Are Iran’s protests Economic or Political?

By Juan Cole | (Informed Comment) | – –

Neoconservative poobah Elliott Abrams slammed the New York Times for headlining an article about the Iran protests as being about the economy. (Abrams was an Iran-Contra fraudster supporting nun-killing right wing death squads in Central America who was convincted of lying to Congress but was rehabilitated by W. Bush, who appointed him to the National Security Council). Abrams insisted that the protests are instead political.

Abrams is a far-right supporter of the far-right Israeli prime minister Netanyahu, and would like nothing more than to see the government of Iran overthrown– not so that its people could have more liberty but in hopes of breaking Iran’s legs as a player in the Israeli-Palestinian conflict (just as Abrams led the charge to break Iraq’s legs). So he isn’t exactly an objective observer of the Iranian scene, not to mention not actually knowing anything serious about, you know, Iran.

But why someone makes a statement and who they are is ultimately not important in judging whether the statement is true or false. As much as it pains me to say so, Abrams could be right in this dispute.

The rallies certainly began as protests against inflation and joblessness. Iran’s economy is set to grow 4% this year, but inflation is at 9%, which means that Iranians will get 5% poorer. Moreover, the clerical ruling class will be held harmless from that decline in real purchasing power. The four percent growth is mainly because of increased petroleum sales now that international sanctions have been lifted, and because oil prices have firmed up to $60 a barrel. The petroleum proceeds go straight to the government, i.e. to the ruling clerics, who head up a range of foundations and businesses that get government subsidies.

Borzou Daragahi has argued that in a bid to be more transparent, President Hassan Rouhani released budget numbers recently that revealed the extent of government support for clerical foundations, angering workers who not only do not get subsidies but who are going to see their real purchasing power drop 5% again this year.

It also appears that the protests began last Thursday with support from hard liners who were hoping to embarrass President Rouhani. The latter had put a lot of political capital behind the nuclear deal with the Security Council, on the grounds that it would end sanctions and improve the economic situation, which had become dire under Obama’s severe sanctions. The joke turned out to be on the hard liners, who started a wave of protests but lost control of them, with crowds chanting not just death to Rouhani (what the hard liners were going for) but death to Khamenei and death to the Revolutionary Guards (the very institutions the hard liners wanted to strengthen).

So for instance, Iranian Labour News Agency reported (via BBC Monitoring) that 80 people were arrested in the central city of Arak for attempting to invade government offices yesterday. So why were they doing that? It isn’t clear. But it could be that they were hoping to capture municipal records showing corruption. A crowd in Tehran broke into a municipal building, according to Afsaran.ir. Although you could say that invading government offices is a political and not a religious act, in fact it would be hard to separate them out.

In Tehran, some 200 protesters have been arrested and at on point this weekend they attempted to march on the private residence of Aytatollah Ali Khamenei, the clerical leader of the country. That march was political, but they may have been making economic demands.

The killings (two dead in Dorud in Lorestan) and jailings of hundreds have themselves become reasons for people to come out to demonstrate. The demonstrations create martyrs, in whose name more demonstrations are held.

President Rouhani took revenge on the hard liners by giving a speech in which he upheld the right of Iranians to demonstrate. He did draw the line at sabotage, however.

One problem with the debate between Abrams and Thomas Erdbrink of the NYT is that separating out economic and political discontents is not easy, especially in Iran, where the government (as in most petro-states) owns some 80% of the economy. I think we may conclude that some voices in some of the protests have begun speaking of overthrowing the government, and the question for many protesters no longer seems to be high priced food but rather the clerical regime itself.

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Related video

Clashes erupt in western Iran town – BBC News

16 Responses

  1. And to no ones surprise the usual suspects chime in….

    “You just can’t tweet here. You have to lay out a plan. If I were President Trump, I’d lay out a plan as to how I would engage the regime. I would tell the Europeans and the Congress and the world that America’s going to withdraw from this agreement unless it’s a better deal, and I’d lay out what a better deal would look like. And I would stand with the Iranian people the entire time.”

    Yes sir. Lindsey Graham only cares about the Iranian people. Such a humanitarian.

    • This is the same Lindsey Graham who knows that Iranians can’t be trusted because he worked in a pool hall when he was a teenager.

  2. It is interesting to note that it was exactly 40 years ago last night when President and Mrs. Carter celebrated New Year’s Eve in Tehran in one of the Shah’s palaces and when President Carter famously described Iran as “an Island of stability”, yet demonstrations started in Tehran shortly afterwards and a year later the Shah’s government was gone. So, things move quickly in Iran and anything is possible as the result of current demonstrations.

    However, it is rich for Elliott Abrams and the rest of the neocons to point a finger at Iran for harsh treatment of demonstrators. They are silent about the daily killing of unarmed Palestinian protestors who only wish to put an end to a brutal occupation. Only last week, a young Palestinian girl slapped an Israeli soldier who was manhandling protestors in a West Bank village. Overnight, heavily armed Israeli soldiers who felt their masculinity and reputation for brutality tarnished as the result of that incident, attacked the home of that girl, beat her up and arrested her and her mother who was protesting and took them for questioning. Education Minister Naftali Bennet told Army Radio on the following day that young women shown assaulting the soldiers “should finish their lives in prison.”

    So, by all means, let us object to the brutality of the Iranian police and call the protests politically motivated, but let us keep a sense of balance, for what they have done so far is minor in comparison with the daily brutality of the Israeli Defense Forces, with the killing of thousands of protestors in Egypt and with the daily killing and maiming of scores of innocent civilians by the Saudis in Yemen, about which the neocons are silent if not actively supportive.

  3. In some states the government owns 80% of the economy. In some states big business owns the government. Not much of a choice is it?

  4. I fear without leadership and organization and with an unscrupulous regime in charge, only people will die and little will change.

  5. I just tried to post a link from Moon of Alabama that seems to add more information to the conversation here. This site flagged the link as spam. So here is a general link to the MofA site. The post related to this topic is at the top and clearly marked.

    link to moonofalabama.org

  6. We just heard Netanyahu hypocritically telling the Iranians that “they deserve better” and “success for their noble quest for freedom”. Neocons And the far right never fail to point fingers at countries they don’t like in their quest for regime change, and yet are willing to do exactly the same monstrosity they accuse others of, on the Palestinians among others, or back similar regimes like the Al-Saud family. How disgustingly hypocritical.

  7. With all due respect to Prof. Cole, from whom I’ve learned a lot, the economic analysis of this piece is dead wrong. (I’m an economist, FWIW.) You don’t simply subtract inflation from growth to determine real changes in purchasing power. If you want to get “real GDP growth” you subtract population growth from GDP growth. If you want to use inflation as a gauge of purchasing power you would have to use some other statistic, say, for instance, the change in the minimum wage (or average wage if that’s available). But inflation by itself doesn’t tell much about the change in the population’s purchasing power. 4% of GDP growth and 9% inflation is not exactly an economic calamity. That inflation level is a bit too high, especially given the anti-inflation hysteria of many policy circles in the last years. But it’s not in itself a huge issue. It is perfectly possible to have a well-functioning economy with those levels of inflation. The one caveat is to avoid it from spiraling, but 9% doesn’t need to be the start of a spiral. Many economies have managed that. The 4% growth isn’t bad either. It’s mediocre, to be sure, especially considering Iran is a Third World country that should be growing more, but it’s not bad either. And, to reiterate, subtracting the inflation rate from the growth rate is just subtracting apples from oranges (or, say, pomegranates in this case).

  8. Just a caveat to my previous comment. There’s one case in which subtracting inflation from GDP growth could be useful and, yes, would confirm Prof. Cole’s assessment: if the reported GDP growth is NOMINAL GDP growth. But I’d be surprised if that’s the case. Nominal GDP growth is a largely useless statistic that most economic agencies know not to puff up. Whenever it’s reported, they immediately report the deflated GDP growth, because they understand that’s the one we should care about. I know nothing about how Iranian economic agencies produce their statistics, or what are Prof. Cole’s sources, but I would be very surprised if they simply reported the nominal GDP growth. If the 4% in the piece is nominal, then my previous comment is wrong. But it would be unusual if the stats agencies just reported that.

  9. The Neo-Cons have had in their sights for years Iraq, Syria, Libya, Iran, and No. Korea (lately, Russia has been added to the mix). In all cases, the American hegemonists want “regime change.” Iraq, Libya, and Syria have been smashed and no longer pose the same perceived threats to Israel they once were seen to do; and it would be foolish to think Iran and No. Korea will escape similar treatment in one form or another. Someone behind the scenes is orchestrating the dismemberment of all Uncle Sam’s and Israel’s perceived enemies — cui bono?

  10. I fear that if the protests and violence increase, the real winners might still be the hardliners who can step in to ‘restore peace and stability” and might even oust the Rouhani government. We can only hope and pray that Trump will keep his fingers off the tweet button which could allow the hardliners to claim the need to protect the country from the US interference, just like 1953.

  11. Would love to hear your thoughts on the narrative that this round of protests will be harder to contain because the bigger demonstrations are found in smaller cities, rather than Iran. Do those arguments carry weight? Are there obstacles preventing the regime from mobilizing its militias and local police to crack down in 2nd and 3rd tier population centers?

  12. I expect things to get dicier. The regime no longer has the excuse of sanctions for Iran’s parlous economy. The clerics can attempt to prop up the status quo by even more military muscle but that end game means the military eventually supplants the Clerics.

    Khamenei has to be closing in on his sell-by date as well. I don’t know if any of his fellow grumpy old men with beards is a clear choice to replace him. The stress of yet another “Green Revolution” has got to be affecting him more than the last go round. With most of his cohorts also in the position of one foot in the grave and the other on a banana peel I do wonder what kind of strains and cracks are being papered over as a new set of elites come to assert dominance.

    At base the challenge of running a theocracy based on the notions put forth in the 12th Century is going to be problematic for a nation operating in the 21st. One can only paper over and patch the contradictions for so long before the whole facade starts looking ragged. Maybe Rouhani understands this and is trying to create a breathing space for modernity in Iran.

    Present economic conditions will continue to work against the Status Quo. No regime can survive the acidic effects of increasing poverty and inflation. Sooner or later core constituencies feel the pinch and desert.

  13. State controls the oil sector where most of the monetary gains have come from, but much less than 89% of economy. Aside from a substantial true, if depressed, private sector, maybe as much as a quarter is owned by the bonyads, the religious foundations, who do get govt subsidies, but are not owned or controlled by the state. For more on this see my Econospeak post on “Does Iran Have A ;Poland Problem’?”

  14. It should also be noted that apparently most of the protestors support the JCPOA but also civilian nuclear power. Supposedly Trump’s credibility with the protestors because of his opposition to the JCPOA. On that matter, he is incoherent.

  15. Is anyone considering and discussing the effects of long term drought and increasing water shortages on farmers and rural populations? The effects of environmental problems often show up as underlying causes for political and economic unrest. In Syria, for example. Would love to know what people (Juan Cole) think about this.

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