Unrest in Iran: ailing economy, internal strife, external influence

Commentary Materials 8 January 2018 14:36 (UTC +04:00)
For the past several years Iran has been receiving messages from some players of international community in the form of persuasion or threats, to abandon, by their opinion, its aggressive policy in the region.
Unrest in Iran: ailing economy, internal strife, external influence

Baku, Azerbaijan, Jan. 8

By Azer Ahmadbayli – Trend:

For the past several years Iran has been receiving messages from some players of international community in the form of persuasion or threats, to abandon, by their opinion, its aggressive policy in the region.

Now the Iranian leaders have received the same message from their own people. The protests that commenced from economic claims have quickly developed into political demands to stop spending billions in Syria and Lebanon and instead to get them involved into domestic problems.

It’s hard to judge how much is here from external inciting as the Iranian leadership believes, and how much it is from real economic problems the country faces, but some things seem quite obvious.

Ailing Economy

The protests began allegedly all of a sudden. The only visible event that could encourage people to take to the streets expressing their discontent was the issue of the draft budget for next Iranian year (starting March 21).

In accordance with the document, the government’s general budget is estimated at about $105 billion according to the USD rate indicated in the draft.

Financing of the development projects decreased by 15 percent (about $17.1 billion). Oil income dropped 10.5 percent (about $3 billion) compared to the current year’s budget. The administration also decided to decrease the volume of cash subsidies by 23 percent ($3.3 billion). It is also planned to increase revenue from taxes by 10.3 percent.

At the same time total defense expenses made 16 billion in the draft budget, while IRGC budget including paramilitary organization, Basij, amounted to almost 8 billion (73 percent growth).

Add possible rise of fuel prices and high unemployment rate, and you’ll get a rough idea about what the Iranian Parliament has yet to discuss and adopt and whether it really turned out to be the reason for people’s anger.

But common Iranians hardly were busy to examine figures recorded in the document. They came out on streets due to the increased prices laid onto the ground of their unfulfilled expectations for better life after signing the nuclear agreement.

Anyway, the economic concerns as a component of the protests were taking place, and Iranian leadership has been wise enough to admit that “the fair demands of the Iranian people must be taken into account.”

Internal strife

Representing the draft budget, President Rouhani urged the Parliament to support his plans for reforming the country’s banking system, as further fueling of the national economy, which is critical for Iran at the time being, has little chances without close cooperation with the international banking system.

Iranian president is an advocate of the Financial Action Task Force (FATF) Action Plan on anti-money laundering and combating terrorism financing (AML/CFT).

In November, the president’s official website published amendments to the draft law on AML/CFT – a document that, if adopted - will allow the country to access the International Convention. If not, Iran will be pushed back to the Organization’s "black list", which will adversely impact the national economy.

The country’s Action Plan expires on 31 January 2018, and the FATF urges Iran to ensure its full and accurate implementation. At its February 2018 meeting, the FATF will assess progress made by Iran, and take appropriate action.

The more space is taken by President Rouhani on Iran’s engagement in AML/CFT, the less space for maneuvering will be left for those, including some clerical circles, who allegedly owe large numbers of properties and huge financial power but who don’t pay taxes and are involved into money laundering.

There are multiple indications that such people exist, and these people resist the adoption of the document.

Why else did some of the hardliners’ media sources comment that putting the country’s banking system under international control was unacceptable and would cause threat to Iran?

So, this issue could be, in some way or the other, linked with the recent events.

External influence

Faced with the threat of internal destabilization, all poles of the Iranian state power teamed up as it used to be many times in the past. A greater goal is to keep foundations of the Islamic revolution, and if something threatens it, then both the reformers and the hardliners become a single body.

As a matter of good tradition, the US, Israel and Saudi Arabia were declared protest promoters. Is there any real ground for assertions that external forces have had a hand in the unrest? Probably, there is.

Washington has a good chance to get European allies on its side in order to isolate Iran again.

In this regard, ousting of President Rouhani from the post could be a ground for the US to terminate the nuclear deal, but this time backed by the EU allies. The main pretext would be an idea that “if Rouhani as a reformer failed to reconcile contradictions between Iran and the rest of the world, then there remains no one with which it could make sense to engage in constructive dialogue.” As well, a finger will be pointed at the inability of the Iranian leadership to govern the country, the blood shed and human rights with thousands in prisons.

Therefore, the resignation of President Rouhani would be the greatest present Iran could make for the White House.

A sign that the European allies’ attitude towards the nuclear agreement could change radically, came last week from the British MP Roger Godsiff, who called on to change UK's Iran policy. He suggested that the government should recognize the Iranian Revolutionary Guard Corps (IRGC) as a terrorist organization. 150 members of parliament have signed the motion.

By keeping its Iran policy too narrowly focused on the nuclear agreement, the British government is turning away from Iranian activists and social progressives targeted by IRGC for arrest, prosecution, probable torture, and long prison sentences, which is the betrayal of core Western values. Such policy might also result in loss of potentially very important allies in the Middle East and throughout the world, the MP believes.

One can say that the impact of Washington, Tel-Aviv or Riyadh on the course of events in Iran is about the same as Iran's role in the events, for instance, in Yemen or Palestine – many blames with little proof.