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FP: Ahmadinejad the Weak

Author: Arang Keshavarzian
July 19, 2010

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Arang Keshavarzian analyzes how growing economic discontent sparked the recent Tehran bazaar protests and why they could bode badly for the Iranian regime.

Casual Iran-watchers were captivated last week by the intrigue around erstwhile nuclear spy Shahram Amiri and his successful homecoming. But the Islamic Republic was likely keeping closer tabs on the Tehran bazaar -- where shopkeepers and traders were on strike for more than seven days -- than on Washington's Iranian interest section, where Amiri awaited departure. The bazaar protests had little to do with the nuclear impasse or the Green Movement, but they are a sign of popular economic discontent and a likely harbinger of further turmoil to come.

Iran's traditional covered marketplaces earn their reputation as objects of historic and architectural interest, but they aren't just tourist destinations. They are still-active trading posts where small peddlers hawk their wares, and some of the country's most wealthy import-exporters and wholesalers conduct their business. The immense, covered complex in downtown Tehran, for example, is home to tens of thousands of would-be entrepreneurs. The bazaars are not quite as central to Iranian life as they used to be -- in the past 30 years, many of the most prominent bazaaris have either moved their headquarters to new business centers in Tehran and Dubai, while the Islamic Republic has carved out a privileged position in international and domestic markets for government foundations -- but they are still at the heart of the national economy. The bazaaris are an interest group keenly aware of the leverage they wield, and unafraid to use it.

Last week's protests were spurred by the national government's attempt to increase the merchants' annual income tax by 70 percent. Even though the government quickly adopted a conciliatory tone, the strikes persisted. The announcement last Monday that the government and the Guild Council, the bazaar's official representatives, had negotiated a modest 15 percent tax increase made no difference: The shops remained shuttered, leading to clashes between bazaaris and government security forces. It was only this past weekend that traders agreed to again open their businesses.

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