By Parisa Hafezi
DUBAI, Jan 12 (Reuters) – Iran’s bazaar merchants, the merchant class that was the financial backbone of the 1979 Islamic Revolution, have turned against the clerics who helped bring them to power, raising concerns about an economy that has turned into anti-government protests.
Frustration among bazaar traders, from small-scale shopkeepers to large wholesale traders, grew as their political and economic influence in Iran declined over the decades while the elite Revolutionary Guards found their grip on the economy, building widespread and tightly held networks of power.
“We are struggling. We cannot import goods because of US sanctions and because only the Guardians or those linked to them control the economy. They only think about their own benefits,” said a merchant in Tehran’s Grand Bazaar, speaking on condition of anonymity.
The wave of protests that swept the country, and that created one of the toughest challenges ever for the clerical leadership, broke out towards the end of December in the Grand Bazaar of Tehran, where hundreds of traders denounced the sharp decline in the rial currency.
The demonstrations soon swelled and became political, challenging the legitimacy of the Islamic Republic. Protesters burned effigies of Supreme Leader Ayatollah Ali Khamenei and chanted “Death to the dictator” – undeterred by security forces armed with tear gas, batons, and, in many cases, live ammunition.
Iran’s rulers, while acknowledging the economic difficulties, blamed their long-time enemies the United States and Israel for fomenting the unrest. They seem intent on holding on to power at any cost, backed by a security apparatus honed over decades of suppressing ethnic insurgencies, student movements, and protests over economic hardship and social freedoms.
A combination of international sanctions and the Guards’ sprawling economic empire limited the government’s ability to alleviate the dire economic situation.
Tehran-based analyst Saeed Laylaz said the government has lost control of the situation.
“What is disturbing is that the trouble started in the bazaar. For merchants, the main issue is not inflation – it is the volatility of prices, which leaves them unable to decide whether to buy or sell,” he said.
Economic disparities between ordinary Iranians and the clerical and security elite, along with economic mismanagement and state corruption – reported even by state media – have fueled discontent at a time when inflation is pushing the price of many goods beyond many people’s means.
Iran’s rial currency has lost almost half its value against the dollar in 2025, with official inflation reaching 42.5% in December.
CONTROL OF THE SECTOR FROM OIL TO CONSTRUCTION
Created by the late founder of the Islamic Republic Ayatollah Ruhollah Khomeini, the Guardians first secured an economic foothold after the Iran-Iraq war in the 1980s, when clerical rulers allowed them to invest in key Iranian industries.
Their influence has expanded exponentially over the decades, and they have benefited from Khamenei’s full support and from opportunities created by Western sanctions, which have effectively excluded Iran from the global financial and trading system.
The Guardians now control vast sectors of the economy, from oil to transport, communications and construction.
Another businessman said that the crisis is not over, since the Guardians have been showing that they are able to defend their economic interests.
“The government wants to solve the problem, but it does not have the means and the power in this system. The economy is not controlled by the government,” said the businessman, a 62-year-old carpet seller in Tehran.
All aspects of the country’s sanctions-hit oil business have come under the growing influence of the Guardians – from the shadow fleet of tankers that secretly ship sanctioned crude, to logistics and front companies that sell oil, mostly to China.
“No one knows how much of the oil money that the Guards get from selling Iran’s oil goes back to the country … they are too powerful to be questioned about,” said a senior Iranian official, who asked not to be named.
During his 2013–2021 presidency, the pragmatist Hassan Rouhani repeatedly clashed with the Guards, publicly accusing them of resisting budget cuts, while his attempts to curb their business networks and assets were largely frustrated.
THE ESTABLISHMENT HAPPENS ON THE GUARD TO COMPLETE THE SPREAD
Even as it relinquished economic power, the clerical establishment relied on its loyal forces – the Guards and its affiliated Basij paramilitaries – to violently crush ethnic uprisings, student unrest, and protests about economic hardship, and preserve political order.
“Because of the sensitive circumstances when the country faces foreign threats, Khamenei cannot upset the Guardians by suppressing their economic influence. The establishment needs them to suppress protests and confront foreign threats,” said an insider, close to Rouhani.
US-based rights group HRANA said it had verified the deaths of 544 people – 496 protesters and 48 security personnel – with 10,681 people arrested since protests began on December 28 and spread across the country. Reuters could not independently verify the concessions.
Authorities did not give a casualty count, but officials said many members of the security forces were killed by “terrorists and insurgents” linked to foreign enemies, including the US and Israel.
(Writing by Parisa Hafezi; Editing by Frances Kerry)