ACIS Iran Pulse Number 101 | November 27, 2019
On October 15, 2019, mass protests erupted in Iran and quickly spread to over 100 cities and towns across the country from Shiraz in the southeast to conservative Mashhad in the northwest. In contrast to Iran's December 2017-January 2018 civil unrest, the ruling authorities in Tehran acted quickly and brutally to suppress the current nationwide protests, revealing the regime's perception of an existential threat to its power. In what Amnesty International has termed "a harrowing pattern of unlawful killings," Iranian security forces killed between 100-300 protestors by the end of a week of protests. The government implemented a near total shut down of the internet to prevent protesters from organizing through social media and to block the dissemination of video images of the protests and their brutal suppression.
With enduring nationwide protests having already engulfed neighboring Iraq and Lebanon since early October (protests aimed against Iranian intervention as well as their own corrupt rulers), the current protests in Iran pose an unprecedented high stakes threat to the ruling elite. Despite the regime's formidable tools of repression, Iran's authoritarian system will not be able to cope with the structural challenge to its hold on power unless it can sufficiently stabilize Iran's economy.
One year after the United States' re-imposition of sanctions on Iran, tightened by Washington over the past six months under its 'maximum pressure' policy, Iran's mismanaged economy is reaching the breaking point. Eight months ago, the country's youth unemployment rate was already 27 percent and over 40 percent for university graduates, according the government-run Iranian Statistical Center. Since that time, Iran's economy has contracted even more than expected under the weight of sanctions combined with Tehran's costly military involvements in Iraq, Syria, Lebanon, Yemen, and Gaza. Iran simply has not created enough jobs while spending money abroad. The situation is worsened by Iran's rapidly aging population, whose increasing numbers are dependent on government assistance previously funded by energy export revenues.
The current wave of protests in Iran started as an ostensibly economic protest, sparked by the reduction of the government subsidy on gasoline that effectively spiked gas prices by 300 percent. Moving beyond civic unrest over rising prices, the demonstrations quickly evolved into a nationwide protest against the Iranian regime itself. Demanding the end of theocratic rule, protesters in several cities across Iran chanted "Death to the dictator." In many locations, such as Eslamshahr county just12 km from Tehran city, protestors torched a billboard featuring the image of Iran's Supreme Leader Ayatollah Ali Khamenei. In Shahriyar county 45 km outside of Tehran, protestors destroyed a statue of Khamenei's predecessor, the Islamic Republic's founder Ayatollah Ruhollah Khomeini.
In towns and cities, thousands flooded the streets to block central roads and entrances to highways. Dissatisfaction with the regime extended to condemnations of its massive expenditures on ideologically-justified proxy wars across the Middle East. In Tehran, protesters chanted, "Our oil money is lost, spent on Palestine." In Behbahan in Iran's Khuzestan province, Shiraz, and other locations, the common chant was "No to Gaza, No to Lebanon, I give my life only to Iran."
These protests are different from the largely politically-focused protests of the Green Movement that emerged from the outrage over the widely-perceived rigged 2009 elections that resulted in the re-election of then President Mahmud Ahmedinejad. Based in major urban centers and led by middle class Iranians, the Green Movement protests against the corruption of the ruling elite were typified by the slogan, "Where is my vote?"
In contrast, the current protests are focused on the economic consequences of the ruling elite's corruption and mismanagement of the country. The protests have occurred in the more marginal municipalities and townships in the outlying counties around Iran's major cities, such as Eslamshahr and Shahriyar counties outside Tehran, that are home to the Iranian working poor. In addition to the torching of gas stations, the Iranian press has reported the widespread looting and destruction of supermarkets and other chain stores in these economically marginalized regions, resulting in an estimated $17 million in property losses. Financial and governments institutions have also been targeted in the protests with banks and government offices being set ablaze.
In Tehran province alone, attacks occurred in the municipalities of Eslamshahr, Shahriyar, Robat Karim, Malard, Qods, Varamin counties as well as in the underprivileged sections of Tehran city itself. Looting has also occurred in other urban areas of the country such as Fardis and Esfahan, as well as the largely Kurdish cities of Kermanshah and Sanandaj.
The ethnic component is important. Many of Iran's ethnically non-Persian regions are economically underprivileged and harbor deeply-held grievances about discrimination and domination by the Persian-speaking majority. The unrest in Iran actually began a week earlier among the Ahwazi Arab minority in Khuzestan province adjacent to southern Iraq, inspired by the protests of their ethnic compatriots across the border. The volatile combination of ethnic and economic grievances in these regions, located on Iran's international borders, further complicate the challenge for the regime to maintain its authority. On November 23, 2019, Iranian Vice President Eshaq Jahangiri threatened regional countries that they would face retaliatory measures from Iran if it is proven that they were involved in abetting the protests.
The response of the regime to the current crisis indicates that it views these protests as posing a greater existential threat to its authority than the similarly economically-driven civil unrest that occurred in December 2017-January 2018. The ruling elite in Tehran knows its revolutionary legitimacy has evaporated. With the threat of ISIS all but eliminated, there is little sympathy for Iran's costly interventions in the Middle East promoted on the hollow, if not ironic, revolutionary claim of fighting imperial domination.
Even more than anti-imperialism, the Islamic Revolution's claim to stand for economic justice has been entirely discredited and may now have become one of its greatest liabilities with economic inequalities coming glaringly to the fore. Iranian economist Hossein Raghfar, based at Tehran's Al-zahra University, estimates that almost one-third of Iran's population, around 26 million people, live below the poverty line.
Without immediate structural reform, Iran's economy faces imminent collapse. For the first time in Iran's modern history, its new national budget will be calculated with zero oil revenue. The reduction of government subsidies has become an absolute necessity. By ending fuel subsidies, the Iranian government can recover $69 billion for the state coffers. The outrage among Iranian citizens is driven by suspicion that they will not benefit from those funds while having to pay for higher fuel costs and the higher consumer prices driven by those costs.
The reduction of fuel subsidies was recommended to Iran by International Monetary Fund (IMF) as part of its 2018 Article IV consultation with the Islamic Republic. Published on March 29, 2018, after the Iranian economy started rebounding as a result of the JCPOA and before the U.S. re-imposition of sanctions, the IMF recommended a smaller reduction of fuel subsidies combined with cash transfers to poorer Iranian households that would be vulnerable to the shock of the price hikes. Rouhani's government announced the commencement of cash transfers three days after subsidies were reduced, but the initial tranche of transfers has so far done little to quell the general discontent among the populace.
If the government maintains the elimination of subsidies and implements other structural reforms, it could help Iran weather the pressure from continued international sanctions over the near term. However, with the arms embargo against Iran scheduled to expire in 2020, most of the additional budgetary funds available through the cutting of subsidies and other reforms will likely be spent on fighter jets, battle tanks, and other weapon systems to redress the deficiencies in Iran's conventional forces. In this case, the current structural contradictions in Iran will intensify another order of magnitude.
The current protests, although wider in scope and greater in intensity, hearken back to the economic riots of the 1990s, such as the 1995 protests in Eslamshahr, when then President Akbar Hashemi Rafsanjani's economic reforms almost doubled the prices of basic consumer items. However, the brutality exercised by the Islamic Republic Guard Corps' Basij militia in attempting to suppress the current protests has changed the dynamics of the conflict and entrenching the delegitimization of the regime.
In the 1990s, social media did not exist. Even the use of social media at the time of the 2009 Green Movement protests was in its infancy compared to even a few years later during the Arab Spring, as its sophisticated use among Tunisian civil society activists demonstrated, or its present role as an organizing tool for the current Lebanon and Iraq protests. At the same time, because of the internet's use in business, the economic costs of an internet shutdown make such action unsustainable. The week-long shut down of the internet in Iran has resulted in millions of dollars of lost economic activity. As of November 24, the government restored about 85% of the country's internet connectivity, but still kept mobile phone data was unavailable in an effort to curtail the ability of protesters to mobilize.
A month prior to outbreak of protests in Iran, the IMF downwardly revised its forecast for Iran's economy, predicting a 9.5 percent contraction rather than the previously anticipated 6 percent. The continued U.S. sanctions will continue to drive Iran's structural contradictions to the fore. With ongoing protests among the Shi'i populations of Iraq and Lebanon, the Iranian regime's military involvement in those countries has lost any ideological legitimacy it might have once had in the eyes of the Iranian people. Iran's ruling elite has overreached. The brutal suppression of the protests in Iran reveal that the regime's authority is fragile. If Tehran fails to stabilize its economy and reduce the scale of its military expenditure, the structural challenge to the regime's hold on power will further intensify to a level beyond which the regime will be able to manage.
Dr. Micha’el Tanchum is a senior associate fellow at the Austrian Institute for European and Security Studies (AIES), a fellow at the Truman Research Institute for the Advancement of Peace, the Hebrew University, Israel, and non-resident fellow at the Centre for Strategic Studies at Başkent University in Ankara, Turkey (Başkent-SAM). @michaeltanchum
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ACIS Iran Pulse No. 101 ● November 27, 2019
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