Roundtable: Iran’s Domestic Politics and Political Economy (Part 2)

Arash Davari, Peyman Jafari, Ali Kadivar, Zep Kalb, Arang Keshavarzian, Azam Khatam, Saira Rafiee, and Eskandar Sadeghi-Boroujerdi

It should be noted that this virtual roundtable took place in the first two weeks of November 2019 and, hence, predated the protests against the raising of gasoline prices that began on 15 November. We believe the participants offer critical insights and questions for understanding the context and conditions that made the current protests possible and, indeed, likely.

We have since asked the participants to assess the protests in relation to their earlier responses. Those assessments appear in response to Question 6 below.

To read the introduction and first part, click here.

Question 3: The Impact of Sanctions


Have recent sanctions been as consequential as they appear in global media or as intended by the Trump administration? Which sectors of Iranian society have been most affected by the recent sanctions regime? Have any sectors or classes benefited from it and how? Are the effects of recent sanctions in Iran distinct?
 

Zep Kalb: For the average resident of Iran, the sanctions have been devastating. The United States has perpetrated a humanitarian crime, another one to be added to its resume. Sanctions have raised the prices of goods and have made access to particular types of medicine and commodities hard. It is difficult for an American or European citizen to understand the level of anxiety and stress created by seeing the price of your groceries increase on an almost daily basis. That anxiety does not lead to enthusiastic revolutionary fervor; it leads to depression, fear, and a belief that any solution is better than the current situation.

That is not to say that there have not been temporal or geographical variation in the effect of the sanctions. In the spring and summer of 2018, when fresh US sanctions first hit the country, sellers hoarded many commodities, making it hard to even buy a fridge or an oven. This has now been resolved. Afghans have left the country in droves as the construction and service sectors they occupy collapsed and the lower Rial undermined the value of their remittances. This has, in turn, created some employment opportunities for Iranians albeit at the very low end of the labor market. Finally, some export-oriented industries and regions are actually doing well as foreign demand for their goods has skyrocketed. For instance, fishing villages in southern Iran are prospering as are several major factories, not least of which include the Haft Tappeh sugar mill complex. The major cities, especially those with a lot of renters such as Tehran, have fared worse.

Azam Khatam: If the sanctions were meant to demilitarize the Iranian regime, I doubt they have been successful. New international tensions have led to a more militarized state exempted from its social and developmental tasks. Contraction and slow economic growth, sudden inflationary spikes, widespread bankruptcy in the industrial sector, and high youth unemployment mark some impacts of sanctions (and subsequent militarization) in recent years. Foreign exchange reserves have been excessively used to balance budget deficits, pay back government debts, and recover from natural disasters, including April’s countrywide flood. 

Four hundred thousand Maskan-e Mehr units are on a waiting list to receive funds needed for their completion and eventual delivery to enlisted buyers. Launched in 2008, Maskan-e Mehr aimed to build 2.2 million affordable housing units for low-income groups in a ten-year period. To eliminate the price of land from construction costs, poor public lands in the peripheries of cities were transferred to developers. Recent housing price spikes have led to a renewal of interest in buying MM units. By contrast, only one-third of the completed units have been sold due to insufficient infrastructure, poor construction quality, and bad locations. 

Construction, finance, and certain technologies have been prioritized over comprehensive plans for industrial and agricultural growth. Iranian companies, politicians, and the military sector now hold significant interests in real estate. Public and private banks, public pension funds, parastatal foundations, and semi-public companies are increasingly involved in land grabs and massive construction projects on the peripheries of cities, or the construction of mega malls and luxury towers inside them. The five hundred thousand vacant apartment units in Tehran alone and the more than 2.5 million vacant units across the country, per the figures provided by the Statistical Center of Iran, testify to the speculative nature of these developments.

Ali Kadivar: A recent assessment by the Parliament’s Research Center indicates that from 2017 to 2018 the population under the poverty line increased from about sixteen percent to somewhere between twenty-three percent to forty percent. While these numbers are not only the consequence of sanctions, American imposed sanctions were the biggest shock to Iran’s economy that year. They are probably responsible for a big portion of the increase. We can conclude that the sanctions have hurt the lowest strata of society the most. 

We can also make some observations on the sanctions and their effect on the internal dynamics of the political system. As a result of sanctions, the pressure the United States has been applying to Iran, and tensions with Saudi Arabia, we observe more cohesion within the state elite, rather than the implosion of the regime as some in Washington hoped. For example, during President Rouhani’s first term we observe direct confrontations between Rouhani, on one side, and Iran’s Leader Ali Khamenei and the IRGC on the other. During Rouhani’s second, there are almost no instances of similar confrontations in public. It seems that regime factions prefer not to reveal disagreements and disputes in the face of what they perceive to be an existential threat to the political system as a whole. Furthermore, when military confrontation, either with the United States or its allies such as Israel or Saudi Arabia is on the horizon, armed forces naturally take a more salient role in the political scene. The current situation has strengthened the Revolutionary Guards even more than before. For example, in the recent tension about oil tankers, the Guards seized a British tanker after Britain had seized an Iranian oil tanker. The Guards definitely benefited from this situation by playing the role of guarding Iran’s national interest. They gained credit for doing so in the eyes of the public.

Peyman Jafari: The sanctions have been presented as part of the “maximum pressure” policy on Iran, the goal of which has been somewhat ambiguous. For hawks in Washington, it was always about “regime change.” This strategy is also advocated by the pro-Israel think tank Foundation for Defense of Democracies (FDD), and a number of Iranian exile groups, most importantly the monarchist Farashgard (Revival) and the authoritarian cult of Maryam Rajavi (the Mojahedin-e Khalq Organisation, MKO). They started with the belief that the sanctions would soon lead to the fall of the Iranian regime. It would either be overthrown by mass protests in response to the economic crisis or, when pushed into a corner, it would retaliate and provide the pretext for war. Others, most importantly President Trump, thought that the “maximum pressure” policy would force the Iranian leaders to roll back their influence in the region and accept a humiliating new agreement instead of the nuclear deal.

None of these goals have been realized for a number of reasons that are ignored by the hawks and their native informants in Washington—because they either prefer wishful thinking or lack an understanding of the complex situation in Iran. The Iranian economy is in crisis, but it is not collapsing as the advocates of “maximum pressure” expected. It has been able to absorb the initial shock after Trump announced the US departure from the nuclear deal and introduced sanctions. Let us look at the indicators. While annual inflation rose from about ten percent in May 2018 to more than fifty percent a year later, it has declined to just above forty percent in August. Similarly, GDP shrank by five percent during the Persian calendar year 21 March 2018 to 20 March 2019, but there are signs that the “slide is bottoming out,” as Djavad Salehi-Isfahani has argued, as increased import prices are stimulating local production. 

This does not mean that the economy is doing well. Far from it, mismanagement, corruption, and the sanctions have had an effect on ordinary Iranians, who feel the brunt of these policies and their repercussions, as the poverty figures I discussed above illustrate. The assumption, however, that misery will automatically lead to insurrection, let alone democratic transition, is quite foolish. 

Moreover, rather than reducing Iran’s influence, “maximum pressure” has pushed Iran to expand its influence. This is part of Iran’s “asymmetric warfare” strategy, which is based on the hit-and-run operations of the IRGC, and reliance on allies modeled on the IRGC in Lebanon, Syria, Iraq, and Yemen. What is new is that “asymmetric warfare” has surpassed the low-technology method of guerrilla organizations that characterized Iran’s earlier regional presence. The Iranian state has been able to adopt technological developments previously monopolized by the great powers, most importantly middle range and cruise missiles, and drones.

Iran first developed this strategy based on lessons it drew from the war with Iraq, in which all the Arab countries except Syria supported Saddam Hussein’s invasion of Iran in 1980. At crucial moments, Saddam Hussein also received support from the United States. The other incentive came from the American invasion of Iraq in 2003 when more than 170,000 American soldiers were stationed next to its border. Some in the White House were joking “everyone wants to go to Baghdad, but real men want to go to Tehran.” Iran’s reliance on asymmetric warfare is also explained by its conventional military’s relative weakness. While Iran has spent annually less than three percent of its GDP on its military budget in the last decade, that figure has hovered around ten percent for Saudi Arabia and around six percent for Israel. The further Iran is pushed into a corner, the more it will fall back on its asymmetric strategy. This was on display when the oil facilities in Saudi Arabia were attacked on 14 September.

Question 4: Social Mobilization


In the past decade, strikes by various workers’ associations (including truck drivers, teachers, and Hepco workers) repeatedly made public claims on the state. These labor actions were amplified by social welfare protests against austerity in December 2017 and January 2018. Recent reports suggest that pensions of military officials are under pressure and on the verge of collapse. Some years ago, teachers’ pensions similarly faced collapse. What is the current terrain of civic contestation around economic rights?

Saira Rafiee: Let me first express my disagreement with the characterization of the Dey Mah riots of December 2017 and January 2018 as “welfare protests.” Despite the fact that they were mostly the outcome of massive economic discontent caused by both sanctions and neoliberal state policy, it is important to account for the slogans and express demands of the protestors, which mostly targeted the political establishment, rather than certain economic policies. Aside from vague expressions of discontent over inflation, state corruption, poverty, and economic hardships, these riots did not state clear demands with regard to “economic rights.” This could in part be due to the hegemony of neoliberal ideology in Iran, which was forcefully propagated by the media and also facilitated by the particular conditions of Iranian society. The glorification of the private sector, and calls to limit the state’s role in economics, resonated with feelings of discontent toward a state that meddled in many aspects of social and private life in Iran. The allure of freedom of consumption was intensified by frustration with a state that even forced its desired way of clothing on citizens. Repressive measures on the state’s part, along with views of the government as inherently inefficient, have contributed to the popularity of neoliberal ideology in Iran. 

These reasons likely played a role in the absence of demands for increased funding in healthcare and education or for social welfare in general during the Dey Mah protests. This all is of course very different from the organized protests of workers in the last couple of years with their clear demands, which have been radicalized and politicized over time. We have seen how in many cases these protests began with the demand for timely payment of wages but later extended to state policies and targeted privatization per se. Unlike the Dey Mah riots, workers’ strikes have been articulate and persistent despite fierce suppression. General expressions of discontent such as the Dey Mah protests represent an unreflective outburst of frustration of mostly atomized subjects and can be readily appropriated. In contrast, workers’ associations are usually the product of the deliberations of members whose immediate experience has led them to democratically organized forms of collective social and political struggle. The distinction between the rational discourse of workers’ protests and the outbursts of frustration and rage over conditions is highly significant as it draws a line between democratic and authoritarian politics.

Peyman Jafari: Without a doubt, the worsened socioeconomic conditions have led to protests, and will continue to do so. However, for these protests to coalesce into a national movement, a significant part of the population, including sections of the middle class must join them, and there must be networks that can organize, sustain, and connect the protests across the country. Both factors require the existence of the expectation or hope that struggles will, in fact, bring positive change. Mass national protests have not yet emerged because most Iranians do not feel mobilized but rather paralyzed. They are caught between the fear of an increasingly repressive state and the external threats of war and sanctions. 

Azam Khatam: The Trump administration’s unilateral decision to destroy the 2015 nuclear deal, the Iranian government’s subsequent failure to improve the economic situation, and a dual state polity all created a weak government inside a resilient state that relied more and more on the functioning of institutions supervised by the supreme leader. Rouhani is witnessing a level of disintegration of his administration which is unprecedented in the Islamic Republic. A series of disasters long before the protests in December 2017 marked the failure of the government to protect its population against catastrophes. In the first month of the year, a deadly fire resulted in the collapse of Tehran’s Plasco high-rise, a seventeen-story landmark building with over 1,200 workshops, and the death of fifteen fire fighters trapped in the melting building while attempting to rescue others due to mismanagement. Local government’s late response to the Azad Shahr Coal Mine collapse in May led to the death of thirty-three trapped mine workers in the absence of an effective rescue operation. Two months after a November quake in Kermanshah, survivors died due to shortages in adequate shelter and heating equipment. This event confirmed that Helal Ahmar, one of the leading Red Cross organizations in the world, had become dysfunctional and disintegrated. The money invested in pension funds were locked up in ambitious development projects with no return to pay monthly retirees. Finally, new owners of privatized industries found it more convenient to sell their industrial land, or to change its zoning to residential land use and thus get rid of the labor costs and complicated problems of industrial production under sanctions.

The times of chanting against both political factions, prevalent in the 2017 protests, have passed. The Trump administration’s termination of the nuclear agreement with Iran, the Syrian war, and the United States’ “maximum pressure” policy have resulted in the consolidation of anti-Western politics in Iran and a reliance on military power to defend the country against foreign attack. By expanding the roles of parastatal institutions and foundations in decision making for development plans, cultural policies, social service provisions, and even disaster management schemes, a well-connected and coordinated network of organizations is emerging which might play a role in the politics of the post-sanction era or even the troubled transition to the leader’s successor. This networked leadership is more opaque and less accountable to other branches of government and the electorate. Its aggressive expansion has challenged the functioning and integration of the elected government. In an open letter to the president in May 2018, Lili Golestan, an outspoken intellectual asked Rouhani: “Where are you Mr. President? I cannot see you.” This may describe how people see the presidential administration’s retreat from its cultural policies when several films, music concerts, and cultural events were banned by conservative institutes. In chanting “Reza Shah, bless your soul,” 2018 protestors were effectively praising the former dictator for erecting a functional technocracy and bureaucracy.

Zep Kalb: I would contest the phrasing of this question. I do not think the Dey Mah protests of late 2017- early 2018 should be classified, tout court, as “welfare protests against austerity.” Many different grievances were expressed in protests that took on a variety of scales, forms, and targets. In some cases, there were worries that local elites had an interest in stoking unrest. Other times, accusations were made that middle-men, brokers, and traders played an active role. Indeed, some bazaars and shopping malls went on strike. Lacking better evidence, I assume that all of these accusations have a degree of validity. What is also quite clear, however, is that workers were not a major component of Dey Mah, even though the majority of protests both before and after have been labor protests. That is, the protests were not labor protests in the sense of having clear occupational origins.

My own doctoral research looks at labor-state bargaining. I have found that many labor actions do not necessarily make claims on the state, as the question implies, but they call on authorities for support in bargaining with employers/management. Most labor protests are staged by employees of single factories. Usually, employees have a grievance that they file a legal complaint about. While the courts are generally efficient, authorities are lax enforcers of these rulings and are slow in forcing employers to act. Thus, workers employ public protests in front of government institutions to make sure legal complaints are processed and enforced. This appears to work in their favor, and so more and more workers are staging protests. Labor actions are mostly local, small, and peaceful. They are, mostly, about pursuing their legal rights. Over the past years, labor protests have almost never crossed class boundaries, and, except for a small number of occupations (teachers, nurses, truck drivers), they do not cross regional boundaries either. Obviously, an important reason for that is limited state tolerance for active cross-class workers’ organizing. 

Ali Kadivar: There have indeed been a large number of protests by workers, teachers, and retirees, among others, over the last several years. But before I get into these protests, I would like to raise a question about your question. It is interesting for me that you describe the wave of protests of December 2017 and January 2018 as social welfare protests. It is true that a number of slogans were about high prices and inflation, but the majority of the slogans were against the entirety of the regime, the clergy, the supreme leader, Iran’s foreign policy in the Middle East and so on. Two Iranian sociologists, Abolfazl Hajizadegan and Hamid Reza Jalaeepour, have provided an analysis of all the slogans in available videos of the protests that supports this trend. I am currently working on an analysis of the geographic spread of the protests, and I find that indicators such as development or unemployment are not the main predictor of whether a county had a day of protest during this cycle. In short, I think this protest wave is different from the everyday protests of workers, teachers, and so on. 

As for societal protests, which are often about unpaid wages or pensions, we can make a few observations. First, it seems that this type of protest has been routinized. To an extent, these protests have been tolerated by the government. Major news agencies cover them. On many occasions, the protests result in negotiations and, at times even, concession. Of course, in some instances, the government has resorted to repression. We still need more systematic analysis to discern when protests are repressed on the street and when they are resolved through the judiciary. 

In either case, these protests have been mostly fragmented and depoliticized. Most workers’ protests happen in isolation from each other. They do not have formal organizational ties, do not coordinate protest activities, and their slogans and claims are not connected even though they are very similar. Existing political forces in the country, such as the Reformists, do not have organic connections with these protests. When the Green Movement erupted in 2009, there were reflections within the movement about this dynamic. For example, Kaleme, one of the movement’s main websites, started covering news of workers’ protests. The gesture did not culminate in further political actions or formations.

I would say the lack of connection between these instances of protest and other islands of opposition in Iran is the major challenge facing the political opposition and civil society. If we think back on protests by workers, teachers, dervishes, the Green Movement, and the Dey Mah protests, we see that they mostly happened in isolation from each other. For an effective contentious politics and opposition to emerge, these islands of opposition need to connect and come together. Of course, the government is very sensitive about these connections, and prefers that protests happen in isolation. In some cases where the government has cracked down on the worker protests such as at the Haft Tappeh sugar mill complex, we observe that this is also a case where workers were connected with activists outside the factory and made claims beyond their unpaid wages. In Haft Tappeh, the workers’ leaders (such as Esma’il Bakhsi, who is currently imprisoned) brought up the idea that the workers could own and run the factory instead of the individuals who took over ownership in a nontransparent and corrupt process of privatization.

Question 5: Research on Domestic Political Economy


What are some questions you would like to see other researchers take up to provide a fuller picture of scholarship on Iran’s domestic political economy? Having read your fellow participants’ responses to the roundtable, are there any additional thoughts you would like to add?

Peyman Jafari: Zep Kalb correctly observes that neoliberal policies in Iran “do not materialize” and Ali Kadivar aptly characterizes Iran’s socioeconomic policies as hybrid, combining neoliberalism and welfare policies. These observations provide a good starting point to understand and theorize political economy in Iran. I am currently trying to address these issues in my research on post-revolutionary developments in the oil industry. 

But let me first make two qualifications here. We should be careful not to use the trajectory of neoliberalism in the West as the yard stick to measure economic developments in Iran. We must also acknowledge the versatility of the elements that co-constitute Iran’s hybrid socio-economic system, as I explained in my answer to question two. 

To adherents of liberalism, pseudo-neoliberalization and pseudo-privatization in Iran represents an aberration from the “genuine” (i.e., Western, liberal) model. The pseudo appearance of neoliberalism and privatization is thus understood as a malfunction due to Iran’s exceptionality as a “theocratic” state. This line of reasoning continues the fallacies of modernization thinking. 

It is true that the fragmentation of state institutions and political factionalism have been an obstacle to the attempt to center the economy as a whole around the goal of capital accumulation. Those attempts have been only partially successful and have been undermined by the predatory activities of parastatal organizations and the centrifugal effects of factionalism. This is indeed a particular, though not an “exceptional” feature of the Islamic Republic of Iran. But from a comparative international perspective, the persistence and dominance of state and para-state sectors next to private capital is not “exceptional” as, for instance, the similarities with Russia and Egypt demonstrate. Hence its explanation needs to move beyond religious questions. I think what happens below the state—with subaltern resistance—and above the state—in international political economy—are central.

Those controlling state-owned companies and para-state organizations would have perhaps been inclined to allow expansive privatization if they believed they could maintain their power at the top by moving sideways from the (para)state to the private sector. Some former bureaucrats and IRGC-commanders have made this transition. But that trajectory is currently considered too risky by the majority of the Iranian nomenklatura. 

One challenge comes from subaltern groups, particularly workers. Neoliberal reforms undermined the populist social contract in Iran, as they did in Egypt, and have led to protests as we have seen in the case of Haft Tappeh. Confronted with this challenge from below, capital owners in the private sector and those former state officials trying to enter the private sector are permanently reminded of their reliance on the state for repression.

The other challenge comes from forces operating above the state. Global capitalism has lost much of the ability it had in the 1950s and 1960s to integrate emerging economies such as the Asian Tigers into global processes of capital accumulation. This created the possibility for the formation of new capitalist classes whose members emerged out of state institutions and state-owned enterprises. The crisis of profitability that has continued with some intervals since the 1970s, and the loss of geopolitical incentives (which, during the Cold War, for instance, ensured massive foreign investments in South Korea) have weakened the incentives. Iranian domestic capital will have a very hard time surviving when exposed to competition in the international market if it lacks the support of the state. Hence, we see a trend that has been visible in post-Soviet Russia and many developing countries that have undergone similar neoliberal reforms: the emergence of capitalist elites closely allied and integrated with the state.

Azam Khatam: I agree with the observations others are making about understudied topics—e.g., the ways in which conservative populist politics in Iran integrated a neoliberal logic of rule while retaining an interventionist strategy. Iran is not unique in creating such hybrid mechanisms, but it is one of the less studied cases. Another important understudied topic is how sanctions are changing our physical and urban landscapes by changing the priorities and fiscal mechanisms of governing provincial regions as well as cities. Previous priorities concerning the allocation of public money to national and local needs have changed dramatically in response to the sanctions and to regional tensions. The long-term impacts of such reallocations—on provincial gaps, social inequalities and regional conflicts—remain unclear. Whatever they may be, these potentially long-term impacts will be shaped by environmental changes and the recent increase in natural disasters.

Zep Kalb: Many researchers continue to shy away from studying Iran’s political economy. Partially this has to do with issues of access and lack of robust data. What we know, and what some of the other discussants have pointed out, is that Iran’s political economy is, on the one hand, not all that exceptional, and yet at the same time stands out for some of its particularities. It has in common with many other middle-income countries, especially in the low-growth Middle East, the interpenetration of the state and civil society in market dynamics. It stands out for a national “resistance” economy that has emerged to deal with tough and long-lasting US and EU-imposed sanctions. Untangling these processes, and being able to link their differential outcomes to domestic political competition and social movements, is worthy of more scholarly inquiry, and would enlighten our understanding of state-society relations and development more generally.

Question 6


Given the recent rise in gasoline prices and subsequent nation-wide protests, would you like to add anything to your discussion?

Zep Kalb:I emphasize again that it is important to not simply see the current protests as a response to “strain,” in which a fiscally constraint government pursues austerity policies that put economic pressure on citizens, who in turn start to protest. This is the story the Trump administration tells itself, and the United States, no doubt, sees the current protests as vindication that its “maximum-pressure” approach is working. But, as I made clear in response to the above questions, I think this story is incomplete and leads to misguided policy.

The government policy to reduce oil subsidies, which disproportionately benefit the rich, and increase cash transfers, which very effectively reduces inequality, has frequently been praised as equitable, fair and economically sound. As I suggested, a more fruitful approach is to analyze the protest, including the current protests, as forms of popular participation and state-society bargaining. In particular, the current protests should be understood in relation to Iran’s longer trajectory of populist welfare politics. Arguments that refer to Iran’s “neoliberal” policy-making or to strains induced by sanctions, fail to grasp, I think, the nature of the protests, their scope, and their geographical extent.

Azam Khatam:The government’s sudden decision to triple gasoline prices amidst an ongoing acute economic crisis caused by international sanctions was a shock that sparked outrage across the country. The outburst has been much more intense in provincial cities, more economically deprived regions, and low-income communities surrounding Tehran and larger cities. The frustration at the persisting uneven distribution of wealth, resources, and incomes in part explains the geographies of protests against the lifting of subsidies and rises in the prices of fuels and other basic necessities. Gasoline is a state monopoly, and its price is nationally set by the government. Given the dearth of alternative affordable fuels or modes of transportation, there is no practical alternative to cheap fuel for ordinary working people. Frustration with new prices is higher in cities where people suffer from extreme interprovincial and regional disparities and recent environmental crises—such as extreme droughts and floods—have only exacerbated these inequalities by damaging ordinary people’s livelihoods and means of subsistence in rural areas. Forced migration from rural regions and smaller cities has intensified the pressures on larger cities in the south and south-east of Iran. Cities in the southwestern province of Khuzestan, for example, have yet to recover from last Spring’s deadly floods. The province of Kermanshah remains decimated by the major earthquakes of 2018. There are many similar examples from across the country, wherever one looks.

The income gap also has increased dramatically in recent years. In 2018, the average annual income of an urban household was less than five thousand dollars (43,500,000 Tomaan). According to official data, the poorest thirty percent of the population had a net negative income, meaning their income was less than their annual costs. In other words, a significant segment of the most economically vulnerable population have had to resort to selling their meager assets or go into debt to survive on a daily basis. Any slight increase in the prices of basic commodities can easily tip this precarious balance and push them into extreme misery. The next income group, the middling thirty percent of the supposedly middle-class population, also live on a thin margin. Official data shows they can also fall into a red zone, as their costs of living have exceeded their stagnant income in this fiscal year. The Official Household Income Report for 2019 has not yet been made public, but there is little doubt that the overall household budget gap has worsened considerably in recent months as a result of an acute rising inflation rate and negative economic growth. The impacts of the gas price increase are simply enormous, and at least sixty percent of the urban population will face a significant challenge in coping with its repercussions in the long term.

Saira Rafiee: The nation-wide protests, that the government turned into bloodshed, followed a three hundred percent gas price hike enforced as part of the “Budget Structure Reform.” While the sanctions have had an undeniable effect on this decision, it should be noted that cutting energy subsidies has been the long-sought goal of different administrations since 1990. The headline of a lead article on the protests in Sazandegi, the newspaper affiliated with technocrats formerly close to Rafsanjani, read: “The Cost of Surgery.” Neoliberal economists have been advocating subsidy cuts and price liberalization for a long time in terms of a much needed but painful surgery. Interestingly enough, almost all of the “economic experts” interviewed by Iranian oppositional TV networks on the protests were also in agreement that cutting energy subsidies is a correct decision, notwithstanding their criticism of the time or manner of its implementation. These cuts are only one component of the “Budget Structure Reform,” which is basically designed with the goal of further state withdrawal from social provisions and includes other austerity policies such as putting limits to the coverage of Salamat healthcare, the Iranian version of Medicare.

Neoliberal policies and sanctions have been complementary forces, destroying the fabric of Iranian society. Neoliberal policies have strengthened elites’ grip on power by transferring capital and resources from public ownership into their hands. Sanctions have merely strengthened that elite, further disempowering Iranian society. The effect of sanctions on shifting the balance of power in favor of authoritarian regimes has been highlighted in various iterations of scholarly research. The new wave of protests in Iran is just another example showing how an unintended collaboration between the American and Iranian state ends up pauperizing and suppressing Iranian society. It clearly shows that while sanctions have impoverished the people and intensified their frustration with the regime, the latter’s ability to suppress the protests has not diminished. The Islamic Republic has proved that it would prefer to transmit the economic pressure caused by sanctions to the people rather than cut its military costs or reduce its military presence in the region. The continuation of sanctions under such conditions is an act complicit with the slaughter of Iranians.

Ali Kadivar: In my previous comments, I mentioned that after newly imposed sanctions we do not see as many rifts or differences between moderates and hardliners in the regime. I think the unity of the state elite in response to the brutal crackdown on protestors is the peak of this trend. At this point, President Rouhani is acting in complete agreement with the supreme leader. During the Dey protests, the state elite was rather divided and different factions did not want to take responsibility for the crackdown. But in this wave, Leader Ali Khamene’i has taken direct responsibility and President Rouhani is also warning the protestors. Also in this round, it seems the state has been well prepared to crack down, while during the Dey protests it seemed that the government was taken by surprise. The fact that the internet was shut down only one day after the outbreak of protests is greater evidence that the government was well prepared to use all necessary repressive measures.

About a month ago, we read in the news that the main admin of a notorious opposition website Amadnews was detained in Iraq and transferred to Iran. The Iranian government believed that Amadnews played a significant role in spreading the previous wave of protest; my ongoing research about that wave confirms such an effect. I think targeting Amadnews has also been part of the repression strategy in this wave of protest. The government has adapted its repressive measures to recent waves of protest enabled by digital media. The state might be successful in putting down this wave of protest, but I do not think this is the last wave of anti-government protest in Iran. Thus far each wave has become more radical in their demands and also wider in their geographic spread. A main weakness of this wave of protest seems to be the lack of organization for coordinating and changing tactics. This time protesters were perhaps taken by surprise, but that may not be the case next time.

Another point that I want to make is that the rise in the petroleum price is just a trigger. The problem is that this is happening on top of all the economic hardship caused by sanctions as well as mismanagement and corruption in the Iranian government. People who are angry feel frustrated because they have had no input—neither in affecting the direction of Iran’s foreign policy, nor in socioeconomic policies. Even the Iranian parliament, elected with the filter of the Guardian Council, has not had a voice in either of these policies. Recent comments by President Rouhani show that he may have preferred making a deal about the nuclear issue when he visited the United Nations but was unable to do so since the Leader, Ali Khamene’i, opposed such a deal. My main point is that the semi-representative institutions of the Islamic Republic have not had much weight in any of these major decisions, and now we see how a sharp decline in the representative institutions has gone hand in hand with the rise of anger in the streets.

Peyman Jafari: There is a lot to say about the protests, but I will limit myself to two points that reinforce or partly revise what I have said before.

First, when you look to the urban centers where the protests have been most widespread and intense, there is a notable overlap with the places that I mentioned in question one as having high urban poverty rates. Of the 106 people who were killed according to Amnesty International, for instance, thirty were in Kermanshah. Karaj was the scene of heavy riots as well, and it is, of course, the capital of another province with high urban poverty, Alborz. The periphery of Tehran has a high poverty rate as well, and here we saw riots as well: in Islamshahr, Robat Karim and other places along the road to Saveh to the south-west of Tehran, and in Pardis and other places to the east of Tehran. Thus, although dissatisfaction with authoritarian politics is widespread and was reflected in the slogans of the protests, economic grievances seemed to be the most salient driving force behind the protests. As the protests continued, political slogans became more pronounced in reaction to state repression. Another aspect of the geography of the protests is the ethnic dimension. The intensity of the protests was high in Kermanshah and Khuzestan, where respectively Kurds and Arabs feel marginalized and discriminated.

Second, despite their enormous importance, the fuel protests have not been able to continue, which is characteristic for this kind of rapid eruptions of anger, without the presence of organizations and leadership that can channel it into a sustainable movement. There are multiple reasons for this, but as I argued in my reply to question four, the fear for state repression on the one hand, and sanctions and the danger of foreign powers taking advantage of an internal crisis on the other still paralyzes millions of Iranians who despite sympathizing with the protests, are not prepared to join them. That might change in the future, especially because the state alienates ever more people with every round of repression, but we are not there yet.

Featured image: Set of Iranian rials banknotes. Image by Pavel Shlykov via Shutterstock.

[This is the second installment of a two-part roundtable on domestic politics and political economy in Iran featuring Peyman Jafari, Azam Khatam, Ali Kadivar, Saira Rafiee, and Zep Kalb. If you missed Part 1, read it here.]

Posted on Jadaliyya November 2019

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