Members of all factions of the regime are recognizing this fact and are criticizing Rouhani’s government.
Former Minister of Intelligence Mohammadi Reyshahri said, “The implementation of the gasoline price reform in the way it was done was very dangerous and should not have been implemented in this way, despite numerous domestic and foreign enemies.”
The rightness or wrongness of the gasoline price hike that sparked the November uprising is still the most important debate in the economic circles and the government media, as it has created a widespread political and social movement that, besides affecting the economy and society, has led to the collapse of the entire government – a move which is still driving forward.
— NCRI-FAC (@iran_policy) December 4, 2019
But from the economic point of view, the actions taken were not unexpected. The deficit in the state budget for the year 2018 showed at least 120 trillion tomans of deficit that, if not compensated, would lead to the closure of many corrupt and anti-social projects that the government is using for terrorism.
Such a change would lead to the inability of the government to pay its repressive employees and institutions, which would force Rouhani’s government to borrow again from the central bank and increase the liquidity in the society without any change in economic growth.
Liquidity growth would lead to higher commodity prices and inflation automatically.
For many years, the various governments within the regime have followed the same path in their inability to solve the economic problems of the people. Having a resource of oil and overflowing their income has allowed them to hide the instability of Iran’s economy.
Dollar and gold become expensive
The rise of the dollar these days has been accompanied by various economic analysis, despite Rouhani’s “ban on raising prices.”
Some see the rise in prices as bubble growth, and some see it as a nonstop slow growth. All of this, however, reveals the fact that the government has failed to control prices. And although prices might rise and fall, in the end, they will eventually grow.
“On the second day of the week, the dollar went down below 12,500 tomans for a few minutes but returned quickly … At 4 pm on the second day of the week, the dollar was selling on the market for 12,700 tomans, an increase of 180 tomans against the working day.” (Eqtesad News, 2 December)
Again, budget deficit and energy carriers become more expensive
The Iranian regime has long sought to raise the price of gasoline, pushing it back every time in fear of social upheaval until it did so because of the state’s economic suffocation.
Although the regime carried out many propaganda campaigns to say that rich people are mainly affected, the influence on society with lower income was much higher. The main fact that proves this was that the uprisings that took place in the suburbs of Tehran such as Islamshahr, Shahriar, and Qaleh Hassan Khan.
The lives of thousands of people in these areas depend on the price of gasoline and energy carriers.
“Right-sharing service(Snap), personal traveler driving, motorcycle taxis, food distribution and so on, with a very minimalistic overhead estimate over total number of drivers for personal cars and motorcycles, it is possible to claim more than 1.1 million people in the country rely heavily on ‘gasoline‘ for livelihoods; these groups operate either on their own cars or on their own motorcycles, and the majority of them are not eligible for the 1500 tomans gasoline quota after the gasoline price hike.” (state-run ILNA news agency, 2 December).
The Budget of 2020 an inevitably incurable choice
“The details of the targeted sources of subsidies in the budget bill show that the government is trying to reduce energy carrier subsidies to the point where experts and executives at the Planning and Budgeting Organization think it would be tolerated,” the Sharq daily wrote.
“This probably means the price raise some of the carriers that we have seen earlier in the implementation of the petrol quota and witnesses the increase in their rate.” (Sharq, 3 December 2019)
The fact that the government is constantly turning to energy carriers shows that it has no other choice because of bad economic conditions and lack of a reliable source of income.
The government failed to achieve its predetermined goals in this area, despite the fact that 30% of the budget relied on taxes. Tax breaks for marketers, large economic foundations such as Astan Quds, the Revolutionary Guard’s Khatam Base, and the Mostazafin Foundation, military institutions, and various Islamic propaganda organizations have effectively closed the path to monetization for the government.
Therefore, the Rouhani government, unable to meet its revenue needs, will further exert pressure on the poor.
The worn-out machine of the economic system is based on a corrupt and repressive political system that, during its 40-year reign, has pushed the majority of the Iranian people to the poverty line, and there is no way out for them.
— IranNewsUpdate (@IranNewsUpdate1) November 29, 2019
The November uprising made this clear. Thus, on the horizon of social change, there will undoubtedly be continued uprisings, until a fundamental change is accomplished.