Iran’s Restive Middle-Class Poor

Opponents of Iranian President Hassan Rouhani hold a protest outside the Iranian embassy in Rome, Italy, on January 2, 2018. Tony Gentile/Reuters

The latest recurrence of domestic protests in Iran stems from the country’s role in regional wars, combined with corruption and economic mismanagement. This discontent is likely to continue to pose a challenge.

May 31, 2018

Opponents of Iranian President Hassan Rouhani hold a protest outside the Iranian embassy in Rome, Italy, on January 2, 2018. Tony Gentile/Reuters
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During the last days of 2017, small demonstrations in Iran mushroomed into a nationwide movement, eventually engulfing eighty-five cities. At the time, the protests were thought to have provoked the poor working classes to revolt against economic mismanagement and financial decline. Such a turn of events would have been consequential: these workers were once seen as the last bastion of the Islamic Republic, tied to the regime by the welfare state and a sense of religious piety. The regime’s corruption and its squandering of Iran’s resources on Arab civil wars appeared to have driven away one of its last sectors of support.

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A closer look four months later reveals a different aggrieved population triggered the year-end protests, albeit one that still poses a problem for the Islamic Republic. This was a rebellion by what can best be labeled the middle-class poor. The rise of this segment stems from the 1990s, when Iran oversaw a massive expansion of its university system. In one sense, this expansion marked a government success: the delivering of a promise to widen educational opportunities. Yet the supply of graduates has widely outpaced the economy’s employment prospects. Iran’s labor minister, Ali Rabiei, noted in 2014 that more than 2.5 million young Iranians were unemployed; of them, 1.1 million were university graduates. That figure is believed to be even higher now. These individuals are middle class in terms of their education, cultural temperament, and social media footprint. They are poor in the sense that they have not been able to find suitable employment; many live in shantytowns on the periphery of urban centers.

The economy continues to rely on oil exports at a time when global energy markets are changing.

The Islamic Republic has no apparent solution to this problem. The economy continues to rely on oil exports at a time when global energy markets are changing. Oil may not cease to be the lubricant of the global economy, and a recent surge in prices will certainly boost major producers, but it will likely have to compete with other sources of energy. This could mean a future of diminished prices. The U.S. withdrawal from the Iran nuclear deal on May 8 and expected sanctions also inject new doubt into President Hassan Rouhani’s goal of opening the economy to outside investment. In the meantime, Iran’s regional adventurism in conflicts such as those in Syria and Yemen, mismanagement of the economy, and rampant corruption have cost the regime between $7 billion and $15 billion at a time when the country’s needs are becoming ever more pressing. More protests will inevitably follow and instability is Iran’s most likely future.

Rebellions Past and Present

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Throughout its nearly four decades in power, the Iranian regime has been plagued by mass protests. And though the regime has weathered them, its legitimacy has been weakened with each instance. The first surge of protests took place shortly after the revolution, when the regime sought to consolidate its power. The revolution that launched the Islamic Republic was spearheaded by a coalition featuring liberals, secularists, and Islamists. But once the Islamists sought to assert control, they mounted a purge of their erstwhile allies. This confronted the nascent republic with the first of many protests that would plague its tenure. The confrontation was especially intense between 1980 and 1982, a period more aptly described as a civil war that the Islamists won because of the superiority of their firepower and use of arbitrary violence.

The next wide-scale protest, occurring in the early 1990s, was a rebellion of the poor. Continued migration from the countryside to the cities was producing tens of thousands of urban squatters whom the authorities tried to forcibly remove. This led to riots and violence engulfing many major cities, particularly Mashhad. The army’s unwillingness to repress the protesters led the regime to deploy the paramilitary Basij. The protests were eventually put down, but the lack of public housing persists to this day. The expanding welfare state has simply not kept up with population growth. The poor continue to lack access to health care and education, while the government’s pension plans require systemic reforms.

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Two other large-scale eruptions can best be viewed as political protests. The outlawing of a reformist newspaper provoked the student riots of 1999. However, the underlying cause was the relentless attack by hard-line elements tied to the judiciary and vigilante groups, which were seeking to counter then President Muhammad Khatami’s attempts to liberalize Iranian politics. Khatami’s moves had included opening up freedoms for the press and civil society. A decade later, the rigged presidential election of Mahmoud Ahmadinejad triggered the massive Green Movement. These demonstrations featured economic grievances, but their primary drivers were the loss of political opportunity and stalled reforms.

Regional Power, Domestic Fissures

The most recent revolt comes amid significant disenchantment with the regime. The average Iranian today is 15 percent less wealthy than he was in 2007. A poll widely circulated in Iran in February 2018 by Aftab News, a pro-Rouhani website, indicated that 75 percent of Iranians are dissatisfied with the state of their country, with 31 percent claiming that reforms cannot salvage the situation. Even more distressing for the regime, 41 percent reported a willingness to engage in public protests, while another 31 percent discounted protests as capable of bringing about necessary changes.

The slogans of the latest protest marches lashed out at a cross section of Iranian elites, from so-called pragmatists to hard-liners.  There were economic grievances: “Bread, job, freedom.” Then came calls for the overthrow of national leaders: “Sayyid Ali [Khamenei], pardon us, it’s time [for you] to leave” and “Down with Rouhani.” Finally came the rejection of Iran’s imperialist surge in the Middle East: “Leave Syria alone and deal with us” and “Neither Gaza nor Lebanon, my life for Iran.”

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It appears that many Iranians do not wish to expend their country’s meager resources on Arab civil wars.

The above slogans indicate that economic grievances cannot be separated from political ones. They also cast doubt on the notion advanced by some experts that Rouhani’s election regenerated the legitimacy that the regime forfeited during the Green Movement, as well as show that Iran’s regional interventions don’t necessarily generate domestic support. Even though Iran has won influence in shaping events in places such as war-torn Syria, it appears that many Iranians do not wish to expend their country’s meager resources on Arab civil wars.

Today, the Islamic Republic faces not only public disaffection but also a measure of intellectual paralysis that impedes effective planning. Rouhani continues to hope that he can revive the economy by inviting foreign investments, a task made considerably more challenging by the Trump administration’s decision to withdraw from the nuclear agreement and reimpose sanctions. Even while the United States was signed on to the nuclear deal, Rouhani’s aim of attracting foreign investment was far-fetched given Iran’s inhospitable business environment, lack of rule of law, and unreliable banking system.

In the meantime, Supreme Leader Ali Khamenei continues to tout his “economy of resistance,” which involves relying on Iran’s internal markets and trade with neighboring states, such as Iraq and the Central Asian republics. Both Rouhani’s and Khamenei’s visions are impractical, and, given the disagreements within the regime, the government lacks a coherent blueprint. It is not hard to imagine yet another protest movement emerging.

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