- Published: Sunday, 12 August 2018
By INU Staff
INU - The most recent protests to rock several Iranian cities pose an important challenge to Iran’s rulers. The protests are a continuation of the widespread anti-government movement that began in December 2017. The recent protests occurred in small towns and cities, as well as in the urban areas of Tehran, Isfahan, Karaj, Shiraz, Rasht, Khuzestan and Tabriz.
Economic inequality and financial hardship are major grievances, as protesters express anger and outrage over the ongoing financial crisis, the high unemployment rate, shocking inflation, and devaluation of the currency.
Harvard-educated Iranian-American political scientist, Dr. Majid Rafizadeh, expert on Iran and US foreign policy, and president of the International American asks, “But why would a wealthy country like Iran be afflicted with such economic misery?”
He explains, “It is worth noting that Iran is one of the richest countries in the world when it comes to natural resources and commodities. In fact, by having approximately $27.3 trillion in natural resources, Iran is ranked fifth in the world, ahead of China and Australia and only behind Canada, the US, Saudi Arabia and Russia.”
Iran has the world’s second largest gas reserves —approximately one-sixth of the world’s gas reserves with a value of nearly $12 trillion, and the fourth largest oil reserves — nearly one-tenth of the world’s oil reserves worth almost $17 trillion.
In terms of purchasing power parity, Iran is the 18th largest country in the world. The country is also considered the largest car manufacturer in the Middle East.
Goldman Sachs investment banker and economist Jim O’Neill states that with its plentitude of natural resources and commodities, Iran has the potential to become one of the 11 largest economies in the world. Iranian leaders, including President Hassan Rouhani, have acknowledged this statement.
Rouhani promised that as president, he would improve the economy and people’s living standards. The economic situation has deteriorated under his rule. Rouhani is not alone in failing to keep economic promises. The entire regime is based on the concept of making “deceitful economic promises” to its citizens, according to Dr. Majid Rafizadeh.
He cites an example, promises made in 1979, when the founder of the Islamic Republic, Ayatollah Ruhollah Khomeini returned to Tehran from Paris, and said he would bring “oil to the people’s tables,” meaning that the money from the nation’s oil exports would be distributed among the people. He pledged, as well, that no one would pay for water and electricity. The audiotape of Khomeini’s speech was banned after he assumed power.
Dr. Rafizadeh asks another question, “Where is the nation’s wealth?”
There is a significant rich-poor divide in Iran, where no real socio-economic class that can be identified as the “middle class” exists. It appears that the ruling politicians, those connected with them, and the regime’s loyalists are getting richer, while the ordinary people are becoming poorer.
According to Dr. Rafizadeh, “Through nepotism, corruption, connections and illicit financial activities such as insider trading and disruption of the market, some officials and their families and friends have accumulated significant wealth, while millions of ordinary people cannot make ends meet. In fact, after the Iranian regime was granted significant sanctions relief and benefited from a rise in oil exports thanks to the Joint Comprehensive Plan of Action, not only did the Iranian people not experience the fruits of the sanctions’ relief, but their economic situation has become much more severe since 2015. Roughly 35 million Iranians (nearly 40 percent of the population) are currently living under the poverty line.”
With the demonstrations that spread across the country at the turn of the year, and the continuing protests that have followed, Iranian leadership should keep in mind that political authoritarianism may survive longer if there is at least economic liberalizations and equality. With no redistribution of wealth or economic opportunities for ordinary people, the ruling powers may be facing political suicide.