# Iran's Economic Collapse and Bazaar Protests

**Podcast:** The Indicator from Planet Money
**Published:** 2026-02-17

## Transcript

NPR.
As we speak, U.S.
Navy troops are in a state of waiting.
They're telling their husbands, wives, and children that they're going to be away from home for more months.
That's because last week, news broke that the U.S.
government told a second aircraft carrier group to go to the Middle East.
President Trump is imploring Iran to make a deal on its nuclear weapons and missiles programs.
Iran's leadership is in a vulnerable position.
This comes off the back of massive countrywide protests that swept the nation around New Year's.
They've mostly been quelled for now because of a bloody crackdown by the Iranian government.
So far, activists say that at least 7,000 protesters were killed.
There are many reasons for those huge protests: censorship, religious discrimination, corruption.
But the initial seat of these protests was economic.
It started with shopkeepers frustrated with inflation and a currency collapse.
This is the indicator from Planet Money.
I'm Waylon Wong.
And I'm Darian Woods.
Today on the show, the economic roots of Iran's protests.
We speak with a small business owner in Tehran, and we learn why Iran is in such an economic mess.
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If you were dropped down from the sky onto central Tehran, you might find yourself at the Grand Bazaar.
The Grand Bazaar is a gigantic marketplace of interlocking corridors, is where wholesalers and retailers sell shoes and fabrics and cleaning supplies.
And just outside the Grand Bazaar, you might find a workshop owned by Ali and his family.
My parents, my grandparents.
As much as I know about my background, they were all from Bazaar.
Ali asks MPR not to use his full name because he fears retribution from the Iranian government.
And we were actually lucky to be able to speak with him.
He might have cut out.
Because Iran's internet has been restricted off and on since early January.
Hello again.
Thank you for your patience.
No problem.
Ali's family business makes interior decorations that shop owners in the bazaar sell.
Ali says business has been bad recently.
He traces this back to the 12-day war between Iran, Israel, and the US last summer.
He told us what his business managers have been telling him.
They could use, but but it's very difficult for them to sell.
They are only producing, not selling.
Inflation in Iran is running at around 50%, 5-0.
That means by the time the bazaaris, the shopkeepers buy their products and then go to sell them, having to mark up their prices a lot, and then the customers are refusing to pay such high prices.
Shop closures, sit-ins, and rallies have a historical significance.
This is the same sort of repertoire of actions that uh merchants and bazaaris have used for well over a hundred years, whether it was the constitutional revolution at the beginning of the 20th century or the oil nationalization movement in the 1950s or the 1979 revolution.
In fact, bazaaris were a driving force of the 1979 revolution.
They helped fund demonstrations that led to Iran establishing a theocratic democratic hybrid government, one that's suspicious of Western influence.
The humble shopkeeper has a huge amount of political power in Iran.
As a general rule, the Bazaris, since 1979, are viewed as a strong pillar of the regime.
They're generally socially conservative.
And one way to see that is that when these protests started on December 28th, the government was actually quite conciliatory.
It acknowledged the legitimacy of the concerns of these shopkeepers and merchants and so forth, and it tried to actually negotiate and sit down with them.
But it was too little too late.
The protests were spreading to bazaars all around the country.
So part of the reason that protests in the Bazaar could actually spread and take on national scope is that if there is a kind of a disruption in the Bazaar, that information that news quickly spreads to shopkeepers and other uh uh brokers and intermediaries very quickly.
And that's what happened within the first couple of uh of days in in December.
We saw protests all across the country in other commercial centers and bazaars and other cities and even small towns.
Soon the discontent was about more than just the exchange rate or inflation.
Water supply has been a big issue, for example.
Fashid Vahedafad is a professor of civil and environmental engineering at Tufts University.
Over the past uh, I would say past few years, past five, six years, the whole country has been struggling with a severe drought.
This has meant power cuts from dry hydropower dams and even water restrictions in cities like Tehran.
Farsad says the water problem has its roots decades ago, when the new Islamic Republic of Iran got a bit carried away building too many dams.
Building new dams kind of becoming a kind of sign of independence and sign of development.
In fact, Fashid used to design these dams in Iran himself until he moved to the US in 2007.
He says they were as big as the Hoover Dam.
These dams would extract more and more water from natural sources so that Iran could grow more of its own crops.
And after several decades, worsened by climate change, access to water started to become a real problem in Iran.
Water was just one other pent-up issue.
NYU professor Aran Kashvarziyan says university students were concerned about civil rights.
By the third day, it included universities and university students in Tehran, as well as other major cities, Esfahan and Yazd.
After enormous demonstrations around the country, there was talk that this could be some sort of new revolution.
That's when the government started shooting protesters in the street.
The truly brutal crackdown uh of January um obviously has hit Iranians very, very hard.
This has kind of reached a uh scale that I think most Iranians did not expect.
In early January, President Trump said he would come to the protesters' rescue, but that hasn't happened.
The White House's main focus in negotiations with Iran is still preventing it from acquiring a nuclear bomb.
That's one of the big reasons why President Trump put extra sanctions on Iran last year, limiting its oil sales.
This is a major cause of this economic crisis.
That said, as much as lifting sanctions would help Iran's economy, the problems go deeper than that.
The Iranian economy has been basically for the past 10 years, uh 15 years been in recession.
This is a combination and then kind of a vicious cycle, combining sanctions as well as mismanagement of the economy, which has generated lots of negative outcomes.
Most importantly, from my perspective, a lot of corruption and development of oligarchs and monopolists and so forth.
And connected to that is a lot of inequality, right?
So this is in the background.
That's because the inflation and currency collapse last year was just the spark.
The country had long been sitting on bone dry tinder.
Right now in Tehran, Ali says people aren't buying much of anything at the bazaar, with one exception.
The only market which is still uh working in a normal way is the uh food industry.
People still have to eat.
Yes.
They think that if I can't buy a new ethnic care, uh why shouldn't I uh expand it for a good restaurant?
Maybe I wouldn't do that, but everyone do that from TED.
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