Amid Spiraling Protests, Iran Puts Faith in the Nuke Deal to Stave Off Discontent

A revived nuclear accord could provide some timely respite for Iran's new leadership, but it is no panacea to the long-standing corruption and economic woes driving the desperation among ordinary people

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A portrait of Ebrahim Raisi during a celebratory rally for his presidential election victory in Tehran, last month.
A portrait of Ebrahim Raisi during a celebratory rally for his presidential election victory in Tehran, last month.Credit: Majid Asgaripour/WANA (West Asia News Agency) via Reuters
A photo of Dr. Zvi Bar'el.
Zvi Bar'el

Last week, on Tuesday evening, a coronavirus lockdown went into effect in Iran’s capital and the northern province of Alborz. On the government’s orders, all state institutions, banks, schools and public centers are to be closed until July 25, and traveling between cities is forbidden. It is a necessary precaution ahead of Eid al-Adha, the Islamic Festival of the Sacrifice, and after over 85,000 people (according to official statistics) died of COVID-19 out of the 6 million people infected. However, as in Israel, imposing a lockdown is the easy part; organizing for it is another story.

Thousands of Iranians rushing home for the holiday got caught in traffic jams on the intercity roads. Metro passengers in Tehran were surprised to find fewer trains arriving, and that those responsible had not posted the new timetable for the lockdown. It was a sufficient reason for thousands of passengers to hold spontaneous protests in metro stations, denouncing the regime and its supreme leader.

These were not the only protests in Iran lately. For about a week now, thousands have taken to the streets in Khuzestan Province to protest against the regime’s failure to provide them with water during the worst drought the country has seen in 50 years. It’s not just water for drinking and irrigation that’s scarce; some hydroelectric power plants stopped operating because of the drought, causing power outages and shutting down public services.

If that weren’t enough, thousands of contract workers at the country’s oil facilities who are not employed by the National Iranian Oil Company demanded pay raises and other benefits in raging protests about a month ago. The company’s workers earn triple the contract workers’ pay, and they get 10 days off a month to visit relatives, compared to two-and-a-half for contract workers.

At the same time, hundreds of farmers protested against water shortages and rising costs by spilling thousands of liters of milk and tonnes of agricultural products on the streets in front of government offices. Iranian media, closely supervised by the regime, may not have reported on these demonstrations but videos on social media show violent confrontations between police and protesters.

Public protests in Iran, and their violent suppression, are part of the political culture. The prevailing assumption is the sectoral protests don’t threaten regime stability. Still, such working assumptions in the Middle East endure for years, until one fine day they are turned on their heads. In fact, it was mass demonstrations by workers who had nothing left to lose the marked the beginning of the end of the Shah, and paved the way for the Islamic revolution.

Historic mismanagement, continued

Rebuilding Iran’s crumbling economy is the main mission with which Supreme Leader Ali Khamenei tasked President-elect Ebrahim Raisi when he takes office on August 3. But Raisi is no expert on economics or running a country, and there are even doubts over the level of his religious education.

Although his recent appointment of five economic advisors, who are expected to receive economic portfolios in his government, could rectify this shortcoming, their track records are cause for concern. Three of them were ministers in Mahmoud Ahmadinejad’s government, which wasted about half of Iran’s oil revenue - some $700 billion - over the eight-year presidency. Some of them zealously support a centralized economy and oppose a free market, and enjoy the support of the Revolutionary Guards, who are expected to scuttle any attempt at economic reforms that would endanger their control over most of the Iranian economy.

The situation in the interim is not bright either. While the Iranian parliament did approve a $117 billion budget for the current fiscal year, starting in March, half of it is debt-funded and based on projected income that is wishful thinking. The government is borrowing billions of dollars from pension funds to bankroll its day-to-day operations, to the point that it will struggle to meet its obligations to its pensioners. Simultaneously, it is transferring funds to the emergency fund, or future fund, which was once overflowing with revenues from oil exports. The goal of this “holy fund” is to ensure state survival in times when oil revenues are not flowing so freely.

The endemic administrative flaws, corruption, monopolies and yawning gaps between the top 0.1 percent and the rest are not the result of international and American sanctions. They characterized Iran when it arose as a modern nation under Reza Shah Pahlavi. Sanctions mainly hit the middle class, most of whom sank below the poverty line, and enriched the elite who knew how to profit from the distress of civilians.

Outgoing president Hassan Rohani boasted that the new president’s work will be easier because he receives a country in order, which prepared itself well to deal with sanctions. At the same time, Khamenei continues to market the “resistance economy,” a thinly veiled metaphor for belt-tightening. Both ultimately know the truth: Khamenei is lined with billions of dollars deposited in anonymous, unsupervised and unreported accounts, and Rohani is familiar with the ubiquitous machine of corruption.

Rohani’s election to his first term in 2013 brought tidings of an imminent war on corruption. Now, it seems he is bequeathing this war on Raisi, the man responsible for, among other things, the murder of thousands of political prisoners.

Khamenei and Raisi know that the way out of the economic impasse runs through the signing of the new nuclear accord, which would get rid of the U.S. sanctions. The National Security Council, the most important authoritative body in Iran, rejected last Tuesday the draft accord formulated between the Iranian team and the teams of the powers negotiating in Vienna since April, but the final decision is Khamenei's.

Iran's President Hassan Rohani attending a cabinet meeting in the capital Tehran.Credit: AFP

Meanwhile, the wait for Raisi to assume office is delaying the seventh round of negotiations, and consequently the accord’s signing. However, if we judge by Iran’s behavior so far and by its preparations for the lifting of sanctions, including increasing oil production in expectation that markets will reopen to Iran, we can presume that it doesn’t intend on going back from what it has achieved to date and withdraw from the negotiations.

In its three years before the United States' withdrawl, the original accord didn't translate into material improvements for most ordinary Iranians. They rightfully fear a rerun - the leadership, for the Revolutionary Guards and the monopoly owners will gain long before the money trickles down to the middle class and poor.

The government is not blind to the profound lack of faith in the regime, as expressed in the low participation rate in the presidential election and in the thousands of requests by educated young people to leave Iran for Europe. Nevertheless, the mutual dependence of government figures on one another, and the need to buy political stability to protect their ways, make remote the chance that the new nuclear accord will foster contentment among Iranians.

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