Iran set to see more unrest in 2019 as economy falters

The government’s 2019 budget included a 20% pay rise for state employees and $14 billion worth of subsidies to provide cheap basic goods.
Thursday 03/01/2019
 Iranian President Hassan Rohani speaks as he submits 2019 budget bill, while a group of lawmakers gather in protest over a water crisis in their constituencies, in an open session of parliament in Tehran, December 25. (AP)
Chronic challenges. Iranian President Hassan Rohani speaks as he submits 2019 budget bill, while a group of lawmakers gather in protest over a water crisis in their constituencies, in an open session of parliament in Tehran, December 25. (AP)

ISTANBUL - Following a year marked by mass protests around the country, Iran can expect more unrest in 2019 as its economy is expected to continue to falter. However, those in the United States and Gulf states hoping for regime change are likely to be disappointed, analysts said.

“We will see continued economic protests and working-class protests,” said Arash Azizi, a New York-based writer on Iranian affairs. “They have the potential to become a game changer,” posing a serious political challenge for the leadership in Tehran, he added, “but even in crisis and shaken by protests, the Islamic Republic can continue to exist for decades to come.”

Iran’s economy has been the target of new US sanctions since August, part of an effort by US President Donald Trump to force Tehran to agree to more restrictions on its nuclear ambitions, its missile programme and its policies in the region. The International Monetary Fund said the Iranian economy is likely to shrink 3.6% in 2019.

Even before the sanctions kicked in, there were demonstrations in Iran against high inflation, economic mismanagement, corruption and environmental problems, starting in December 2017. Protests, some of which developed an anti-regime edge, continued through 2018. In one of the latest expressions of dissent, steel workers in the south-western Khuzestan province in December demanded unpaid wages. More than 40 workers were arrested, reports said.

Near the end of the year, hundreds of university students protested in Tehran, calling for university officials to resign over a bus crash that killed ten people, state news agency IRNA said. The demonstrating students reportedly carried photos of victims of the December 25 crash at a square leading to the university in a rare display of dissent at Tehran’s Islamic Azad University.

In a sign of concern about the widespread dissatisfaction in the country, the government’s 2019 budget, unveiled December 25, included a 20% pay rise for state employees and $14 billion worth of subsidies to provide cheap basic goods such as food and medicine, up from $13 billion in the 2018 budget.

Iranian Supreme Leader Ayatollah Ali Khamenei said the United States wanted “to create discord and division, wage a civil war and create different problems with the help of sanctions, anti-security plots and other such plans.”

Officials said the 2019 budget was designed to provide basic needs of low-income groups, including state employees and pensioners, support production and employment and seek to restart thousands of stalled state projects with the help of private investors. However, the budget speech by Iranian President Hassan Rohani was interrupted by parliament members, who, Iranian news agencies said, were mostly from Khuzestan and were protesting shortages of drinking water in their region, Reuters reported.

Azizi said the Tehran government could offer small-scale concessions, such as the payment of outstanding wages, to placate workers but was unlikely to fulfil wider demands like a call to stop privatisations. “Tehran can’t afford to buy off the protesters while the country is in economic free fall,” he said.

Demands to end the liberalisation of the economy would go nowhere because they went against a broad consensus among policymakers in Tehran, reformers and conservatives alike, Azizi said.

Trump’s Iran policy has made matters worse for Tehran. “The sanctions are successful in putting pressure on the regime, shaking the regime,” Azizi said. Thomas Juneau, an assistant professor at the University of Ottawa, wrote on Twitter that “sanctions will increasingly hurt Iran; there will be a growing realisation in the regime that a few more years of such pain will increasingly threaten the regime.”

Juneau, presenting a series of predictions for 2019, also said “the Islamic Republic will not collapse.”

The United States says its “maximum pressure” tactics are not aimed at bringing down the regime in Tehran but insists that Iran’s policies must be stopped. “Iran’s ballistic missile activity is out of control,” US Secretary of State Michael Pompeo told the UN Security Council in December. “Iran has been on a testing spree and a proliferation spree that must come to an end.” He accused Iran of building the largest ballistic missile force in the region.

Robert Malley, president of the International Crisis Group, said US pressure would not result in policy changes in Tehran. “While US and Saudi hopes that sanctions will force Iran to modify its disruptive behaviour or prompt regime change almost certainly will be disappointed, the economic squeeze is hurting ordinary Iranians,” Malley wrote in a recent analysis.

Malley said he expected the row surrounding the 2015 international nuclear deal with Iran to escalate, a development that could stoke tensions in the region.

“As more pain is inflicted on Iran’s citizens, hard-line voices urging the Islamic Republic to eschew the [nuclear] agreement will grow louder, especially as jockeying for President Hassan Rohani’s and, possibly, Supreme Leader Ali Khamenei’s posts heats up,” he said.

“Even if they comply with nuclear constraints, the temptation could grow in Tehran to make Washington pay a price for its actions by taking aim at its presence in the region, for example by encouraging attacks by Iraqi Shia militias against US targets in Iraq.”