Suppression at a time of Plea – What is really happening in Iran

 

"Those who damage public property, disrupt order and break the law must be responsible for their behavior and pay the price," Abdolreza Rahmani-Fazli (Iran's interior minister). "The spreading of violence, fear and terror will definitely be confronted." As Iran’s Interior Minister talks tough and cracks down on the voices on the ground one would like to understand why the moderate government of President Hasan Rouhani not listening?

Unlike the 2009 protests which was about the Iranian Presidential election results, the present December 2017 protests in Iran are about lack of jobs, youth unemployment, rise in cost of living, rising in cost of basis goods. A recent BBC Persian service survey found that Iranians have become 15% poorer in the last 10 years. So why hasn’t the Iranian President, his Ministers and the Iranian Supreme Leader, aware of such issues from years back have been a silent observer.

Background

Unlike most countries with sanctions and with the present business climate in the region, Iran has fared relatively well. It ranked 6th in attracting foreign investments (Tehran Times, January 23, 2012). Although unofficial sources say working conditions are amongst the bottom 25% in world labor index.

With significant advances in science, technology and medicine, in the last two decades the university registration specifically in Science and Technology (a cultural icon of Persia as the vanguard of Science and Mathematics education from centuries past) has gone up twenty times (Andy Coghlan, "Iran is top of the world in science growth" New Scientist. Retrieved 2 April 2016). This however has not translated to a robust work force or improving unemployment in this industry.

Before 2009, foreign investment has been relatively average as some sectors like that of oil and gas industries, vehicle manufacture, copper mining, petrochemicals, foods, pharmaceuticals and tourism were active. After Tehran signed the Joint Comprehensive Plan of Action with world powers on July 2015 and implemented it in January 2016 one of the bigger companies to invest in Iran has been Nestle.

“When it comes to Iran, this country is, I would say, a special market for us with considerable opportunities. We have here an 80 million population who have a lot of interest in premium-quality food. Iranians look for variety, which is what we can deliver,” Nestle’s Qazvin Factory Manager Faisal Haroon told Financial Tribune. A further $150M investment is projected in 2018.

Why Investment hasn’t helped

“Navigating the country's legal and regulatory regime is like walking in a minefield” says Amir Paivar of BBC Persian Reporter. Corruption is a larger problem in Iran than most would like to admit. For instance, obtaining any form of permits without "extra payments" is nearly impossible for the simple process of setting up any kind of a business channel to start.

Sanctions were only a small part of the problem in Iran’s economy as formal trade and most profitably black-market channels functioned relatively all too well because the time frame of such penalties imposed on Tehran had existed far too long. The harsher version of reality is Iranian economy is a controlled economy. “The extent of the Revolutionary Guards' control over the Iranian economy is ­apparent as soon as you enter the country” says Julian Borger of the Guardian (The Guardian,15 February, 2010). The joke amongst business circles in Iran is that if you don’t factor in the Revolutionary Guards (IRGC) stake within your business model; your business model is perilous. "The IRGC is really a corporation. It is a business conglomerate with guns," says Ali Ansari, an Iran expert at St Andrews University. Utilizing the frameworks of Limited Liability Company (LLC) and Independent contractors, the IRGC operates as the Iranian version of Northrup Grumman. However, many of the beneficiaries are not owned by IRGC, rather in a corp-to-corp setup (a very dark method of hiding true owners and stakeholders). Nevertheless, the IRGC is active in construction business, oil and gas, import-export, and telecommunications. "If you want to get things to and from Iran without paying excise duty, they are the people to go to," said Meir Javedanfar, an Iranian-Israeli analyst. "No big businessman in Iran is truly independent of them or the government."    

The Real Reason

Though these peaceful protests in several cities in Iran erupted out of economic reasons there is a political side to it as well. Since 2011 Iranians have seen their government take a more active role in their foreign policy in Iraq, Syria and Yemen rather than address the more pressing economic problems at home. This was especially true in the chanted demonstrations recently in Tehran “leave Syria, think about us”. According to the United Nations envoy to Syria, Staffan de Mistura, the Iranian government spends at least $6 billion annually on maintaining Assad's government. The larger message however is to Ayatollah Khamenei, to pay attention to the future challenges of the University youth and for the average Iranians who at the very basic level are suffering and cannot provide for their families. Realistically the forces like that of the Basij militia force will suppress these protests in what possibly would be the most barbaric repression since the Arab uprisings of 2011, but the seeds of discontent have been growing now for a very long time. To take no notice of it would be premature for the sole reason that the beginning of unfolded events that overthrew the Shah of Iran and Savvak in 1979 was relatively no different from what we are seeing today with exception to leadership, an iconic leadership like that of Imam Khomeini.