Is Iran on the brink of a social crisis?
Is Iran on the brink of a social crisis?
Economic crisis and a sharp decline in the national currency’s value in Iran have sparked small but numerous livelihood and labor protests across the country. These protests have revealed signs of a new wave of public discontent forming in Iran.
While people are experiencing frequent power outages, widespread closures, air pollution, rising dollar rates, and inflation, Masoud Pezeshkian’s government has remained 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 extensive that even some political officials within the government are warning about the social consequences and the formation of new protests. A parliament member has, for the first time, reported the possibility of a famine in Iran.
The continuation of this situation, amid signs from the statements of Islamic Republic officials that an agreement with the U.S. is off the table, has reduced the likelihood of any change in Iran’s economic and political conditions.
For this reason, some speculate that if economic problems persist, the current protests might expand further. Ebrahim Azizi, head of the National Security Commission in parliament, has stated that if proper decisions are not made, serious effects and concerns will arise.
Economists have warned for months that the government’s ineffectiveness in solving crises has brought Iranian society to the brink of disaster. From protests against inflation and rising currency rates to recent student and labor protests, there are signs indicating a societal inclination to start a new round of public protests.
Public protests from Tehran’s bazaar 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.
With severe currency fluctuations in February disrupting economic and production activities of businesses, a group of Tehran bazaar merchants and major food distributors gathered on February 16 in response to the price hikes. Some dissatisfied merchants, besides protesting the rising currency rates, also demanded the cancellation of value-added tax on food items.
A few days later, on the evening of February 21, 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, labor and student gatherings have intensified in Iran. On February 17, some 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 investment victims in Qazvin also held protest gatherings. In recent days, several other labor gatherings have been held in the provinces of Khuzestan and Kermanshah.
Recent public protests are not limited to livelihood issues. The accident of an overturned bus carrying a student camp in Kerman, which resulted in six deaths, along with the killing of Amir Mohammad Khalqi, a 19-year-old Tehran University student in a robbery, has angered public opinion to the extent that its traces were evident in some labor 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 killing 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 social groups in Iran is their agreement on the point that the root of all problems lies in the government’s inefficiency in resolving issues. This is a matter that is no longer hidden from anyone, not even Masoud Pezeshkian, the President of Iran, who has stated in response to public dissatisfaction with the economic situation that part of the inflation is beyond their control.
The sharp increase in the dollar’s value has led to price hikes and intensified livelihood tensions. Pezeshkian, facing growing economic and social pressures, has not presented a specific plan to transition from this situation.
In his first reaction to the rising dollar rate, he said that experts should sit and find a solution. On February 19, the parliament summoned the government’s economic team to a closed session to make decisions to counter the rising dollar rate, but no specific policy to resolve the situation was presented at the end of the session.
Dimensions of the new inflation wave.
Disruption in the supply process and food price hikes have been among the most tangible consequences of the rising dollar rate in recent months. Salman Zakir, a member of the Parliamentary Industries Commission, told Rokna News Agency that if imbalances continue and the situation progresses as it is, we should expect famine.
In recent weeks, the price of some food items, such as potatoes, has increased significantly. Domestic media reports indicate that the price of rice, which was 100,000 tomans per kilogram a few months ago, has risen to 200,000 tomans following currency shocks.
These reports also mention a sharp increase in the prices of meat, legumes, eggs, and other essential household items.
Frequent closures and power outages in production companies have also disrupted the supply and production process of goods, exacerbating the crisis.
Many shopkeepers in Iran are protesting against the imposition of working hour restrictions and forced shop closures due to power shortages. In a situation where their normal activities are disrupted by power shortages, the rising dollar has also increased business costs for them. The spread of power outages to the cold months of the year and the closure of a significant capacity of production factories have led to staff reductions, strengthening dissatisfaction among industry owners and wage earners.
Ali Asghar Ahaniha, the employers’ representative in the Supreme Labor Council, announced this December that fifty percent of the capacity of industrial towns has been halted due to power outages. With about a month left until the end of the year and minimum wage negotiations starting, the dire 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 faced a similar crisis for several weeks. The factory price of some pharmaceutical items has tripled in recent months. The government has reduced food and pharmaceutical subsidies in next year’s budget, and experts warn that drug prices will rise even further next year.
Currency shortages and subsidy reductions, rising dollar rates, and decreased raw material reserves in recent months are among the main reasons for the crisis in the pharmaceutical situation.
Retirees at the forefront of protests.
Retirees’ gatherings in various Iranian cities in recent days have become one of the main centers of protest against the government. Wage earners and retirees are experiencing a 90,000 toman dollar while facing livelihood challenges due to wages lagging behind costs in recent years. One of the main reasons for retirees’ problems is the government’s inability to organize pension funds, leading to payment delays and retirees’ livelihood deficits.
It is said that 15 out of 17 Iranian pension funds have gone bankrupt to the extent that if government aid to these funds is cut, they will not be able to pay even the current meager wages on time. In the 2025 budget bill, about 777 trillion tomans have been allocated for the payment of the government’s legal obligations, pension rights adjustments, and support for pension funds, which means more than 17 percent of Iran’s public budget expenditures are dedicated to solving pension fund problems. In such a situation, the smallest budget shortfall could lead to an expansion of the retirees’ dissatisfaction.
A new wave of nationwide protests.
The wave of price hikes due to the rising dollar has also spread to durable goods.
These goods, which usually experience price hikes with a greater delay than food items, have reacted to the dollar rate.
According to the head of the Household Appliances Sellers Union, the prices of these goods have increased by five to twenty percent. Although the rise in the dollar rate has not yet affected the car and housing markets, some economic activists believe that prices in these markets will soon adjust as well.
While the point-to-point inflation rate was announced to be close to 32 percent this January, 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 during Donald Trump’s second administration has limited the government’s access to more financial resources to resolve ongoing economic crises.
Scott Bassnett, the U.S. Secretary of the Treasury, 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 will be looming over Iran’s economy.
While this situation continues, the President of Iran believes that part of the price hikes is beyond the government’s control, and social forces have also concluded that the government is unable to manage ongoing economic crises—a situation that has led to much speculation and placed the country’s social atmosphere on the brink of a new wave of nationwide protests.