What Do Iran Protests Mean for President Rouhani?

With protests appearing to die down in Iran, analysts say President Hassan Rouhani faces both challenges and opportunities for his efforts to reform the country.

The leadership closed ranks as the past week's unrest turned violent, blaming foreign enemies and "terrorist" exile groups.

But all sides of the political spectrum accept that deep undercurrents of frustration driven by unemployment, high living costs and perceived corruption have turned Iran into a tinder box.

Rouhani's critics say he has abandoned the poor by seeking to raise fuel prices in his most recent budget, announced just a few weeks before the protests began.

In his budget speech, Rouhani said price rises were necessary to tackle unemployment, but parliament looks likely to reject the most controversial measures as they seek to show they are listening to the anger on the streets.

"The population can no longer support a hike in petrol prices. In the current situation, where people are confronted with such a range of daily, economic problems, such a raise is an error," said Nasser Laregani, vice-president on the economic affairs commission, on Thursday. 

A new online news agency appeared from nowhere this week with a slick video that quickly went viral, showing angry Tehranis criticizing the government's policies.

"Has Rouhani ever bought his own eggs, or meat?" says one man in his forties.

"I'm protesting against the theft, the money grabbing. Who is behind it? Those who live in palaces, those with millionaires in their cabinet," adds an older man. 

Rouhani has argued his liberalizing reforms are necessary to clean up the economy and points to the fall in inflation -- from around 40 to 10 percent -- as a key success of his tenure since 2013. 

He also points to a huge rebound in economic growth -- which the central bank put at 12.3 percent last year -- in the wake of the 2015 nuclear deal that lifted many international sanctions.

But much of this growth has been due to the return of oil sales that do not produce much employment.

This week's protests suggest many Iranians have grown tired of waiting for the results to trickle down, while unemployment remains stuck at more than 12 percent overall, and nearly 30 percent for young people.

"People have had enough, especially the young people. They have nothing to be happy about," Sarita Mohammadi, a 35-year-old teacher in Tehran, told AFP. 

"People cannot afford to buy a house, to continue their education. They can no longer put up with the situation."

- Stoking unrest in Mashhad -

Yet Rouhani could still pull a victory out of this week's tumult, analysts say, especially if it forces conservatives to tame their criticism.

Many of his allies blame conservatives for stoking the unrest with months of attacks on his economic policies. 

Mohammad Sadegh Javadihesar, a reformist analyst in Mashhad where the protests began on December 28, claimed Rouhani's rivals had come to the city in the days before. 

"A number of well-known opponents from the (conservative) Paydari faction came to Mashhad... in order to mobilize people to come out to the streets," he told AFP.

"They highlighted temporary price hikes on commodities such as eggs or how the price of petrol is being increased."

He said they wanted to build up anti-government protests ahead of pre-planned rallies on Saturday, ironically to mark the defeat of the last major protest movement in 2009. 

"This was their aim which got out of hand," he said.

First Vice President Eshaq Jahangiri implied conservatives were behind the initial protests shortly after they began.

"They think by doing this they harm the government," he said, but "it will be others who ride the wave," he told the state broadcaster.

The conservatives have flatly denied the accusations, but the rumors alone could present an opportunity for Rouhani.

"I'm sure Rouhani's government will get a degree of political capital out of this," said Ellie Geranmayeh, Iran analyst for the European Council on Foreign Relations. 

"If the rumors are true and the conservatives started this, then people will see them as inept, and ask how they can possibly manage the country," she said.

Even if he emerges politically unharmed, Rouhani still faces an angry populace and few easy solutions. 

"This crisis has created a new opportunity for changes, which is necessary because otherwise the consequences could be serious," said Abbas Abdi, a Tehran-based analyst close to the reformists. 

"But it's not like Rouhani can wave a magic wand and it will all change."