JANUARY 4, 2018
All eyes are on Iran. On
December 28, as if from nowhere, protests broke out in Iran’s second most
populous city, Mashhad – out in the far east, near the Turkmenistan and
Afghanistan border. The protests moved with deliberate speed across the
country, to Kermanshah in the west and Bandar Abbas in the south. Tehran was
not spared, although it is not the epicenter of the protests. This is unlike
the Green Movement of 2009, when Tehran’s reform-minded citizens came onto the
streets angry with what they saw as a stolen election. It is unlike the student
uprisings of 1999, again centered in Tehran, when students protested over the
closure of the reform newspaper Salam.
Those were protests of a
rising middle-class, throttled by social sanctions and by political
limitations. Their protests culminated in the election of President Hassan
Rouhani, who is the current standard bearer of their hopes. Social sanctions
have been eased in Tehran – women openly sit in public without the veil (the
police in Tehran had said earlier last year that they would not arrest women
who did not wear the hijab). Even political rights are now somewhat available
to the reformers. Ali Shamkhani, secretary of the National Security Council,
said that restrictions on imprisoned reformist leaders would be lifted.
The current wave of protests
is characterized not so much by a desire for an expanded political system, the
terms of previous ‘reform’ protests. This is an upsurge against the privations
in Iran – unemployment, deprivation and hopelessness. The sharpness of the
slogans – even against the Supreme Leader of the country – indicates the level
of anger at the failure of the Islamic Republic to deliver the basic needs of a
growing and youthful population. The protests were no surprise to those who had
watched almost weekly working-class actions in factories and oil facilities as
well as protests by retirees and those who had lost money in the banking
crisis. These actions raised the confidence of the working-class and the lower
middle class, both of whom had seen their standard of living plummet.
Oil Revolts
What is taking place in Iran
is not unlike what is taking place across the oil-producing states from
Venezuela to Saudi Arabia. Oil prices began to drop sharply in the second half
of 2014 as a result of high output from Saudi Arabia and their Gulf allies.
Iraqi and Libyan oil production had fallen, so it appeared on the surface that
the Saudis and their Gulf allies were merely covering that shortfall. But as
supply far outpaced demand the volume of oil that the Gulf countries produced
seemed to have a political motive. It hurt Iran, already wracked by the UN,
European Union and US sanctions, but it also hit Russia and Venezuela. The West
and the Saudis saw these three countries – Iran, Russia and Venezuela – as
adversaries. It was quite clear that this was a political move.
Unrest in Venezuela mirrors
that in Iran. Both countries – since the 1940s – have been reliant upon oil
exports for their own development agenda, both countries failed to diversify
their economies beyond oil and both countries relied upon depleted national
budgets to provide social welfare to their populations. It was this narrowed
economic and political landscape that produced the Iranian Revolution of
1978-79 and the Venezuelan Revolution of 1989-1999. The political outcomes in
both were different, with the former dynamic being led and seized by the
Islamic clerics and the latter dynamic being led and seized by the Bolivarian
socialists.
Both Iran and Venezuela – from
different sides of the political spectrum – found themselves in the gun-sights
of the United States and its Western allies. It was this that led to the sanctions
regimes against both – pushed by the United States government. The sanctions
against Iran and Venezuela have been at different intensities, with Iran being
hit harder over the past decade. Neither Iran nor Venezuela was able to
effectively find an exit from the sanctions regimes or to create regional or
alternative trade networks that would earn them foreign exchange and investment
as well as enhance their ability to be less dependent on Western networks of
finance and investment.
Raised Expectations
Iran’s government – led by
Hasan Rouhani – had raised the expectations of the population when it
negotiated the nuclear deal with the West and the United Nations in 2015. The
sanctions cost Iran more than $160 billion in oil revenues since 2012. This penalty
was borne by ordinary Iranians, who saw their standard of living fall and their
aspirations for the future narrow. Rouhani had said that the nuclear deal would
attract investment into the country and free up Iran from the murderous
sanctions regime.
But, since the nuclear deal,
the handcuffs on Iran remain. The US – under Trump – tightened non-nuclear
sanctions. Trump’s belligerence towards Iran has stayed the hand of many
transnational firms that had earlier expressed interest in making investments
inside Iran. Rouhani’s bet has not really paid off. The 2015 nuclear deal, an
achievement in its own right, did not fully provide the kind of relief needed
for the Iranian population. Expectations were raised, but little has been
delivered.
As part of his pledge to
openness, Rouhani’s government released details of its budget to the public in
early December 2017. Rouhani pledged to spend about $100 billion – less than a
third of his draft budget – on public service programmes for job creation and
for a new social security programme. Inflation remains a problem, as do the
840,000 young Iranians who will enter the workforce next year.
Confidence in Rouhani’s budget
was dampened when the public got to see how much money goes towards the
clergy-dominated institutions. For example, in the city of Mashhad, where the
protests began, the Astan-e Quds Razavi, Iran’s largest endowment, a foundation
that controls a shrine in the city, owns 43% of the land in the city and has an
income near $150 million per year. In the 2017 presidential election, Ibrahim
Raisi, the candidate of the Supreme Leader Khamenei and head of Astan-e Quds
Razavi, openly said that Khamenei had allowed the endowment not to pay taxes.
This rattled a population that saw these institutions as sponges on a state
that had turned its back on ordinary Iranians. All of this produced a deep
sense of disquiet amongst those who don’t see themselves being the
beneficiaries of the nuclear deal.
Over 2016, Iran’s growth rate
did rise as oil left the country and pent-up demand inside Iran was allowed to
be fulfilled. The growth rate rose to a respectable 7.4%. But the danger signal
here is that the non-oil growth rate was a mere 0.9%. This was an oil-driven
recovery and it was dependent on oil prices. Before he came to power in 1979,
Ayatollah Khomeini had said, ‘Economics is for donkeys.’ The Islamic Republic –
unlike the Bolivarian government in Venezuela – made little attempt to
diversify the economy and prepare for a post-oil future. Rather it relied upon
its oil revenues for both its domestic policy and its foreign policy (including
the support to the Lebanese political force – Hezbollah – and the Syrian
government). Iran remained vulnerable as long as its economic power was
dependent on oil. Its vulnerabilities are now on display.
Official unemployment sits at
12.7%, but this is a very inaccurate figure. Sources in Iran say that the youth
unemployment rate might even be as high as 50%. To bring down inflation the
government has steadily eliminated subsidies on energy and bread. Prices of
these goods have gone up – a decisive factor in the protests. It is important
to point out that in anticipation of the end of these subsidies, the government
began a universal cash transfer scheme in 2010, which has been attributed to a
decline in poverty from 13.1% (2009) to 8.1% (2013). But the fact of a decline
in poverty did nothing to the anger at the subsidy cuts that came when prices
of basic goods (energy and bread) rose, despite the fact that overall inflation
declined. In fact, by 2014, the poverty rate began to rise again – a sign that
Rouhani’s policy of inflation control has been a direct attack on the Iranian
working-class and lower middle-class.
There is something vulgar
about the way Trump and Netanyahu and their ilk are fanning on the protests in
Iran. After all, it is the US-Israeli policy to strangle Iran that has created
the conditions for these protests. But the end of the sanctions has condensed
frustration in the government of Rouhani and in the Islamic Republic itself –
not on the West’s continued policies.
Politically Trump and
Netanyahu benefit from Obama’s nuclear deal; it has made it appear as if the
West is no longer responsible for the crisis in Iran.
Tens of thousands of people
have taken to the streets. But tens of thousands more followed to defend the
Islamic Republic. These are tense times for Iran. It is clear that the
government is going to have to accede to the pressure from this working-class uprising.
It is not enough to describe the protestors as foreign agents. Even if Trump
and Netanyahu, the monarchists and the Mujahideen Khalq try to take credit for
the uprising, they are not in charge. The well of Iranian patriotism is deep.
The Iranians will not take their orders from the White House. But neither will
they sit quietly as their lives fall apart before their eyes.
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