Is Iran on the brink of a social crisis?
Is Iran on the brink of a social crisis?
Economic crisis and a sharp decrease in the national currency’s value in Iran have sparked small but numerous livelihood and professional protests across the country. These protests reveal signs of a new wave of public dissatisfaction forming in Iran.
While people are experiencing frequent power outages, widespread shutdowns, air pollution, rising dollar rates, and inflation, the government of Masoud Pezeshkian has been unable to solve the livelihood crises, and there is no clear prospect for lifting international sanctions.
The scope of multiple crises in Iran’s economy has become so wide that even some political officials within the government are warning about the social consequences and the emergence of new protests. A member of parliament has, for the first time, reported the possibility of famine in Iran.
The continuation of this situation, where signs of the cancellation of agreements with the U.S. have appeared in statements by officials of the Islamic Republic, has reduced the likelihood of any changes in Iran’s economic and political conditions.
For this reason, some speculate that if economic problems persist, current protests may grow larger. Ebrahim Azizi, head of the National Security Commission in parliament, has stated that if correct decisions are not made, serious effects and concerns will arise.
Economic experts have been warning for months that the government’s inefficiency in resolving crises has put Iranian society on the brink of disaster. Protests against inflation and rising currency rates to student and professional protests in recent days are signs of society’s inclination to start a new wave of public protests.
Public protests from Tehran’s market to the streets of Dehdasht.
In mid-February, the dollar rate reached a historic high of 94,000 tomans, creating a new wave of price increases in various markets.
In a situation where the severe fluctuations in currency rates in February caused disruptions in economic and production activities, a group of Tehran market traders and major food distributors gathered on February 5 in response to the price hikes. Some dissatisfied traders, in addition to protesting the rising currency rates, also demanded the abolition of value-added tax on food items.
A few days later, on the night of February 10, images of anti-government protests in Dehdasht were published, where protesters repeated the overthrow slogans of the nationwide protests of 2022.
Simultaneously with these protests, professional and student gatherings have also intensified in Iran. On February 17, some of the medical staff at Milad Hospital in Tehran went on strike and held a three-day protest to achieve their livelihood demands. A group of retirees from the steel and mining industries also gathered in Isfahan.
On February 12, oil and gas industry workers in Bushehr, steel industry workers in Gilan, and housing investors in Qazvin also held protest gatherings. In recent days, several other professional gatherings have been held in the provinces of Khuzestan and Kermanshah.
Recent public protests are not limited to livelihood issues. The accident of a student tour bus overturning in Kerman, which left six dead, along with the death of Amir Mohammad Khalqi, a 19-year-old student from Tehran University in a mugging incident, has angered public opinion to the extent that traces of it were also evident in some professional gatherings in Kermanshah. Retirees in Kermanshah, while presenting their livelihood demands, reacted to the incidents in Tehran and Kerman with the slogan ‘From Kerman to Tehran, the murder of our children.’
A group of Tehran University students, along with several student organizations, have held several protest gatherings in recent days.
Public anger in the shadow of government inaction.
What has linked the protests of various groups in Iran is their agreement that the root of all problems lies in the government’s inefficiency in solving issues. This is something that is no longer hidden from anyone, not even Masoud Pezeshkian, the President of Iran, as he has responded to public dissatisfaction with the economic situation by saying that part of the price hikes is out of our control.
The sharp increase in the dollar’s value has led to rising prices and intensified livelihood tensions. Pezeshkian, facing increasing economic and social pressures, has not presented a specific plan to transition out of this situation.
In his first reaction to the rising dollar rate, he said that experts should sit down and find a solution. The parliament also summoned the government’s economic team on February 19 to make decisions in a closed session to combat the rising dollar rate, but no specific policy was presented to resolve this situation by the end of the session.
Dimensions of the new inflation wave.
Disruptions in the supply process and rising food prices have been among the most tangible consequences of the rising dollar rate in recent months. Salman Zaker, a member of the Parliament’s Industry Commission, told Rokna News Agency that with ongoing imbalances, if the situation continues as it is, we should expect famine.
In recent weeks, the price of some food items like potatoes has increased significantly. Domestic media reports show that the price of rice, which was 100,000 tomans per kilo a few months ago, has risen to as much as 200,000 tomans following currency shocks.
These reports also point to the sharp increase in the price of meat, legumes, eggs, and other essential household items.
Frequent shutdowns and power outages in production companies have also disrupted the supply and production processes, exacerbating the crisis.
Many shopkeepers in Iran are protesting against the restriction of working hours and forced shop closures due to power shortages. While their normal activities have been disrupted due to power shortages, the rising dollar has also increased business costs for them. The spread of power outages into the cold months and the shutdown of a significant portion of production factories have led to workforce reductions and strengthened dissatisfaction among business owners and wage earners.
Ali Asghar Ahaniha, a representative of employers in the Supreme Labor Council, announced in January this year that fifty percent of industrial parks’ capacity has been halted due to power outages. With about a month remaining until the end of the year and minimum wage negotiations underway, the unstable situation of production enterprises has reduced the capacity to increase wages for the next year, complicating the resolution of workers’ livelihood crises.
The pharmaceutical market has also been experiencing a similar crisis for a few weeks. The factory price of some pharmaceutical items has tripled in recent months. The government has reduced subsidies for food and pharmaceuticals in next year’s budget, and experts warn that drug prices will rise even higher next year.
Currency shortages and reduced subsidies, rising dollar rates, and decreased raw material reserves in recent months are among the main reasons for the pharmaceutical crisis.
Retirees at the forefront of protests.
Recent gatherings of retirees in various Iranian cities have become one of the main centers of protest against the government. Salaried groups and retirees are experiencing the 90,000 toman dollar while in recent years they have faced livelihood difficulties due to wages lagging behind costs. One of the main reasons for retirees’ problems is the government’s inability to organize retirement funds, leading to delayed payments and retirees’ livelihood deficits.
It is said that 15 out of 17 retirement funds in Iran have gone bankrupt to the extent that if government assistance to these funds is cut, they will not be able to pay even this small amount of wages on time. In the 2024 budget bill, about 777 trillion tomans have been allocated for the payment of the government’s legal obligations, adjusting retirees’ salaries, and supporting retirement funds. This means that more than 17 percent of Iran’s public budget expenditures are dedicated to solving retirement fund problems. In such a situation, the smallest budget deficit may lead to a wave of retirees’ dissatisfaction.
A new wave of nationwide protests.
The wave of price hikes resulting from the rising dollar has also spread to the durable goods sector.
These goods, which typically do not experience price hikes as quickly as food items, have reacted to the dollar rate.
According to the head of the Union of Home Appliance Sellers, the prices of these goods have increased by five to twenty percent. Although the rise in the dollar’s value has not yet spread to the car and housing markets, some economic activists believe that prices in these markets will soon be adjusted.
In a situation where the point-to-point inflation rate was announced to be close to 32 percent in January this year, some experts predict that the price increases in February have been so significant that they expect inflation to reach forty percent by the end of the year. Protests against the government continue while external pressures on Iran’s economy are also increasing.
The resumption of the U.S.’s maximum pressure policy against the Islamic Republic of Iran in Donald Trump’s second administration has limited the government’s access to more financial resources to resolve ongoing economic crises.
Scott Besant, the U.S. Treasury Secretary, recently announced efforts to reduce Iran’s oil exports to less than 10 percent of the current level. If this news comes true, a full-blown crisis awaits Iran’s economy.
While this situation continues, the President of Iran believes that part of the price hikes is out of the government’s control, and social forces have also concluded that the government is unable to manage ongoing economic crises. This situation has created numerous speculations and placed the country’s social environment on the brink of a new wave of nationwide protests.
