Where is the Destination of an Economy Without Public Trust? Part Three
Where is the Destination of an Economy Without Public Trust? According to Iran Gate, for more than two months, public protests by Iranian citizens against the policies of the Islamic Republic have been ongoing. Unlike most conservatives, there seems to be no prospect for these protests to subside. But in such conditions and considering the characteristics of Iran’s economy, what destination can be envisioned for the country?
In a report, Iran Gate has examined the general state of Iran’s economy. The present report is the last part of a three-part series that has addressed Iran’s social and political conditions. The previous two parts dealt with the characteristics of Iran’s economy in recent decades and the foundational economic pathology of the country. The third part of this series aims to outline a prospect for the economy, considering the current state of the country.
Farewell to Public Trust
In recent weeks, various and sometimes contradictory analyses and reports about the current state of the country have been seen and heard in the media. However, almost all analysts, whether supporters, critics, or opponents of the Islamic Republic, agree on the point that Iran will not return to the days before September 16, 2021. This is a point of no return that has a natural destination, which is the loss of public trust. Unlike past protests, there is little hope for its revival.
An Economy Without Trust
In such circumstances, economists believe that centralized systems resort to directive policies to manage the economy. The Iranian economy, which has followed this pattern for at least the last five decades and has been under the complete control of governments, is now expected to be more subject to governmental directives and decrees than ever before.
The reason for this is the lack of public trust in the government’s policies and even the statements of the country’s officials. Although a greater inclination towards directive economic management does not solve the governance’s problems, it makes the situation more difficult than ever. However, it seems that governments similar to the Islamic Republic make similar decisions in similar conditions, but the result of all these decisions is the same.
But the missing link that peer governments of the Islamic Republic suffer from is public trust, which causes the country’s economy to be on the verge of collapse. Among the policies that the Iranian government has no choice but to implement these days is the adjustment of energy carrier prices. The price of gasoline has the highest priority in this regard because a large portion of what is considered hidden subsidies is allocated to keeping the price of this energy carrier low.
However, the Raisi government, due to the lack of social support and the weakening of public trust in the government, cannot implement the plan to liberalize energy carrier prices. Naturally, the Raisi government is concerned about a price surge following the potential implementation of energy carrier price liberalization in the market. A surge that, if the society is not convinced, can certainly lead to a repetition of the events that occurred in November 2019. Although analysts believe that social changes and the extent of the weakening of people’s trust in the government have intensified to such an extent that a much harsher reaction than three years ago should be expected.
What is the Main Problem of the Regime: Economic Bankruptcy or Street Protests?
As previously mentioned, the thirteenth government is currently engaged in finding a way to put an end to the protests that began more than two months ago, and there seems to be no prospect for what is termed ‘settling down’ in the government’s vocabulary. However, some analysts believe that the main concern of the Islamic Republic is not the events on the streets but rather the issue related to the turbulent rooms of the Planning and Budget Organization.
According to this group of experts, the main problem of the Islamic Republic is the high speed of the country’s economy on the path leading to collapse or economic bankruptcy. An event that, if it happens, can certainly add a new and much larger wave of protests to the current ones in the streets across the country.
Although as we move away from the painful incident of Mahsa Amini’s death in the custody of Tehran’s morality police, murmurs of protests with economic origins are also being heard. The biggest sign was the three-day nationwide strike in the second half of November 2021, which, contrary to expectations, was accompanied by market convergence in most cities of the country. However, the market remains in a state of fear and hope and has not been convinced to express a unified reaction.
However, it seems that if conditions continue in this way and the budget season also shows that the government’s hand for 2021 is emptier than in previous years, the market will certainly reconsider its positions.
Of course, in the meantime, the labor strikes in the country’s oil and petrochemical industries should not be overlooked, which caused the stocks of the mentioned companies to plummet in the Tehran Stock Exchange. On the other hand, there are murmurs about changing the managers of refineries and petrochemicals in the south of the country.
Iran Gate’s follow-ups also indicate that managerial position changes in the country’s industrial complexes are due to the continuation of labor strikes in the oil industry. Another concerning point for the thirteenth government is the announcement of a truck drivers’ strike across the country, which seems to be forming with the aim of protesting low wages.
- The Iranian Economy is Bankrupt Part Two
- There is No Hope for the Future of Iran’s Economy Part One
