Inside the Islamic Republic.

What's it been like to live through months of war, economic strangulation, prices are soaring, gas lines are growing, and Iranian leaders are becoming harder lined.

Our man in Tehran takes us inside the country and explains whether the regime is united and thinks it's winning.

Coming up on "Compass Points."

♪ Narrator: Support for "Compass Points" has been provided by the Judy and Peter Blum Kovler Foundation, Camilla and George Smith, the Dorney-Koppel Foundation, the Gruber Family Foundation, and Cap and Margaret Anne Eschenroeder.

The Judy and Peter Blum Kovler Foundation, upholding freedom by strengthening democracies at home and abroad.

Additional support is provided by Friends of the News Hour.

♪ This program was made possible by contributions to your PBS station from viewers like you.

Thank you.

Once again, from the David M. Rubenstein Studio at WETA in Washington, moderator Nick Schifrin.

Hello and welcome to "Compass Points."

Even in war, life goes on, and so it has in Tehran.

The city suffered weeks of an American and Israeli military assault, and now the government acknowledges high inflation.

There's been gas shortages, and Iran's leaders appear determined to silence their critics and counter their economic vulnerabilities by maintaining a chokehold on the Strait of Hormuz.

Throughout this war and for the last 10 years, Reza Sayah has been the News Hour's special correspondent in Tehran.

We are lucky to have him stateside with the help of the Pulitzer Center, and he joins me now.

Reza, thanks so much for being here, and welcome.

Thank you.

Thank you for having me.

The last time I saw you was 17, 18 years ago.

We were both based in Islamabad during the Afghanistan war.

and I'm happy to be here and answer whatever questions you have as best as I can.

Schifrin: Thank you.

Let's do what's going on right now with Iran first.

The U.S.

has embraced an economic pressure campaign.

There's a naval blockade blocking Iran's imports, Iran's oil exports.

The regime in Iran has acknowledged 89% inflation this month, food up more than 125%.

You know, the same wage right now goes a lot less far for the average Iranian.

How does that play out for the people you know and you talk to?

Sayah: It's difficult.

And, you know, obviously, the economic pressure is making it very difficult for people.

From Tehran's point of view, this latest economic pressure campaign is only the latest efforts to destabilize Iran.

For them, it's nothing new.

Sanctions have been going on for decades.

From Tehran's view, the U.S.

tried a military campaign, the naval blockade.

None of it has worked, from Tehran's view, to destabilize them or make them a failed state.

And from their viewpoint, this is the latest American effort to destabilize them, this economic pressure.

It is putting a lot of pressure on people.

If the American intention is to pressure Iranians in order for them to come out and topple the government, I see no signs of that happening.

Despite the economic difficulties, I see supermarkets full.

People are shopping.

Restaurants or cafes are full.

Gas has always been available.

And I think one reason that Iranians are facing and surviving this economic pressure is the culture, is the religious culture.

You have community groups, religious groups supporting one another.

Iran is a welfare state.

There's free education, free universal health care.

People are not in debt over there.

Banks, despite the plummeting of the value of the rial, they give 20 percent interest.

All these help them, the Iranian people to survive.

But make no mistake, it's very difficult for them.

And another thing to add is that there is a faction within Iran that's rarely heard of that benefits from these sanctions, these trustees that are using the black market to sell oil.

And they love these sanctions.

So from the outside, though, you know, we read, "Ok, inflation's that high, right?"

You're right.

There's been no gas shortages.

And gas for most people is still subsidized, it's still cheap.

But people who need more gas are paying more.

That conversation, how often do people talk about that?

How much pressure on a daily basis does the Iranian feel?

"I can't buy this.

I can't afford this."

You know, "I can't get this much petrol."

The conversation happens.

But again, I stress that this is a country that's been in economic, political isolation, now under attack by Israel and the U.S.

So this conversation has gone on for decades.

And you have people continuing this conversation, saying, "Well, this time, you know, "what am I going to do to survive?"

But there's other factions of the population that see this as a war of survival, that they see this is a big moment for them, and they have to face this in order for Iran to survive.

The U.S.

officials I talked to say that, of course, they're trying to strangle the Iranian economy, specifically trying to pressure payrolls in oil, petrochemical, banking industries, perhaps even firms linked to the Islamic Revolutionary Guard Corps.

You said that you see no behavior change, but that kind of pressure, does that have the possibility of putting pressure on the regime to make them feel like they have to change behavior?

In your opinion, no.

It hasn't worked yet.

I mean, the first time, we have to remember, the first time Iran was sanctioned was 1953, when Iran's democratically elected prime minister, Mohammad Mossadegh, nationalized the oil.

That was the first time that Iran was sanctioned.

And it was the message by the West that "We need to control your resources."

So this is nothing new for them.

And these sanctions campaigns that have intensified over the years, this narrative from the West, that this time they can't take it, this time it'll be different, they've heard it before.

And history shows they've overcome it.

Will it be different this time around?

If history is any indication, they'll survive it.

But we'll see.

We'll see what the coming months hold.

The confidence that you're displaying, frankly, is expressed by the government.

You had what we believe is the first interview with an active IRGC commander by an American news outlet back on August 11.

And he told you this.

The longer this war lasts, the more experience we gain.

We had never seen a real war to gain real experience, to learn how to fight with America.

In these five months, we have learned how.

We have also seen how the American military is weaker than what we perceived.

So there are obvious challenges, obviously, to what we just heard.

Iran's missile and drone capacity has been degraded.

The economy is facing headwinds.

Is this braggadocio in any way?

Sayah: No.

No.

I mean, they're still standing.

A lot of their military leaders, political leaders, their supreme leader was assassinated.

And their leadership is still standing.

The U.S.

and Israel have come out and explicitly on a number of occasions said that the regime change is the goal.

And the leadership, the names of the leadership may have changed.

But the structure is still there.

And they're still surviving.

And keep in mind, you know, from Tehran's point of view, for years, over and over again, they gave the U.S.

opportunity after opportunity for what they viewed as a fair deal.

The JCPOA, it was ripped up soon after in 2015.

And remember the assassination campaigns, the nuclear scientists dating back to 2009, Qasem Soleimani was assassinated.

Over and over again, they didn't use this military capability that they had.

This didn't happen overnight.

Their missile capability did not happen overnight.

And they had this capability.

And this is an indication from Tehran's point of view that over and over again, they gave the U.S.

for a chance for a diplomatic solution where the U.S.

would view Tehran as an equal, would respect their independence, would respect their sovereignty.

Over and over again, from Tehran's view, the U.S.

failed to deliver.

The latest failures from Tehran's view, last June, where in the middle of negotiations, they were attacked.

And then again on February 28, once again, in the middle of negotiations, they were attacked once again.

And, of course, what you hear from the critics of the regime, from American officials on both sides of the aisle who've been dealing with the Iranians for decades, is a concern about regional terrorism, right, about what the U.S.

describes as the largest state sponsor of terrorism.

You've got proxy networks that Iran has used around the region for its forward defense, whether Hezbollah in southern Lebanon, the Houthis in Yemen, Shia militias in Iraq.

That's the narrative that you get from Washington, looking at it at a more geopolitical lens, at a regional lens.

Yeah, from Tehran's view, it's political and military realism.

When you're surrounded by scores of U.S.

bases, when you have the U.S.

toppling and attacking and starting wars with one country after another, for them it is logical to extend their security and use proxy forces to create a buffer between themselves and U.S.

bases.

Over the years, it hasn't worked.

All the countries, from Syria to Iraq, they house American bases, and that is why they're a security state.

For 47 years, they've been in the crosshairs of Washington, U.S.

forces, and their priority is national security, by any means necessary.

The proxies that we just talked about have all been degraded, largely through different conflicts over the last few years, mostly by Israel.

And so Iran has realized the power of the Strait of Hormuz in a way that, frankly, a lot of U.S.

officials and commanders knew was possible, but I don't think we really knew the true impact of what would have been the chokehold that Iran has maintained on the Strait of Hormuz now.

As Iran concluded that the best way out of this war is simply to make it as costly as possible for the United States and the world.

Sayah: Yeah, absolutely.

Absolutely.

And again, this is after giving diplomacy a chance.

Repeatedly, they sat down, even after their leadership, the supreme leader, was assassinated.

They went and sat down with the Americans, hoping for a diplomatic solution that wasn't delivered.

And now they see the Strait of Hormuz as a security lever.

If there's hostilities, if there's military attacks, they're going to ratchet up the economic pressure, not just for the U.S., but for the global economy.

And again, and this is a lever that they knew that they had, they could have used earlier.

But now, when it's... in their view, when it's come to a point where they've had no choice, they've been attacked, they're looking at the Strait of Hormuz as their only security lever.

Schifrin: So it's become the focal point of the conflict, obviously.

So I want to play a clip from the Strait, a part of a piece that you did for the News Hour in late May.

You got on a boat.

And again, before the war, the Strait of Hormuz carried 20% of the world's oil and natural gas.

All right, this looks like an Iranian oil tanker.

It has an Iranian flag.

It says Qeshm on the hull, which is the name of a nearby island here in Iran.

It is quite possible that this is one of the Iranian vessels being blocked in by the U.S.

naval blockade.

[Speaking in foreign language] I asked them how long they've been anchored here, and they say they're not allowed to talk.

[Speaking in foreign language] I asked them what their cargo is.

Again, they're not allowed to talk.

The U.S.

and Saudi are trying to reduce the importance of the Strait of Hormuz.

But do you see Iran lifting its chokehold ever?

Sayah: I think if they sit across from the table from the Americans, and if they have their sovereignty and independence acknowledged, if they're treated as equals, if their frozen assets are unfrozen, if what they view as unfair and illegal sanctions are lifted, my impression is they're willing to do that.

They're willing to cooperate with regional neighbors and even in the U.S.

to opening up the Strait.

If there's anything other than that, if they don't get anything tangible... And they don't want promises anymore, either.

The MOU was a promise that, in their view, wasn't delivered.

In their view, the U .S.

tried to push through routes through the Strait of Hormuz that wasn't authorized by the Iranians.

So, in their view, they didn't get anything tangible.

This time, they want something tangible before they make any decisions.

But my impression is that they're willing to do that.

Schifrin: But let's call a spade a spade.

I mean, Iran knows that Donald Trump is not going to pay reparations for this war, one of those demands.

They know that he's not going to lift all the sanctions.

To a certain extent, those demands are maximalist in the sense that they know they're dead on arrival.

And that's what makes me worried.

This is not an administration that has shown any signs that it will acknowledge that maybe this was a mistake and they have to make concessions.

And Iran, for them, this is a war of survival.

Schifrin: Right, so neither side are making concessions.

So, what's happening is they're climbing the escalation ladder.

And that is terrifying.

And I'm telling you, for the first time ever, I think to myself, is it possible that nuclear bombs will be used?

What would happen if the U .S.

or Israel dropped a nuclear bomb on Iran?

Would there be a price to pay?

And that's terrifying for me and a lot of other people.

And this conversation is going to come up more and more if they continue to climb up the escalation.

Schifrin: I don't think there's any indication that the U.S.

is interested in that, but the word "escalation," I think, is on a lot of people's minds.

Iran recently changed its tactics a little bit, had been targeting tankers in the strait, now targeting U.S.

warships, in addition to the attacks on U.S.

bases that we've seen throughout the region.

Is there a notion that Iran could escalate?

Is there a notion that this could escalate in a way and to Iran's thinking that it could benefit from that escalation?

They're certainly discussing it.

They see this as a regional war.

After the MOU, they saw what happened in Lebanon as an escalation by the Israelis and the Americans.

And they're certainly discussing it.

In recent weeks, I've even heard discussions about Iran carrying out preemptive attacks, which would be unprecedented.

But again, that's climbing an escalation ladder, which is pretty dangerous, where there's no end in sight.

Schifrin: Let's go a little bit internally here.

I want to talk about earlier this year, we saw the most widespread protests against the regime.

We'd seen in years the most widespread in the sense that they were urban, rural, poor, middle class across the country.

The U.S.

and other Western governments judged that tens of thousands of protesters were killed.

And recently, Human Rights Watch found that between mid-March and the end of August, authorities, quote, "Arbitrarily executed at least 59 men "on politically motivated "and vague national security charges "following grossly unfair trials," including at least 29 arrested in those protests that I just mentioned, five were executed in public.

The regime has a long crackdown on its critics.

What is the impact of this crackdown, if any?

Yeah.

First off, I've covered a lot of anti-government protests there.

The largest protest that I've seen was the Green Movement in 2009.

This one was significant, but not as large as 2009.

But it was an indication that a very significant sector of the population is unhappy with this government, and a sector wants regime change.

Another thing that's important to point out that the reports that tens of thousands of people were killed has been debunked over and over again.

And it's important in order for me to maintain my integrity as a journalist to say that these reports have been debunked.

And in many people's views, there was these false reports were justification for military intervention.

Schifrin: I mean, it's not just the U.S.

I mean, other Western governments, NGOs, you know, based here, based elsewhere, have cited these numbers.

They are varied, but it's thousands and into the tens of thousands.

The Iranian government has come out with a list with national IDs.

3117 people were killed.

No other organization that I know of has brought forth a name and a national ID in addition to those reports.

And it's important to point out that more than 200 of those killed were security forces, that there was a call by Reza Pahlaví, the crown prince, for people to attack police stations and government buildings.

And I don't know of any government, especially the U.S.

government, if you attack a government building, a police station, there's going to be repercussions.

I also stress that it was a crime against humanity to kill those civilians.

It was a crime.

But for me, it's important to point out that it wasn't tens of thousands of people.

Take the last few minutes here and talk about what it's like to report there.

You've been in and out of there for 20 years.

You've been reporting for us and others for the last 10 years.

You mentioned the Green Revolution in 2009.

Iranians came out to the streets, you know, claiming that Mahmoud Ahmadinejad, the president elected then, that election's been rigged.

You were actually banned from the country.

After that, you're able to go back.

First week of this war, what happens?

I haven't shared the story publicly, but five days into this war, I was doing a live report on my rooftop.

And I have a seven-year-old daughter.

I'd sent her to the Caspian Sea with her mother.

And when I came down to my office, I got a knock on the door, and 15 armed people came into my office.

And, you know, I thought I was done.

I thought I was going to prison.

I was never going to see my daughter again.

And they thought, they suspected me of taking pictures of sensitive areas.

And there was a nationwide text message calling on Iranian citizens to notify authorities if anyone was taking pictures and sending them to Persian language media outlets, for example, Iran International, which was fueling the call for regime change.

So these security forces thought I was a citizen taking pictures and sending them to Iran International.

So they came in my office.

They interrogated me.

And I showed them my press credentials.

And after, they went in all my drawers, wrapped up my hard drives.

And I actually had... [Chuckles] And I actually had an antique hand grenade that I bought from an Army Navy store in Detroit.

And when they saw this hand grenade, they were like, "What is this?

What is this?"

And I said, "It's an antique."

And they're, you know, they're like, you know, it's not common for people to have hand grenades as antiques over there.

But after three hours, when they confirmed that I had press credentials, even though they saw my American passport, my Iranian passport, they said goodbye and I left.

And I know there's a lot of people, the narrative is that dual citizens, American citizens are in danger there, that they arrest them there.

But this was, that I haven't seen any indication of that.

Schifrin: And they let you go and you're still going.

Sayah: Yeah.

Yeah.

And I feel safe there.

And the authorities have been fair.

And, you know, I've been able to report freely over there.

And you will keep reporting freely?

And are you able to report freely?

Yes.

Yeah.

I wouldn't stay there if I didn't have the freedom to report freely as best as I could.

And I hope I can continue to do that to make people better understand this very complicated situation in an incredible country like Iran.

Schifrin: Reza Sayah, it's been a pleasure.

Thank you very much for being here.

And that's all the time we have for now.

Thank you at home for joining us.

I'm Nick Schifrin.

We'll see you here again next week on "Compass Points."

Narrator: Support for "Compass Points" has been provided by the Judy and Peter Blum Kovler Foundation, Camilla and George Smith, the Dorney-Koppel Foundation, the Gruber Family Foundation and Cap and Margaret Anne Eschenroeder.

The Judy and Peter Blum Kovler Foundation, upholding freedom by strengthening democracies at home and abroad.

Additional support is provided by Friends of the News Hour.

♪ This program was made possible by contributions to your PBS station from viewers like you.

Thank you.

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