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Against “Economic Surgery”: The Resurgence of Protest in Iran 

Since the winter of 2017, hardly a day has gone by in Iran without public demonstrations. Largely unemployed or underemployed young people from the most marginalized and impoverished suburbs of south-western provinces of Iran, as well as the urban working class, have turned the streets into the primary venue for the expression of their discontent with the persisting unemployment, poverty, injustice, repression  and exploitation; from a strike wave launched recently by bus drivers in Tehran, actions by temporary and contract workers in the petrochemical and oil industries, miners, Haft-Tapeh Sugar Cane plantation workers, and nurses and teachers, all consistently active for the past five years, to the current  mobilizations against the removal of state subsidies, labelled “economic surgery,” by State authorities. The end of subsidies for flour-based goods, dairy and oil products, chicken and eggs, has caused price hikes of as much as 300%. 

Although the government has replaced the subsidies with cash handouts worth between 10$ to 13$ per person, deposited to individual bank accounts in advance, the people are certain of the inefficacy of such compensation. They have learned the hard way that such a policy means further poverty, inflation, and unemployment for them while they endure the pain of neoliberal “surgery”. Little has changed since November 2019, known as “bloody November”, when the previous government of President Hassan Rouhani reinstituted the reduction of fuel subsidies, which resulted in a 300% rise in gasoline prices and sparked nationwide proteststhroughout Iran. Although the cuts were intended to raise money for the low-income population, the reform disproportionately endangered Iran’s working-class and impoverished citizens. Figures from the Central Bank of Iran (CBI) show that liquidity levels have more than doubled during 2017-2020, which has led to a high rate of inflation approaching 50% percent. The US dollar sold for just under 40,000 Rials in 2017 on the open market, but rose to 250,000 Rials in 2020; the US dollar is now valued at 300,000 rials. This history has shown the people that the government’s cash handout will lose its entire value in a very short time given the rapidly decreasing value of the national currency coupled with an equally rapid and continuing rate of inflation. 

The people have paid the price of such policies for more than three decades.  In December 2010 President Mahmoud Ahmadinejad ended the decades-long subsidy program for fuel, food, and other essentials, the result of which was a quadrupling of the price of gas overnight. Although he developed a compensation scheme of $40 per person each month which was supposed to benefit 60 percent of Iran’s population, and deposited two months’ payments into personal bank accounts in advance, the cash value of this compensation soon turned to nothing under the high levels of inflation.  As the economist Fariborz Rais Dana, arrested in Tehran soon after an interview with the BBC Persian service, noted: “The government knows the cash that it gives to people will evaporate under inflationary pressure. Thus, after a while the cash will have no effect. The government will get rid of the huge expense [of the subsidies] and will spend the money on buying weapons or other things, and people will be on their own.” Removing the subsidies, he argued , “will create more unemployment, more poverty, and more misery.” Now, in May 2022, the removal of the flour subsidy has triggered a new round of protests arising from the most impoverished regions of Iran, mainly in the south-west provinces of Khuzestan and Chahar-mahal-o-Bakhtiyari as well as the northern city of Rasht, the north-eastern city of Neyshabur and Golpayegan in the center of Iran. 

Just as previous governments repeatedly stated that the main reason for withdrawing subsidies was to discourage a widespread culture of waste and fuel smuggling, to reduce gasoline consumption and improve the environment, the present authorities also blame the price hikes on the smuggling of heavily subsidized flour into neighboring Iraq and Afghanistan. They assert that wheat prices globally have sharply risen since the Russian invasion of Ukraine in February, adding to the cost of subsidies in Iran. However, the truth is that, as President Hassan Rouhani, after the unrest subsided in 2019, remarked in explaining the government’s crisis-ridden economic situation: “Annually, about 450,000 billion tomans of budget is needed to run the country. However, at best, the tax that is expected to be collected next year is 150,000 billion tomans. Now the question is where else we can obtain the remaining 300,000 billion tomans?” The only way to compensate for the dramatic fall in oil revenues is to cut on the state subsidies. 

According to international statistics, after the United States announced its withdrawal from the Joint Comprehensive Plan of Action (JCPOA), also known as the “Iran nuclear deal” or the “Iran deal”, on May 8, 2018 and the re-imposition of sanctions on Iran, the sale of oil dropped from 2.5 million barrels per day to under 1 million barrels per day, which is lower than the sale of Iranian oil during the Iran-Iraq war. Therefore, in order to obtain extra funds for the government the lawmakers advocated cutting back the subsidies and spending part of the savings on cash handouts. 

As Kamran Matin correctly notes, since the political economy of Islamic Republic of Iran has an oil-rentier characteristic and is dominated by oil industry, the state controls and distributes a large proportion of the capital. Consequently, economy is so intertwined with the politics that it becomes almost impossible to distinguish between the two. Therefore, although most of the demonstrations in the course of the last five years have been ignited for economic issues, they rapidly take on a political orientation. In other words, the regime sees all protests as political and takes corresponding measures to handle them and most of the Iranian population regards the state entirely responsible for their mounting economic difficulties and low standard of living. The public distrust of the state is furthered by increasing awareness of numerous cases of governmental corruption, often involving the children of senior officials. This systematic corruption within the state grants a semi-oligarchic characteristic to it and the term ‘aghazadeh-ha’ (lords’ children) used in Iranian political discourse perfectly illustrates the gap between the state and the people. The systematic governmental corruption which, as Pooya Azadi notes, includes the political corruption prevalent in Iran today and entails a wide array of activities “including clientelism, patronage appointments, corruption in elections, smuggling and money laundering by the state, and manipulation of statistics”.[i]

Another factor in the people’s increasing distrust of governmental policies, apart from corruption, is the “neo-liberalization” economic scheme introduced in the 1990s by the government of the President Hashemi Rafsanjani. Rafsanjani’s economic policies supported privatization and the free market economy as a result of which class differences were intensified. The implementation of World Bank and International Monetary Fund policies, which granted loans to Iran and determined how they could be used in return, resulted in 50% inflation and crippling foreign debt for Iran. The dollar rate on the free market increased by a factor of 4.6, rising from 96 Tomans to 444 Tomans. President Rafsanjani also initiated the idea of involving Islamic Revolutionary Guard Corps (IRGC) in business transactions as a way of generating to independent income. Today virtually every sector of the Iranian market is dominated and monopolized by IRGC. Under the banner of the socialization and recruitment of rural and lower-class populations into the Basij (a branch of the IRGC), which undertakes numerous public-work projects to improve the rural economy, the “IRGC controls Iran’s shadow economy—the illicit smuggling networks, kickbacks, no-bid contracts, and the accumulation of wealth by its senior officials that remains largely unseen by the Iranian population”.[ii]

This economic scheme has deprived people of the access to basic goods and services promised to them in the initial years of the 1979 revolution by Ayatollah Ruhollah Khomeini, the founder of the “revolution”, which was carried out in the name of “the oppressed” and was committed to “social justice”. Now such services and goods are estimated to cost Iran between $70 billion and $100 billion annually, which is unfeasible due to the low budget imposed by US sanctions, governmental corruption, neoliberal economic plans and Iran’s regional interventions. 

The question that remains is how the regime will react to the recent uprisings. State officials attribute the social unrest not to the consequences of their policies but to the provocations of the “foreign enemy” and the conspiracy of the “counter-revolutionaries” (they need to be reminded that  every ruler has more to fear from his own citizens than from any foreign enemy). In his reaction to the uprisings in 2019, Ali Khamenei, the supreme leader of Iran, went so far as to redefine the meaning of “the oppressed” under whose name the 1979 revolution was undertaken as “the oppressed, contrary to what is often mistakenly said about vulnerable and inferior people today, means human beings who are the potential leaders of the human world and the caliph of God on earth.”

The regime has employed harsh repressive measures, including internet disruption, to restrict the media coverage of the incidents and the organization of the protestors. The images and videos taken and published by citizens during the protests show security forces firing bullets directly and purposefully at protesters in various parts of the country, thus killing and injuring protesters. So far, six protestors have been reported killed. In addition, the regime has taken such preventive actions as arresting social activists including the editor of Iran Farda Magazine, Keyvan Samimi, the prominent sociologist, Saeed Madani and documentary filmmakers. The schools and universities have been closed, while the international book exhibition is temporarily cancelled and football matches are supposed to be held without spectators to avert uprisings. Like the sociopolitical repression and brutality exercised by the Pahlavi regime, the demonstrators today are met by police arrests and detention, imprisonment, intimidation, torture, prolonged interrogation and forced TV confessions in the Islamic Republic of Iran. 

The depressing fact is that the absence of a unified left caused by massive repression of all the leftist parties and factions in the early years of Islamic Republic makes it very difficult for the deep social discontent existing among the Iranian masses to be fully expressed. Most of the distinguished dissident intellectuals and leftist activists have been either sent into exile or murdered thereby eliminating the possibility of organizing the protests except virtually, in the public sphere and social media. Another systematic policy undertaken by the regime to counter the protests, as Kamran Matin argues, is to instill fear among the people with the specter of the ‘Syrianization’ of Iran should the Islamic Republic be weakened or challenged. “The bitter irony is that the Islamic Republic has played a key role in the catastrophe that has fallen on the Syrian people.”

What is to be done by the international left? The international left must actively declare its support for the working classes and oppressed minorities in Iran while continuing to oppose direct foreign intervention in Iran. It has to engage the left-democratic opposition and pressure the Iranian regime to address the basic grievances of Iranian workers and toilers, the most important of which is the need for free, independent unions and organizations.  It is very important for the Iranian people to develop domestic resistance against the regime and reject any idea of external regime change. For this to be achieved, the international left must express explicit and effective solidarity with Iranian workers and minorities. It is crucial for the Iranian left to think and act beyond a purely anti-imperialist project, which led the Tudeh party and the Fedayeen (Majority) to cooperate with the new regime on the basis of its apparent hostility to the US and West causing the “failure of the left in Iran”, to borrow Maziar Behrooz’s phrase. 

The international left too needs to recognize that the Islamic Republic’s hostility towards the US and the West more generally does not exonerate it from the terrible crimes it has committed against the Iranian people, the violent and repressive neoliberalization that it has imposed on the Iranian masses, or the semi-colonial repression it continues to direct against minoritized peoples inside Iran. If Iranian workers and the broad masses receive the support of left and democratic forces in the West, they will be empowered to develop their own organic organizations and leaderships in the course of their own collective struggle for genuine democracy and social justice, which is the most effective way of blunting the efficacy of imperialist interventions.[iii]

Shirin Kamangar is an activist and academic currently living in Tehran.

[i] Clientelism here takes the form of distributing goods and jobs in exchange for political support through hierarchical organizations which can in turn mobilize people. Examples of such organizations include the Basij, pro-poor bonyads (e.g., Mostazafan Foundation, Imam Khomeini Relief Committee), and the Islamic Advertisement Organization. The task of monitoring the client side of the contract to ensure their loyalty to the regime is performed by Jihadi-type, highly autonomous local institutions such as Herasat, which carry the DNA of the Islamic Republic at a micro-level.

[ii] Frederic Wehrey, Jerrold D. Green, Brian Nichiporuk, Alireza Nader, Lydia Hansell, Rasool Nafisi and S. R. Bohandy. 2008. The Rise of the Pasdaran: Assessing the Domestic Roles of Iran’s Islamic Revolutionary Guards Corps. RAND Corporation.

[iii] I would like to thank the administrators of the two telegram channels (accounts), Sar Khat and Sedaye Mahi Siah, who have committed themselves to broadcasting news on the economic circumstances and demonstrations of the minorities and working class in Iran.

By Shirin Kamangar

Shirin Kamangar is an activist and academic currently living in Tehran.