Iran’s major economic problems have not only plunged the country into a major protest wave, but forced the regime to reassess its strategic priorities. Protestors are taking to the streets to demand the end to the costly funding of Iran’s proxies including Hezbollah in Lebanon. Even within the regime, hardliners are becoming increasingly critical of the proxies.
The protest wave began in December and spread nationwide this month. A regime-imposed Internet shutdown has made it hard for information to leave the country, making independent verification by journalists difficult. Videos showing rows of body bags have circulated on social media. Government forces have violently repressed the protests, arresting thousands and killing more than 5,000 people as of Sunday, according to an Iranian official.
What started as an uprising against increasing inflation quickly turned into a broader anti-government movement — bringing merchants, university students and women together on the streets. “Neither Gaza nor Lebanon, my life for Iran,” some protestors chanted during the demonstrations. They criticize Iran’s strategic priority of funding its proxies abroad — like Hamas and Hezbollah — instead of addressing domestic problems such as soaring food prices.
“We know that Iran has provided approximately a billion dollars over the past year, according to statements from U.S. officials,” Matthew Levitt, director of the counterterrorism and intelligence program at the Washington Institute, told NOW. “And it is possible they will not be able to continue at that level,” given the economic problems and the pressure the regime is currently facing. For Iran, the survival of its Islamic revolution is more important than exporting its ideology abroad, he added. Given the current circumstances, Iran is likely to reduce its level of funding. But “any idea that Iran will stop funding Hezbollah is way too optimistic.”
It is not the first time Hezbollah has been financially restricted by the Iranians. During the Green Movement in 2009, the anti-proxy slogans surged predominantly during anti-government protests. The Iranian regime allegedly brought in Hezbollah forces to suppress the protest — and later briefly weighed in on the protestors’ demands. “Iran reportedly cut back its support for Hezbollah by some 40 per cent”, Levitt said — only to raise their financial support above the previous level a few months later.
Iran between proxies and nuclear weapons
The protests have reignited an older debate inside Iran. Iran has for years built up its so-called “axis of resistance” across the Middle East — fueling billions of dollars abroad. This system was created to serve as a threat to the country’s enemies and defend Iran in case of strikes. “But when Iran was attacked in the 12-day war, its proxies, especially Hezbollah, were almost completely ineffective,” Hans-Jakob Schindler, head of the think tank “Counter Extremism Project”, told NOW.
With inflation and sanctions crippling the regime’s finances, Tehran is forced to reconsider its priorities — and Hezbollah might eventually fall off the table after its failure to act. “There are relatively outspoken hardliners who say that proxies cost too much money and yield few results,” Schindler argues. According to Schindler, these critical voices have the best arguments at their disposal after the 12-day war: “Missiles and drones made an impression, but they did not stop Israel,” Schindler said. “The proxies failed.”
With Iran’s axis increasingly under fire, another option moves into the limelight of attention. For the Iranian hardliners “it is clear that the only reliable guarantee for the regime’s survival is a nuclear weapon,” Schindler believes. A nuclear weapon might give the regime protection from future attacks — one, that its proxies cannot provide.
Developing such a weapon at the same time puts Iran into the spotlight of American interests. Not only have many Western countries imposed sanctions against Iran’s nuclear programme, but the U.S. has bombed several nuclear facilities, like the Fordow Uranium Enrichment Plant, with bunker busters at the end of last year’s 12-day war.
Hezbollah under pressure
The proxies abroad are closely monitoring the situation in Iran. A potential fall of the regime would endanger their lifeline to resources. “If you’re Hezbollah, you are very concerned that your primary patron — the source of the majority of your funds, weapons, and training — is under severe pressure,” Levitt said.
There have been speculations about a potential U.S. attack — even though Arab countries and Israel have warned Trump against doing this. Last week, U.S. President Donald Trump warned Tehran from repressing the demonstrations and assuring the protestors “help is on its way”. He did not clarify what he meant by that but was later briefed about several options to intervene in Iran — including military strikes on civilian sites in Tehran. But “an important source on the other side” told Trump that the regime had decided to refrain from executing protestors — a move that looked like Tehran’s appeasement of the U.S. Nevertheless, the Americans have begun evacuating their military base in Qatar, in what could be interpreted as a prevention from retaliation in case of a U.S. attack.
According to Levitt, Tehran is considering which role Hezbollah might take in the future — whether it engages on a regular basis, or only in times of conflict. With Hezbollah’s failure during the 12-day war, Iran might want to test its proxies’ loyalty during any future attack. Iran’s expectations towards the proxy are clear, he believes: “If there’s another war against Iran, Hezbollah damn well better put some pressure on Israel then.”
But Hezbollah is facing several challenges in Lebanon and internationally. The first phase of its disarmament ended in December, but Israel does not seem satisfied with the results — leading to ongoing strikes against Hezbollah.
“Hezbollah finds itself in the worst political situation it has ever been in,” Schindler says. While the group has blocked the presidency for three years, it had to accept a president and prime minister who are open critics and opponents of the group, Schindler said.
“In this weak phase, it cannot be in Hezbollah’s interest to continue provoking the Americans or Israelis,” Schindler argues. Hezbollah is not the first strategic interest for Iran, but at the same time faces the pressure of meeting their expectations, the expert said.
Laura is a German journalist. She has previously worked in Brussels and Berlin for POLITICO Europe.
The views in this story reflect those of the author alone and do not necessarily reflect the beliefs of NOW
