Rising Regional Tensions Frighten Iranians And Disrupt Markets
Escalating regional tensions and Tehran's missile attacks on neighboring countries have instilled fear of war among Iranians and rattled the financial markets.
Escalating regional tensions and Tehran's missile attacks on neighboring countries have instilled fear of war among Iranians and rattled the financial markets.
Iranian missile attacks on the Kurdish region of Iraq, along with similar strikes on targets in Syria and Pakistan, have heightened concerns among Iranians that a war may erupt involving Iran at any moment.
While some Iranian pundits have suggested the possibility of a war between Iran and the United States within the next two years, other observers argue that such a scenario is unlikely unless there are exceptional circumstances. Meanwhile, the US Secretary of State Antony Blinken, has labeled Iran as the most significant regional security threat, coupled with Iranian proxy groups' daily attacks on commercial shipping in the Red Sea and Iran launching missile strikes on three countries in less than a day.
The Iranian currency, rial, has fell to its eight-month low against the US dollar this week, trading at 540,000 per dollar.
Pro-reform daily Setareh Sobh [Morning Star] on Wednesday directly linked the turmoil in the rising dollar exchange rate and the price of gold in Tehran to the prevailing geopolitical tensions.
According to the daily, diplomacy could be the only way to control the markets in Iran. However, with a war raging on in the region, and Iran playing a major part in the conflict, leaves little chance for diplomacy. In the meantime, the Iranian government has proven during the past three years that it is absolutely incapable of influencing the markets.
Meanwhile, Iranian economist Hossein Raghfar told Fararu website that the most vulnerable segments of the Iranian society are suffering more under the pressure of rising inflation. Prices of foodstuff have been rising exponentially during the past months.
The government's spokesman has acknowledged that the surge in prices is a direct result of military developments in the region. He pointed out that the US and its allies' airstrikes on the Houthis in Yemen have generated a feeling of insecurity in Iran, contributing to an overall atmosphere of instability. Nevertheless, Iranian Minister of Economy Ehsan Khandouzi asserted that the government is making every effort to manage the "price fluctuations."
Mohammad Kashtiarai, the Chairman of the Iranian Goldsmiths Trade Union has also told Khabar Online that the rising price of gold in Iran is the outcome of political developments in the region.
This sense of instability comes after years of a longer trend of uncertainty for Iranians, who no longer see a decent future for themselves and their children.
The sense of instability and insecurity is also reflected in a report by the presidential Office's Strategic Studies Center that painted an alarming picture of hopelessness among Iranians that leads to a flood of emigration. Former government spokesman Ali Rabiei has agreed with the report, highlighting that the main reason for the emigration of educated and skilled Iranians is the government's poor performance that has left no hope regarding the future of the country.
Rabiei wrote: "The report indicates that the underlying factors driving migration from Iran are not primarily economic or related to issues such as unemployment. The central issue is the lack of a clear vision for the country's future provided by the government." He further commented, "Today, immigration differs from the past. For example, when an Iranian chooses to move to Germany, it's not for political aspirations or business prospects. They are leaving solely because they no longer wish to reside in Iran. This is profoundly concerning."
Rabiei also warned that "Iran is the world's number one country in terms of wasting its human resources. He pointed out that the inclination to migrate among educated Iranians has risen from 23 percent in 2014 to 46 percent in 2021."
The Iraqi state news agency announced that the meeting will focus on Iran's Revolutionary Guards Monday missile strike on Erbil in Iraqi Kurdistan. The date of the session is not announced yet. The country has also lodged a complaint at the United Nations Security Council and recalled its ambassador from Tehran.
Also on Wednesday, a Pakistani foreign ministry spokeswoman said the country has recalled its ambassador over the Islamic Republic’s violation of its airspace, calling it a 'blatant breach' of its sovereignty. Pakistan will not allow Iran's ambassador, who was visiting his home country, to return, the ministry said in a statement. Latest reports Wednesday evening local time spoke of Pakistan closing its border with Iran.
In less than one day, the IRGC launched missile and drone strikes on three neighboring countries, claiming ‘revenge’ for civilians and troops killed in the past few weeks. Having hit several locations in Syria and Iraqi Kurdistan Monday, IRGC missiles and drones targeted Pakistan Tuesday, in an operation that Iran said was against two bases of the Sunni militant group Jaish al-Adl. Provincial officials in Pakistan said two children were killed and several others injured by missile strikes near the Iran border, while another toddler was killed in the IRGC’s strikes in Erbil.
Iran's Foreign Minister Amir-Abdollahian said Tehran hit militants in "missile and drone" strikes, claiming that no Pakistani national was targeted. Only "terrorists" were hit, the Iranian diplomat said at Davos, Switzerland, where he was participating in the World Economic Forum, alleging that those targeted were linked to Israel.
According to the Pakistan foreign ministry spokeswoman, Mumtaz Zahra Baloch, the violation was "unprovoked and unacceptable," adding that the country reserved "the right to respond to this illegal act."
Iran and Pakistan have rocky but functioning ties. Clashes in border areas occur from time to time, mainly involving groups such as Jaish al-Adl, which has claimed responsibility for attacks on, and the killing of, several Iranian border patrols.
On Tuesday, hours before the airstrikes, Iran and Pakistan had a joint military exercise in the Persian Gulf, according to Iran’s official news agency IRNA, and Iran’s foreign minister met Pakistan’s caretaker prime minister on the sidelines of the World Economic Forum in Davos.
Officials in Pakistan's southwestern province of Baluchistan, which borders Iran, said that four missiles had hit the Panjgur district close to the Iranian border. "Four missiles were fired in the village of Koh-i-Sabaz which is around 50 km inside Pakistan soil," a senior official of the Panjgur administration told Reuters. "A mosque and three houses were damaged in the attack," another official said.
Iran’s muscle-flexing – using ballistic missiles on targets, some of which were well over 1,200 km away -- comes amid US and UK airstrikes on Iran-backed Houthis in Yemen, who, nonetheless, continue to target vessels in the Red Sea as a show of support for Palestinians in Gaza.
While the attacks on Syria and Pakistan do not seem directly related to Israel, with Tehran claiming the strikes were targeting anti-Iran terror groups, they signal bolder direct action from Iran, which funds and supplies forces opposing Israel like Hezbollah in Lebanon, Hamas in Gaza and the Houthis in Yemen.
Claiming that the Houthis "are not receiving any orders or instructions from Tehran," Amir-Abdollahian said in Davos that attacks against Israel and its interests by the "Axis of Resistance" will stop if the Gaza war ends. ‘Axis of Resistance’ is a term the Islamic Republic uses for its network of proxy militia across the region.
The Biden administration is set to re-designate the Houthis as a terrorist organization in light of the terror the group is waging on global trade and targets, three years after it lifted the designation upon assuming office.