Iran: It's The Economy Stupid

IRAN

It’s the Economy, Stupid

In Iran, the new year brought tidings of insecurity for the nation’s theocratic elite, as thousands took to the streets in protests that lasted several days, killed dozens and presented the most significant threat to the country’s Islamic hierarchy in almost a decade.

But this newest wave of dissent isn’t like the violent protests that shook Iran in 2009. Then, the nation’s educated urbanites called for liberal political reforms after the re-election of hardliner President Mahmoud Ahmadinejad.

This time around, it’s all about the economy, the Atlantic wrote.

Despite promises by current President Hassan Rouhani – a moderate by Iranian standards – that the 2015 nuclear deal with the United States and other global powers would usher in an era of renewed prosperity, the Iranian economy is still in a severe slump, NBC News reported.

Consumer spending is tanking while inflation continues to rise. Meanwhile, overall unemployment remains at almost 13 percent. And the figure is almost 40 percent among the nation’s 15- to 24-year-olds, the Guardian reported.

Corruption in Iran remains rampant, with the paramilitary Revolutionary Guard controlling around a third of the economy, the Associated Press reported. And while income from Iran’s enviable oil reserves has made a comeback since the height of the nation’s recession in 2012, funds continue to flow to the Islamic clergy and are used to fund the nation’s many proxy wars around the region.

Normal Iranians, meanwhile, have been burdened by heightened living costs and now face the prospect of 50-percent increases in domestic fuel prices, Euronews reported.

Such problems have only exacerbated the divide between the haves and have-nots in a nation where 40 percent of the population lives below the poverty line, writes Shahram Khosravi in the New York Times. Citizens lament being out of work and ignored by the global community, while Maseratis and Porsches can be found lining the streets of Tehran’s upscale neighborhoods.

In that context, many are calling for Western nations to bolster their economic relationships with Iran.

Countries that already have healthy trade relationships with the Islamic republic – such as China, Germany, India, Japan and Turkey – could reap economic and political benefits from a healthier Iranian economy, especially considering that increased wealth among the Iranian people at large could beget a more secular regime, CNBC reports.

But don’t count on that anytime soon, the Atlantic reported.

While the New Year’s protests were a shock to the system, they failed to mobilize the nation’s middle class, the only benefactor of liberal economic practices that came with the 2015 nuclear deal.

Urban middle-class Iranians are largely thought to be the true catalyst of change in the Islamic republic. Rural Iranians, on the other hand, have normally supported theocratic rule.

Until the interests of young and old, rich and poor, unite, not much is expected to change.