by Joseph Puder
In a June 2010 interview, Caspian Makan, the Iranian film-maker, journalist and fiancé of the late Neda Soltan, commented on the future of the Iranian Islamic Republic: “With every passing moment the awareness of the Iranian people increases, while the regime’s power decreases and comes closer to its destruction.” Caspian predicted that the Iranian people will win their demands for a free Iran before the end of Ahmadinejad’s presidency, and perhaps as early as next year.
Mahmoud Ahmadinejad’s announcement last month regarding the end of subsidies on critical commodities, which millions of Iranians depend on for survival, will no doubt increase the already large segments of the population who are unhappy with the regime and its controversial president.
The Islamic Republic of Iran has been spending nearly $100 billion a year – approximately 10% of its Gross Domestic Product — on artificially maintaining the price of gasoline, gas, electricity, as well as basic commodities such as flour and cooking oil.
In the wake of the government’s decision to end the subsidies, gasoline prices have gone up by 75%, the price of bread has quadrupled and, the increased water and electricity bills will send shock waves through Iranian households.
Bread is more than a staple in the Middle East — it is a “political weathervane” in the Middle East and in Iran. In 1977, Egyptians rioted when President Sadat cut the subsidies for bread; those riots nearly overwhelmed his regime. Recently, the BBC quoted a bakery owner in Northern Tehran as saying, “Officials should not play with the bread of the people. It may be polluted with blood.” He was referring undoubtedly to riots that are expected to take place as a result of the massive price hikes for bread.
The manipulative Ahmadinejad, who in recent months has managed to squash the liberal opposition within the ruling elite, promised cash payments of about $40 a month to 60 million Iranians. Ahmadinejad has risked his political future on finally acting on what both the IMF and economically responsible Ayatollahs understand – that however unpopular the ending the subsidies might be, the move was essential to preserving the economy and making it less wasteful and more competitive. And although the Islamic republic has pondered cutting subsidies for decades, Ahamadinejad is the only one who mustered enough confidence, even as an unpopular president, to go ahead with it.
The economic effects of the sanctions imposed by the United Nations, the European Union and the U.S., coupled with the additional difficulties the subsidy cuts create, could bring the economy to new lows and impact an already fragile political climate affected by the disputed 2009 presidential election. Soaring inflation would deepen poverty, a fact that Ahmadinejad has willingly ignored despite a warning from the Parliament’s Research Center that claim his plan would raise inflation to over 60%.
Previously low energy costs enabled Iranian industries to compete despite their antiquated equipment, but the rise in energy costs has now taken that advantage away. And even though Ahmadinejad has promised Iran’s domestic industries 30 percent in new aid, it is not sufficient to compensate for higher production costs. Iranian industries are already at a competitive disadvantage because of the high cost of labor and overvalued exchange rate.
A 2010 parliamentary report indicated that Iran’s unemployment levels were among the highest in the world — 17th worst among 208 countries and territories surveyed. And, unemployment is particularly severe among young people.
Lacking an efficient system of data collection, distributing financial assistance to 60 million Iranian as the Ahamdinejad government has promised to do, is bound to leave many poor people behind, especially those who failed to register electronically or are illiterate. Many among the 90% who registered might be removed simply because of bureaucratic attempts to cut costs. This would inevitably cause a backlash against the regime.
The millions of educated, middle-class Iranians who took to the streets following the stolen elections of 2009 will likely be joined by more volatile and poorer masses, hurt by the subsidy reforms. In addition, Sunni-Muslims in the outlying parts of Iran – the Kurds in the northwest, the southwestern Ahwazi-Arabs in Khuzestan, and the Baluchistan in the southeast of Iran — are seething with rebellion against the regime, thus, draining the hated regime of precious resources in order to protect itself.
Economic survivability for the average Iranian notwithstanding, the freedom deficit in Iran and the repressive nature of the Islamic Republic and its current government is pushing most Iranians to the brink. The power struggle between the hardliners loyal to Ahamdinejad and the more moderate traditional conservatives (in the mode of former President Rafsanjani) is widening, with Ahamdinejad being forced to defend his controversial choice of vice president and the recent sacking of Foreign Minister Motaki. Ahamdinejad is also under fire for assuming powers previously within the domain of the legislative and judicial branches.
British member of Parliament Brian Binley captured a good slice of Iranian reality in a recent speech (1/13/11) when he called on the British Foreign Office and the U.S. Government “to realize that their ‘dual track’ policy toward Iran of diplomatic engagements and sanctions is not only incompatible with the situation, it is directly counterproductive. Attempts to engage with the regime have been both fruitless and completely divorced from reality. Engagement was advocated out of a mistaken view that the regime in Tehran is powerful and stable, and that the only plausible option was to cut a deal with the mullahs and ignore its opponents. Events have proved that view to be wrong.” He went on to say, “Anti-government protests that began in 2009 have consistently highlighted the weakness of the case for appeasement. They repeatedly exposed a regime that is fragmented, devoid of a sound political base and fiercely opposed by a generation of young men and women who yearn for freedom and overwhelmingly support the demands of the organized resistance for internal regime change.”
Amir Fakhravar, imprisoned in the notorious Evin prison for 5 years while serving as an Iranian student leader, is currently the president of the Iranian Freedom Institute in Washington DC. He summed up the Iranian people’s sentiments saying, “The Iranian people have been repressed for over 30 years, and they want freedom.”
Will Caspian Makan’s prediction come true? The gamble Ahamdinejad undertook with ending the subsidies may very well spell its coming demise.
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