by Ryan Mauro
Last month, Iranian President Ahmadinejad began phasing out subsidies of fuel and other essential commodities, despite popular outrage from inside and outside the government. Iranians of all social classes are now suffering and workers are going on strike, causing the country’s most intense turmoil since 2009.
Over the next five years, massive government subsidies to the Iranian people will be eliminated. The subsidies accounted for nearly 30 percent of the budget, with a household making $3,600 receiving $4,000 on average in subsidies each year. The Iranian economy is in steep decline and is now suffering extraordinary stress because of international sanctions. In addition, one study found that the regime would have to end exports of oil by 2015 if domestic consumption was not curbed. Luckily for Ahmadinejad, consumption of gasoline has dropped 20 percent since the subsidies were cut.
The economic necessity of cutting the subsidies carries massive risks for the regime. When gasoline rationing was tried in 2007, it resulted in riots that included gas stations and supermarkets being set ablaze. That also happened this time, as reports have come in of gas stations and a mall in Tehran being torched. The regime deployed heavy security and gave over 60 million people about $80 each to help them with the price increases. The government also issued price fixes to prevent inflation, but this is causing even more trouble as the industries try to cope with massively increased expenses, especially in the transportation sector.
The price of gasoline jumped over 60 percent in an instant and the cost of diesel fuel skyrocketed from six cents per gallon to $1.32 per gallon. Thousands of workers have gone on strike because they are forbidden from raising prices above a certain level so they can afford fuel and other necessities. As a result, many trucking and taxi services simply cannot open for business. The number of buses available for public transportation has decreased in places like Qazvin by three-fourths. Taxi drivers taking part in sit-ins and other workers on strike have been arrested to prevent any type of organized strike from taking place. A union of truckers had its officials threatened when they talked of launching a strike.
At the port of Bandar Abbas, hundreds of small vessels and trucks transporting goods have been abandoned. Ferry services have shut down. The case is the same at a truck terminal in Tehran, which now goes mostly unused. Government employees are also hurting as contract workers are laid off. The Education Ministry had to let go 400 workers. A story has come out of Varamin that a school has told students to dress warmer because it is too early in the year to take on the added expense of using its heating system.
The bazaar markets are also suffering with only 50 to 70 percent of shops open. The travel industry is warning of bankruptcy. The director for the Union for Hotel Owners of Mashhad says that the number of flights to Mashhad has dropped from an average of 200 per day to four. Airline officials are also talking of being forced out of business. The agricultural sector is being ravaged, as the price increase for gasoline for tractors and water pumps takes its toll.
The anger has resulted in some student protests and minor clashes with security forces and demonstrations. Reports from inside the country claim that the banks are swarmed with customers taking their money out in case the regime tries to seize it. In one act of discontent, residents in Tabriz rode donkeys to show their frustration over gas prices. In Ardabil in northwest Iran, some residents made necklaces with pictures of Ahmadinejad and put them around wild dogs, forcing the security forces to try to chase them down or kill them, according to one report.
This move is especially harmful for Iranians with lower incomes, which is where Ahmadinejad draws his support from. This controversy has the ability to unite Iranians of all political and economic stripes against the regime. It is also significant that the regime has lost the support of the top religious authorities in the country. A story that deserves much more attention is the ruling by Grand Ayatollah Hossein Vahid Khorasani, who publicly said no one can be convicted based on a confession while in prison.
“Confessions of prisoners have no validity and if a judge uses confessions for issuing verdicts, that judge is no longer qualified,” Khorasani said.
This is especially important because it is a direct public rebuttal to the regime and implies that that the government is forcing false confessions. Interestingly, Khorasani’s son-in-law leads the judiciary, which could signal another major division inside the government. Supreme Leader Ayatollah Khamenei is aware of the danger that the loss of the clergy in Qom poses to him and recently traveled there to try to win them over. Khorasani refused to meet with him and instead met with the families of political prisoners.
The turmoil increases the security of the West because it reduces the resources available to the Iranian government for its nuclear program and support for terrorism. Israeli intelligence believes that the sanctions on Iran have forced the regime to reduce its budget for Hezbollah by a stunning 40 percent. This cutback came before the subsidies were cut, so the regime and the terrorists that rely upon it for funding are in an even more precarious position now.
Don’t let the inability of the Iranian opposition to mobilize tens of thousands of people in one spot fool you. The regime is on an unmistakably and probably irreversibly downward trajectory. In the fight against the Iranian regime, one of our best assets is its own leadership.
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