For over a week, anti-government demonstrations have emerged across Iran. At this point, protests have been reported in dozens of cities with at least twenty people confirmed dead in sporadic clashes between protesters and law enforcement units. In Tehran, more than 450 people have been detained, and yet, despite the media hype, the unrest does not bear the signs of a revolution.
The origins of the recent protests are scarce, but it is believed to be started on December 28 of last year in Mashhad, which is the second most populous city in Iran. Located in the Northeast of the country, Mashhad is also a political stronghold for the conservative faction. The initial protest in the city was a response to a price hike for poultry products, which surged by nearly 40% in recent days.
Before long, there were complaints about unpaid wages, unlicensed credits, petty corruption, fraudulent bankruptcies, and much more. Later, on that same day, rallies were held in nearby towns and conservative politicians sought to exploit the situation, and encouraged further demonstrations in hopes of hurting the credibility of the moderate faction led by President Rouhani. However, as footage and images of protesters spread on social media apps, the conservatives soon lost control over the situation.
By December 29, anti-government crowds emerged in Tehran, and in other major cities such as Isfahan, Tabriz, Hamadan, and many others. What started out as frustrations over food prices soon included all different types of grievances. In this framework, the motives fueling the demonstrations are sporadic, and there is no unified objective.
For instance, some footages in Mashhad captured chants such as ‘death to Rouhani’, while in Tehran, there were anti-Khamenei chants such as ‘death to the dictator’. In this reference, it should be noted that both figures belong to different political factions, but other slogans that were chanted by protesters opposed Iran’s foreign policy in Syria such as ‘let go of Syria, think of us’.
These sporadic and contradictory chants illustrate that the unrest is neither a movement nor a revolution. Moreover, when compared to the Green Movement of 2009, the current demonstrations are small in size, lack coordination and leadership, as well as organization. However, this does not mean that the grievances of Iranians are illegitimate. Besides the obvious lack of civil rights, the deeper issue facing Iran is the economic dilemma that the public deals with.
Among the problems are the increasing living costs even though inflation has dropped from about 35% in August 2013 when Rouhani came into office to 8% in October 2017. Macroeconomic indicators do not always translate to real-life situations. For example, Iran’s inflation is affected by Washington’s restrictions on trade in dollars, which complicates Tehran’s securement of foreign exchange reserves, but at the same time, Iran heavily relies on the import of food that is procured by U.S dollars.
Due to the restrictions on foreign trade, the Ahmadinejad Administration introduced the subsidy reform plan to channel billions of dollars each year to bolster the industrial sector, as well as to support the lower income classes by stabilizing the average consumer price.
Yet, in spite of this intended effect, the opposite happened. Since the implementation of the reform plan in 2010, living costs have steadily grown, but wages have increased too little to compensate. As a result, the purchasing power of the Iranian public has decreased over the years. Iranians have had less money to spend, which is why fluctuations in food prices is a particularly sensitive issue. Rouhani was legally bound to go through with the subsidy reform plan, but in a twist of irony, the conservatives who introduced the subsidy policy blamed the ruling moderate group for the economic grievances.
Another economic obstruction in Iran is unemployment, and it remains to be a major problem in the larger cities. However, disguised unemployment or underemployment is a more widespread dilemma. The truth is that a large portion of Iranian society is highly educated in fields like science, technology, engineering and mathematics. Yet, there are not enough suitable jobs to meet the qualifications of the workforce, and a lot of this has to do with the continuously changing labor laws of the country. As a result, millions of Iranians are employed in jobs that do not use their skills.
Rising living costs and employment greatly contribute to the frustrations of the Iranian people. In essence, the economic anomaly in Iran where inflation drops and living costs rise due to the subsidy reform plan is somewhat a combination of Venezuela’s dependency on oil and Greece’s tax and subsidy inefficiencies. Unless the subsidy reform plan and the labor laws are revised, living standards in Iran will continue to decline and spark more unrest.
One more factor that contributed to the stagnation of the Iranian economy was the implementation of the JCPOA by the Trump Administration. With the diminishing threat of DAESH, cooperation between Washington and Tehran hit rock bottom over the course of 2017, and Iran returned to its attempts to project power into Iraq and Syria, while the U.S went back to its containment policy. The turn of events led to President Trump’s refusal to certify the JCPOA in October 2017, which stalled potential foreign investment in Iran.
In general, Tehran enjoyed a growth in GDP and government finances for roughly a year and a half before it returned to its old problems. Moreover, in that duration, the macroeconomic indicators did not improve the financial environment of the mainstream population.
Rouhani had promised economic prosperity and although he reduced inflation, stimulated economic growth bolstered the government’s finances and freed up Iranian exports. Rouhani’s economic efforts occurred in an environment where public expectations were disillusioned by the promises of the JCPOA which entered into effect in January 2016. The Iranian public had anticipated significantly greater prosperity, but the financial conditions for the average Iranian have yet to be improved.
Rouhani and his allies have acknowledged the concerns of the protesters, but the president also said that further violent anti-social behavior will not be tolerated. This admission gives the Rouhani Administration a sense of urgency. However, many of the economic issues require an overhaul of the subsidy and labor laws which will require time. Along the way, more protests are bound to emerge. With that being said, no political faction has endorsed the current demonstrations as it does not benefit them. Unless leadership emerges, the current unrests and future protests are unlikely to withstand the security crackdowns over a longer period of time.