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Jakarta, CNBC Indonesia – The wave of demonstrations that have hit Iran in recent weeks has become one of the most serious challenges to the regime since the 1979 Islamic Revolution. The protests, which were initially triggered by price spikes and an economic crisis, have now developed into a national movement that questions the legitimacy of a government that has been in power for almost half a century.
Demonstrations first broke out at the end of last year, following soaring prices of basic necessities and a plunge in the value of the rial currency. In a short time, protests that initially focused on economic issues turned into broader anti-government demonstrations, with political demands and direct calls targeting Supreme Leader Ayatollah Ali Khamenei.
According to a number of monitoring group reports, the death toll has reached around 2,600 people. The situation is increasingly tense with threats of military action from the United States, warnings of retaliation from Iran if attacked, cutting off internet and telephone access, as well as solidarity actions in various countries around the world.
At the same time, tens of thousands of government supporters also took to the streets in counter-demonstrations to demonstrate the regime’s strength amid public pressure.
“What we are witnessing is extraordinary. Despite facing bullets, arrests and a total internet blackout, ordinary Iranians are still risking everything for freedom,” Iranian-Canadian writer and activist Parmida Barez told CBC News Networkquoted Thursday (15/1/2026).
Senior director of the Washington-based New Lines Institute for Strategy and Policy, Kamran Bokhari, believes that this time the protests have a different character compared to previous waves. “These protests are different from anything we have seen in years, primarily because they are driven by economic hardship,” he said.
As for the latest developments, the President of the United States, Donald Trump, admitted that he had received news that there had been no more “murder” of demonstrators and that the execution plan had been cancelled.
Earlier, Iran’s judiciary chief on Wednesday promised to hold speedy trials for those arrested, and prosecutors said some detainees would
Initial Trigger of Demonstration
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The initial trigger for the demonstration was rampant inflation and the continued decline in the value of the rial currency, which is now “almost” worthless.
On December 28, traders closed their shops after the currency exchange rate collapsed, almost paralyzing business activities. The fall of the rial currency, which is now trading at above 1.4 million rials per US dollar, has made it impossible for traders to run their businesses.
The high rate of price increases not only erodes people’s purchasing power, but also strengthens expectations of further inflation in the country. SCI reported point-to-point inflation reached 52.6% at the end of December, an increase of 3.2% compared to the previous month.
Meanwhile, average annual inflation also continued to rise and was recorded at 42.2%. This high inflation rate reflects broad and persistent price pressures, while also narrowing the government’s policy space in stabilizing the economy.
Iran’s economic growth is also showing signs of slowing. Iran’s economy recorded annual growth of 1.6% (year-on-year/yoy) in the fourth quarter of 2024, slowing down from 3.1% in the previous period.
This slowdown indicates that the momentum for economic recovery is starting to lose steam amid increasing domestic pressures, ranging from high inflation to economic uncertainty.
Meanwhile, Iran’s unemployment rate fell to 7.20% in the fourth quarter of 2024, from 7.50% in the third quarter of 2024, becoming the lowest level in recent decades. However, this decline in the headline figure does not fully reflect the actual conditions of the labor market.
If we look deeper in 2025, unemployment will actually increase in almost all demographic groups. Male unemployment rose from 5.9% to 6.5%, while female unemployment rose from 13.7% to 14.2%. The increase also occurred in urban and rural areas.
Amid this, the official measurement methodology has drawn criticism for considering the existence of income as proof of work, without taking into account the quality of work. More than 40% of the unemployed are college graduates, indicating the lack of quality job creation amidst high inflation and heavy cost of living pressures.
Economic pressures were exacerbated by the impact of Iran’s 12-day war with Israel last June, which also involved the United States attacking three of Iran’s nuclear facilities.
Apart from that, international sanctions that have been re-imposed by the United Nations since September regarding Iran’s nuclear program have also put pressure on the economy of the Country of the Mullahs.
Bank Bankruptcy
Quoting The Wall Street Journalat the end of last year, Bank Ayandeh, which was burdened with losses of almost US$ 5 billion (Rp. 83.5 trillion) due to a pile of bad loans, was finally officially declared bankrupt.
The Iranian government moved quickly to merge and merge the bankrupt bank into a state bank and printed large amounts of money to try to offset the losses experienced by the troubled financial institution. That masks the problem, but it doesn’t solve it at all.
On the contrary, this failure became a symbol and trigger for the economic collapse which ultimately sparked protests which are now the most significant threat to the regime since the founding of the Islamic Republic half a century ago.
The collapse of the bank made it clear that Iran’s financial system, strained by years of sanctions, bad loans and a reliance on printed money that fuels inflation, has left the Iranian economy increasingly unable to pay its debts and lacking liquidity. Five other banks are estimated to also experience the same serious conditions.
Ayandeh Bank was founded in 2013 by Ali Ansari, an Iranian businessman who merged two state-owned banks with other private banks he had previously founded to form a new bank. He comes from one of Iran’s richest families and owns a multi-million dollar mansion in north London.
Politically, he is seen as close to former conservative President Mahmoud Ahmadinejad.
Britain imposed sanctions on Ansari last year, just days after Ayandeh’s collapse, calling him a “corrupt Iranian banker and businessman” who helped finance Iran’s vast elite paramilitary and business organization, the Islamic Revolutionary Guard Corps.
In a statement in October, Ansari blamed the bank’s failure on “decisions and policies made outside the bank’s control.”
Ayandeh offers the highest interest rates among Iranian banks, attracting millions of depositors and borrowing heavily from the central bank. Economists say central banks print money to keep banks liquid and afloat.
Like other troubled Iranian banks, Ayandeh had a large number of non-performing loans, one of various factors that ultimately led to its failure.
US Intervention
Trump has repeatedly promised “very strong action” if Iran executes protesters. He called on the Iranian people to continue demonstrating and taking over state institutions, while insisting that “help is on the way.”
Based on a report by the human rights group HRANA, this riot claimed the lives of at least 2,403 protesters and 147 government officials. This figure far exceeds the waves of protests in 2022 and 2009.
The Iranian government itself says more than 2,000 people were killed and accused “foreign enemies” of being behind the mass destruction.
Despite the massive scale of the unrest, Western officials assess that Iran’s security forces are still in full control and the government is not on the verge of collapse.
The US reportedly began withdrawing some of its military personnel from a number of bases in the area on Wednesday. This step was taken after Iran made strong threats to attack US bases if Washington decided to intervene militarily.
A US official who asked not to be named confirmed that the withdrawal of personnel from key bases was a precautionary measure in light of mounting tensions. Qatar even stated that the reduction in personnel at Al Udeid air base, the largest US base in the region, was a direct response to current regional tensions.
Two European officials assess that US military intervention is very likely, even within the next 24 hours. Likewise, Israeli officials also believe that Trump has made the decision to intervene, although the scope and timing are still kept secret.
A senior Iranian official stated that his party had given a strong warning to neighboring countries such as Saudi Arabia, the United Arab Emirates (UAE), and Türkiye.
“Tehran has informed regional countries that US bases in those countries will be attacked if the US targets Iran,” the official said.
In addition to the physical threats, diplomatic contacts between Iranian Foreign Minister Abbas Araqchi and US Special Envoy Steve Witkoff have reportedly been completely suspended.
Responsible Iran
Meanwhile, the Iranian side emphasized that from the start the action was general, peaceful and oriented towards trade union demands. The protesters, it was stated, were trying to convey their aspirations calmly without disturbing public order.
“The Islamic Republic of Iran adheres to the law and practice of the right to freedom of expression and peaceful demonstration,” said a statement from the Iranian Embassy in Jakarta received by CNBC Indonesia.
These rights, according to the statement, are recognized within the framework of Iran’s constitution as well as international commitments, including the International Covenant on Civil and Political Rights (ICCPR).
It was also stated that all relevant authorities and institutions had paid attention to the peaceful and legitimate demands of citizens and used existing capacities to follow up on these aspirations. In that context, the Iranian Embassy emphasized that “no action was taken against the peaceful protesters”.
However, Iran stressed the need to make a clear distinction between legitimate peaceful protests and organized acts of violence that disrupt public order. Based on the documentation available, in a number of cases peaceful demonstrations are said to have been deliberately misused by “a small number of violent elements” affiliated with movements that were “driven from outside”.
These actions, according to the Iranian Embassy, included destruction of public property, attacks on law enforcement agencies, and the use of incendiary devices and firearms. Iran insists that these actions are not related to legitimate economic demands and fall outside the protection of peaceful protests under international human rights law.
In its statement, the Iranian Embassy also expressed “deep and serious concerns” about the role and attitude of several foreign actors, especially the United States and the so-called Zionist regime. The statements and attitudes of officials from both parties are considered to contain provocations of violence, incitement to riots, threats to use force, and legitimization of actions of internal destabilization.
According to Iran, these attitudes constitute a clear violation of the basic principles of international law and the United Nations Charter, especially regarding national sovereignty, non-intervention in the internal affairs of other countries, and the prohibition of the threat or use of force.
The Iranian Embassy specifically highlighted statements by the President and a number of United States officials which it said “explicitly contained threats and provocations to carry out violence within Iran”, as well as the attitude of the Prime Minister of the Zionist regime who was seen as openly supporting the riots. According to Iran, this attitude has in practice led to an increase in terrorist violence and social destabilization.
Iran also said that such support was conveyed by parties who have a “long history of acts of aggression, terrorism and killing of Iranian citizens”, so the claims made cannot cover the true identity of such behavior.
(luc/luc)
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