When Iran’s parliamentary speaker said last week that the budget proposal to raise fuel prices wasn’t a panacea, and that another method to increase state revenues was necessary given the country’s dire economic situation, this was not a casual suggestion. Ali Larijani is one of Iran’s leading conservative members and his brother, Sadegh Larijani, heads the judicial system, directly appointed by supreme religious leader Ayatollah Ali Khamenei. Another brother, Mohammad-Javad Larijani, is a physicist and nuclear expert who sometimes carries out diplomatic missions for Khamenei. Despite the conservative progeny (not to mention the religious progeny of being the son of one of Iran’s most important religious scholars, Grand Ayatollah Hashem Amoli), Larijani is seen as a supporter of President Hassan Rohani and serves as a stable and solid anchor for the economic reforms Rohani is pushing.
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However, given the storm raging on the streets of Iran over the new budget, Larijani soon realized this is not the right time to impose more economic austerity measures on a despondent public.
Raising the price of fuel from 23 cents to 35 cents – as proposed in the budget – would be a harsh blow to the lower and middle classes, and nixing the price hike could assuage the protesters. Repealing subsidies for some food products, whose prices have soared, was also discussed in recent days, even though it would mean taking a significant step back from Rohani’s proposed five-year economic plan.
This plan was meant to fix much of the damage left by his predecessor, Mahmoud Ahmadinejad, which had driven Iran into an economic dead-end before the international sanctions were canceled. If Rohani’s first term was dedicated almost entirely to the nuclear agreement with the world powers, his second term cannot expect a 100-day grace period. The public demands reforms now, or at least merciful steps that would demonstrate the regime is at least taking economic difficulties into account.
According to reports from Iran, the demonstrations have lessened in recent days. The commander of the Iranian Revolutionary Guards Corps, Mohammad Ali Jafari, went so far as to declare the whole episode over. However, the red flag the public waved at the regime continues to fly and to pose a threat.
Ostensibly, this was an exceptional protest. It was not led by a political movement or public figures, like the Green Movement protests of 2009. Its origins were economic, not political, despite the calls of “Death to the dictator” aimed at the supreme leader. Most of it occurred outside of Tehran and generally featured people from the lower and middle classes, and it did not make a sharp distinction between reformists and conservatives.
However, demonstrations and protests of this kind happened before in Iran, with government company workers, school teachers and train workers striking or demonstrating on the streets in recent years after their salaries weren’t paid on time or weren’t paid at all.
Historically, Iran was a country of demonstrations and protests well before Reza Shah Pahlavi assumed power in 1925. In 1891, tobacco growers refused to sell tobacco to the British and Persians stopped smoking in protest at the awarding of a tobacco concession to British companies. The tradition of protests peaked in 1979, when masses from all streams and movements (save the shah’s circle) triggered the revolt that shortly became the Islamic Revolution.
The reformists’ dilemma
The protest this time caught both camps in an embarrassing position. Almost five days passed until Khamenei made his first public declaration on the protests, while it was hard for the reformists to identify a single firm position. Mohammad Salamati, a former reformist parliamentarian, called on reformists to continue supporting Rohani, because “the people who renounce him won’t be able to be considered reformists,” thereby undermining the legitimacy of the entire reformist bloc.
Indeed, the reformists’ dilemma is more complicated than that of the conservatives. On the one hand, they are not satisfied by Rohani’s performance thus far – not only on the economic front but also regarding human rights. His promises during both presidential electoral campaigns have yet to be fulfilled. His supporters who backed him with 51 percent of the vote, leaving his rivals far behind, expected him to do more to release the 2009 Green Movement leaders from prison and house arrest. They demand the release of political prisoners and an end to draconian censorship of the media.
However, they also understand the limits of Rohani’s wiggle room. According to unofficial understandings reached between Khamenei and the conservative leadership, Rohani received permission to sign the nuclear deal and to implement economic reforms. But he would not be able to interfere with “the basic principles of the Islamic Revolution,” to introduce new educational content or to move to expand civil and human rights. Therefore, if the reformist bloc desires political life, it cannot attack Rohani – which would play into the conservatives’ hands. But simultaneously, it cannot ignore the public’s demands and in doing so stand alongside the radical elements demanding suppression of the protest by force. The result is the silence that is characterizing their reactions.
However, the conservatives cannot look on from the side and allow the criticism against Rohani to develop without a response, either. Were this an election period, we could assume that the strategy of how to react would be different. But no one is currently thinking of deposing Rohani, especially when the conservatives have no alternative economic plan. Furthermore, they do not want to return to the crazy economic period of Ahmadinejad, who deposited money directly into citizens’ bank accounts.
The conservatives, chief among them Khamenei and the head of the Supreme National Security Council, Ali Shamkhani, have stuck to an unoriginal explanation for the outbreak of demonstrations in order to sidestep this political conundrum. “Iran’s enemies – Saudi Arabia, the United States and Britain – are the ones behind the protests,” Shamkhani said in a television interview. He said that 27 percent of all Twitter accounts that supported the demonstrations originated in Saudi Arabia. As evidence for his claim, he provided tweets by U.S. Secretary of State Rex Tillerson and Defense Secretary James Mattis, who said last October the Iranian regime should be replaced by peaceful means.
And then U.S. President Donald Trump’s tweets landed in Iran, almost on cue, promising to assist the protesters and doing their bit to reinforce the conservatives’ assertion that “foreign agents” interested in deposing the regime and destabilizing the country were behind the protests. Now, they have a name and an address for those claims. At the same time, Trump put the reformists in a bind whereby they had to prove their allegiance to the regime, in order to preserve their public legitimacy and not be deemed traitors and collaborators with the American enemy.
In this regard, it is worth noting that the terms “reformist” and “conservative” are not necessarily two antagonistic polar opposite in Iran. Moreover, a reformist is not pro-American or pro-Western by definition, and not every reformist seeks to change the type of regime Ayatollah Ruhollah Khomeini shaped back in the 1980s. Equally, a conservative does not go out every morning to hunt Western sympathizers or detests Western culture. Some of the conservative leaders studied in the West or researched Western culture – like the parliamentary speaker Ali Larijani, who did his doctorate on the philosophy of Kant.
The gaps between them are narrowed when the state is aflame because of problems that both sides agree stem from failures of governance that predate the birth of the nuclear agreement.
The distinctions between the reformists and conservatives do not particularly concern most Iranians, who struggle to make ends meet on an average paycheck of $270 a month and to send their children to good schools or universities. Most graduates know they can expect to wait a long time, often years, to find a good workplace. Some 800,000 new job seekers will join the labor market this year, and the number of unemployed will grow to 5 million. An estimated 150,000 talented Iranian citizens emigrate annually, creating a dramatic brain drain: Stopping that is vital to rebuilding the local economy.
With the cessation of the demonstrations, the leadership will remain with this powder keg but without any immediate solutions of how to defuse it. Foreign investment in Iran over the two years since the nuclear agreement was signed helped the economy grow 12 percent. But growth this year is expected to be just 3.5 percent – and even less if foreign investors get scared off by the U.S.’ intention to impose additional sanctions on the regime.
The paradox is that a lot of money is already coming into the country, and billions of dollars more are expected when the agreements signed with various foreign corporations and countries are implemented. However, this is money that stays in the state coffers, the pockets of senior officials and, mainly, the Revolutionary Guards Corps, which controls more than half of the Iranian economy. Without restructuring the economic structure, removing deep-seated corruption and ensuring fair pay for workers and the unemployed, the protest will continue to bubble up and spill onto the streets.
In this situation, the question of whether the regime will survive or collapse is irrelevant. Brutal and failing regimes, like the Iranian one, have survived difficult periods, and the Iranian regime also proved to be resistant even to drastic sanctions and millions of demonstrators. Besides, anyone who believes that the fall of the regime would then bring a Utopian democracy is invited to examine what happened to the countries that were part of the Arab Spring.