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Iran Protests: It’s not about Gas Prices

Iran is a different country today than it was just two weeks ago. An overnight tripling of gas prices precipitated an avalanche of protests, unprecedented in the country’s modern history. Protesters in cities nationwide have torched hundreds of banks, as well as the offices of Friday prayer imams, police stations, and seminaries. Gas stations were initially popular targets, but not anymore. The regime has disconnected the internet across the country. Some reports from the inside suggest that soldiers performing mandatory military service were forbidden from contacting their families, and were mobilized to confront the protesters as law enforcement and career service-members struggled unsuccessfully to re-establish order. The number of killed protestors might be as high as 500.

Over the past ten years, gas prices have risen 30 times as the government has cut subsidies in Iranian currency. The currency’s value, during the same period, has dropped 12 times against the U.S. Dollar. The youth unemployment rate stands at 30 percent, to which we must add those who have left the labor force in despair of finding employment. Real annual GDP growth has frequently been negative, except for 2016 when Iran’s frozen assets, worth a quarter of Iran’s GDP, were released following the JCPOA (Joint Comprehensive Plan of Action), better known as the Iran nuclear deal. Some estimates suggest that, by the end of this year, it might reach minus 10 percent.

Amidst these catastrophic trends, the regime has significantly increased the budget for the Islamic Revolutionary Guard Corps (IRGC ), escalated its military involvement in Syria and Iraq, and increased support for its network of proxy militias, chief among which are the Houthis in Yemen, Hezbollah in Lebanon, and Hamas in the Gaza Strip. In addition to which, this year’s budget included a significant increase in appropriations for religious foundations and the IRGC. In summary, the regime is starving citizens to support its hegemonic aspirations, buy friends, and fill the pockets of the clerical elites.

Two and a half years ago, the regime’s fortunes looked very different. President Hassan Rouhani had successfully reinvented himself as a “reformist,” and was running for a second term. His predecessor, Mahmoud Ahmadinejad, was a viciously anti-American and antisemitic religious fanatic, even by the advanced standards of the Iranian regime. During Ahmadinejad’s tenure, pursuit of the country’s nuclear program had isolated Iran, and Rouhani had been elected on a platform of restoring social policies of the pre-Ahmadinejad era and reaching a nuclear deal that would lift sanctions. He had managed to deliver on the second of these pledges. The first remained unfulfilled. Nevertheless, celebrations greeted Rouhani’s 2017 landslide victory (against an opponent who was even more fanatical than Ahmadinejad, and who had overseen the mass executions of political prisoners in 1988). Young men and women poured into the streets and began dancing in public. Rouhani and Javad Zarif, his minister of foreign affairs responsible for negotiating the JCPOA, were the most popular people in Iran.

It would only take seven months for a widespread uprising to begin—protesters were perhaps not quite as numerous as during the 2009 Green Movement, but the violence of the unrest and the number of cities involved surpassed it. Within just a few months, Rouhani and Zarif were no longer national heroes, they were villains. Two years after the JCPOA had been signed, the prosperity Iranians had been promised had not arrived and the people were poorer. The money released by the nuclear deal had been used to control inflation, but it hadn’t generated growth in incomes. What finally triggered the protests was an announcement of the upcoming year’s budget (the Iranian calendar begins in March), which revealed a significant increase in appropriations for the IRGC and the clerical class. Four and a half years of Rouhani’s rule, the release of frozen assets, and the lifting of sanctions had done very little to change the everyday lives of the citizens. The conclusion for Iranians was that hardliners, moderates, and reformists were no different, and sanctions were not the problem. The problem is the entirety of the regime.

The protests went on for a few weeks, until the regime successfully repressed them with a violent crackdown, but economic conditions only worsened. Small and sporadic demonstrations continued over the next two years, until last week, when the government raised the price of gas. The price of the first 15 gallons, essentially a single full tank, increased by 50 percent. Beyond that, the price increased by 300 percent. This is not the first time the government has significantly raised the price of gas. 13 years ago, a two-tier price system was implemented for the first time, and the subsidized price rose by 25 percent, while the unsubsidized price rose by 500 percent. Naturally, the public reaction was negative, but no public protests erupted, which indicates that the unrest this time around is not caused by the gas price hike—that was simply the trigger that released much deeper grievances.

This is not something that the Iranian regime’s Western defenders and apologists would like you to believe. The National Iranian American Council (NIAC) is an advocacy group that was close to the Obama administration and which lobbies for the interests of the Islamic Republic. Its founder and former president Trita Parsi and senior research analyst Sina Toossi have both vehemently attacked the Trump administration for re-imposing sanctions against Iran, and claimed that this is the chief cause of the country’s economic turmoil. Negar Mortazavi, a correspondent for the Independent and an analyst for BBC and Al-Jazeera, has adopted a similar line.

But the truth is more complicated. There is no question that the sanctions have been hurting Iran’s economy, but they are not the primary factor. Two years ago, when the protests broke out, the United States was still a party to the JCPOA, and sanctions had been lifted. In 2018, Iran faced an inflation crisis. At the peak of the crisis, the annual inflation rate reached three digits, which prompted Johns Hopkins University and Cato Institute economist Steve Hanke to move Iran up to number three on his misery index. At the time, the United States had set a withdrawal date from the JCPOA but had not yet withdrawn.

Amidst spiraling economic turmoil, the regime has refused to scale back its foreign policy adventurism.

Already a dry country, decades of water policy mismanagement have led to related environmental crises, declining agricultural industry, and shortages of drinking water; during the hot summers, tap water is regularly disconnected, often for several hours. This, however, has not prevented Iran from exporting water to Iraq in exchange for influence. A water pipeline to Iraq, discovered in southern Iran, created a wave of national anger earlier this year. Last year, despite the country’s severe economic challenges, Iran’s military spending rose to 4.4 percent of its GDP, outstripping the United States’ military budget, which accounts for 3.6 percent.

Moreover, the Iranian people themselves are demonstrating that the United States is not their target. In a country once infamous for its “Death to America!” rallies, protestors now chant “Death to the Dictator!” and “Death to Khamenei!” (the supreme leader of the Islamic Republic) and “No to Gaza! No to Lebanon! My life [only] for Iran!” On November 18, a brave young woman tore down a “Down with USA” poster, to cheers and applause from the assembled crowd of anti-regime protesters.

Some have suggested that the protests are a product of economic anxiety and not by nature anti-regime. This, too, is incorrect. Gas stations were the protesters’ initial targets, but they soon moved on to attacking and torching police stations, posters of Ayatollahs Khamenei and Khomeini (the regime’s founder), seminaries, and offices of imams—Friday prayer imams enjoy immense political influence in their cities and regions, which includes control of the local Basij militia units and occasionally other forms of armed forces.

Iran’s economy is a combination of centralized communism and kleptocracy. All major corporations in Iran are controlled either by the IRGC or senior leaders of the regime, and oil, the country’s most important industry, is nationalized. The same applies to the telecom industry and several others. Corrupt politics does not allow for growth. Often, small business owners opt not to expand their businesses, fearing it will be seized by the regime. Major contracting projects, meanwhile, are auctioned to allies of the regime. The character of the Iranian economic system made its failure inevitable. American sanctions only accelerated the decline.

Until last week, the internet was almost completely shut down. NetBlocks, which maps internet usage, reports that current usage in Iran was five percent of the normal rate. This small percentage was mostly limited to senior government officials, regime allies, and those few Iranians with access to a satellite connection. This made it incredibly difficult to send and receive information; nothing came out and nothing went in. What little news and footage did get out was transmitted using SMS, MMS, and by those with access to satellite internet. Emerging reports of what is happening in Iran are, consequently, very difficult to confirm.

During the Green Movement, the regime imported foreign fighters from Lebanon. This seems to have happened again in some cities—it has been reported that Afghan Fatemiyoun Brigade was deployed to Karaj near Tehran, out of fear that law enforcement units might be reluctant to use force or may even join the protesters. Elements within the domestic security apparatus have been sending anonymous messages of solidarity with the protesters. Artesh (the national military) and the police are sympathetic to the people. The IRGC’s position is more complicated—while many of its members are true believers, others joined because it is the only institution that can offer stable employment and good benefits. Now the regime is having to reinforce its domestic security services with foreign militias, at a time when it cannot afford to offer much in compensation given its empty treasury.

For now, the regime has mostly succeeded in cracking down the protests through the use of violence. Internet connectivity has risen to 64 percent of the normal time. Yet, challenges remain ahead. The economic damage caused by the protests will further deteriorate people’s economic conditions, most likely making real GDP growth rate fall significantly below earlier forecasts. The violent crackdown, the death toll, and the disconnecting of the Internet, have increased the resentment against the regime and turned people even more against it. It is difficult to see a future in Iran without even more widespread and violent protests.

The Islamic Republic offers a reminder of John F. Kennedy’s observation that “those who make peaceful revolutions impossible will make violent revolutions inevitable.” Totalitarian and ideological regimes always make violent revolutions inevitable.

 

Shay Khatiri is an MA Student of Strategic Studies at Johns Hopkins University, Paul H. Nitze School of Advanced International Studies (SAIS). Follow him on Twitter @ShayKhatiri

Photo: Iranian Protests as shown on Fars News, 18 November 2019

Comments

  1. From the author’s Twitter profile: “Writer; Advocate for A Moral American Hegemony”.

    Current top tweet, made an hour ago as of this writing: “This Thanksgiving, I am grateful that George Bush was President when 9/11 happened and not Donald Trump.”

    Scrolling through his essays at TheBulwark.com: “giving aid to Ukraine is putting America first”; Tulsi Gabbard is bad.

    So, a democracy warrior. America must convert every other society on Earth to a democracy, and any American politician who expresses qualms about this agenda is the domestic enemy.

    As for this essay about Iran, I will just say that he downplays the role of Trump’s sanctions in creating renewed political havoc in Iran, but of course they are the central reason.

  2. Thank you for the article, great news about Iran!

  3. Is Trump spending less money in Afghanistan (through all channels) than Obama did?

  4. And your point is?

    The post WWII US was very interventionist, a position that was significant transformation from public opinion prior to that war, especially if considering the Republican party. It appears the US is now gravitating back to historical norms and appears less likely to engage in another questionable war. I believe this current administration is not of the same neocon interventionist bent as the former Republican president and the two recent Republican presidential nominees. While it is the latter point that I wished to make, I was comparing Trump with prior Republicans and not Obama, I do however bow to your enthusiasm and ability to quibble.

  5. Thanks for the reply. I definitely think it is not great that protesters are being killed and that the Iranian people are being squeezed economically. However, what was described here were promising signs that Iranians have seen through the regime’s BS and have had just about enough of it. Certainly Islam is entrenched in Iran, but the radical, hyper-conservative Islam is a relatively recent development. There are still people alive in Iran who remember wearing knee-length skirts in public. I don’t think Iranians are generally religiously devoted to the regime, and can separate out a more relaxed version of Islam from the burning wreckage. I want to celebrate and support any signs that they’re moving towards that, even if it takes 70 years to finally get there.

  6. I think the writer underestimates Donald Trump. The sanctions have had an effect. Trump is not going to get the US involved in a war with Iran, he’s basically an isolationist. I am trying to see this fellow objectively. He’s gross, ill mannered, obnoxious, yet behind that he’s very very practical. He doesn’t want the USA involved in any stupid foreign wars. I hate his environmental policies (and lack thereof) but the US economy is booming. Iran is in turmoil, and it has always been a brutal place. Even after the revolution of 79, Iran’s brutal war with Iraq killed thousands of young men for nothing, and Iran still is involved all over the middle east trying to export its brand of Islam and influence. I feel for the revolutionaries, they are up against it. I believe that the sanctions are the main cause of these protests, combined with the urban youth underground which has always been against the stifling religious oppression in that country.

  7. Pretty much my take on the guy. And all of his overwrought drama queen haters hate him even more for being successful. Team Blue now have war boners. If Trump had war boners, Team Blue would be isolationists.

  8. Today’s reactionaries are the left.

  9. Obama made a deal that was by all rights a treaty and did it without congressional approval. The betrayal was his; Trump simply undid it.

    And it was truly a terrible, horrible deal.

    What of America’s credibility to ISIS? Obama pulled out of Iraq, then retreated from his own red line. Pretty sure any desire for real peace that Iran’s leaders have (hint: they have none) was gone before Trump took office.

  10. Trump hates multilateral treaties, because they have weak enforcement mechanisms- punishing a party for violating the terms in the real world, can often lead to penalties by other signatories- in this he is completely right.

    He is bloody wrong about https://www.nice.org.uk/ and our collective ability to negotiate drug prices. As a sovereign nation, why should we be subject to the pricing gouging of American Pharmaceuticals? If the American drug companies want to refuse our pricing structures, they are perfectly free to do so. After all, civil litigation in the UK sector against Pharmaceuticals is a pittance by comparison to the US torte system. And whilst the American system may produce 70% of the worlds new drugs, our contribution is around 13%, which is equivalent given population sizes, and especially when one considers that our tend to be new drugs, rather than dubiously overpriced renewals of existing patents.

    Plus, by allowing the DeepMind sale to Alphabet to go through:

    our government has effectively given American Drug Companies an incredible edge in data mining our citizens confidential medical information, for avenues of potential future research. It also serves American interests in the race for AI.

    On a more concillatory note, British opt-in drug trials for new medicines could provide an alternative route to market, to the incredibly cost burdensome route of seeking FDA approval. With big data and AI, it could potentially save lives, limit liability, and make medical research far more efficient and less risky. If the role of NICE were expanded rather than simply overidden, then it would effectively draw to an end the spurious lawsuits of plaintiffs lawyers in the US- imagine the inherent credibility of an educated British accent during the discovery phase of a lawsuit, coming from a neutral, non-profit, scientific body. It could cut civil proceedings against US drug companies by up to 90%, decreasing the insurance costs of real Americans by significant amounts. Any trade deal could inherently favour defendants lawyers over plaintiffs, is ambulance chasers wouldn’t be given access to the summary of the data. Plus, you should have reformed the bloody ridiculous element of punitive damages in your system decades ago, under Reagan, given that damages ALWAYS GET PASSED ON TO THE CUSTOMER- and almost never substantially damage the defendants long-term PM’s (although bad PR can damage share prices in the short-term). Quietly, behind the scenes, drug interactions and harmful side effects could be screened out, before they ever reached widespread usage.

    But as ever, your negotiators want to play hard-ball and pursue a testosterone-fuelled agenda so that they can brag to their buddies, and enhance their personal reputation, at the expense of their nation’s interest. It’s not a zero-sum game and co-operation, rather than competition, should be the order of the day, between long-term allies. Plus, dismantling NICE is based on a faulty premise- because whilst you may succeed in screwing over your “Distant cousins separated by a common language”, the rest of the world will simply elect the EU, to produce a pricing catalogue to force American Companies to charge less- which could potentially lead to greater collective bargaining power, against American Interests. Meanwhile, you will have only succeeded in damaging your long-term military strategic interests, by pushing Britain towards socialism, with huge swathes of the British public, defecting to Corbyn in the election after the December vote, and pushing an already ambiguous EU into the arms of China. With China’s banking system already geared to create allies in developing areas like Africa, America will find it’s voice increasingly ignored on the world stage. How does that serve American interests?

  11. Your government did that to you?! colour me shocked

  12. Yes, as opposed to military action that would cause American bombs to fall on Iranian children. This is a very odious regime that is teetering on the edge of an organic revolution. We should encourage the resistance. I don’t think the “people” are our enemies. Their leadership is.

  13. Shall I help you get your own life in order, by preventing you from buying what you want, until you make those lifestyle changes you’ve been putting off?

    This idea that sanctions on Iran are economic “tough love” for the country’s own political good sounds rather dubious. Better to confront the fact that western opposition to the Iranian political system is more about support for Israel and Saudi Arabia.

  14. Take your foot off the gas… If the choice is between sanctions and military action i.e. drone strikes and bombing I am all for sanctions. Now back to the original point; people get the government they deserve. The Iranian people deserve better and seem to be agitating for it.

    Let me close with a true story. I was called up for military service in Iraq in 2004. I was a member of a convoy security element in the U.S Navy’s Civil Engineering Corps. We spent most of our deployment in the south of the country with a base near An Najaf. We spent many days on the roads between Karbala and the Iranian border. Since the Iran-Iraq war had sealed that border for a generation many Iranian Shia pilgrims had been denied access to the holy sites in the south of Iraq. After the U.S intervention the roads were clogged with Iranian pilgrims. Many of these people spoke English, were very civil towards our troops and asked us more than once when we would get around to liberating them too.

    I think it is time for us to help facilitate that liberation. Making things difficult for the people who then sensibly direct their rage against a regime who would squander that nation’s wealth on terrorism and nuclear weapons instead of following norms of behavior for civilized nations seems sensible to me. But then I have seen bombed cities and dead children. I did not like it much.

  15. Y, you’re trying to convince a libertarian that sin taxes are good?

    Wow, good luck with that.

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