largely beyond his authority. The real decision-makers have entirely different priorities. As a result, his government faces the prospect of failed dialogue: it cannot pressure the regime’s hardline forces to make meaningful concessions, nor can it meet even minimal demands given the accumulated deterioration inherited from previous administrations, particularly that of the late President Ebrahim Raisi.
The widening crisis of trust among Iran’s ruling factions is increasingly evident. Forces aligned with the Supreme Leader are watching closely and suspiciously the state and government represented by Pezeshkian, who has failed to win over conservative rivals and relies on only limited backing from the top. More critically, much of the Iranian public has lost confidence in both camps, as well as in their legitimacy and political projects.
In effect, the timing and context of this unrest reinforce the perception that the post–Israeli attack rhetoric of social, national, and civic reconciliation has failed. No internal concessions were offered; the same discourse was reused, merely in a different tone.
The government now faces a serious test of credibility: its ability to defend citizens and stand firm against hardliners. Pezeshkian and his team are racing against time to define their options. They cannot serve as a shield for hardliners against public anger, nor can they ignore popular demands.
At a public meeting in the city of Shahrekord on Thursday, January 1, Pezeshkian said: “We are sitting on treasures, yet people are struggling to make ends meet. Who is responsible? We are responsible — and you are responsible.”
He was clearly pointing the finger at a specific party, one that the Iranian public broadly agrees bears responsibility for the country’s current predicament and now faces mounting security, political, and economic challenges that risk a sweeping internal rupture.
Accordingly, a movement that began with economic grievances took on a political character from its very first day and is shaping up to be the most serious challenge the system has faced since its establishment in 1979.
