News analysis

Anger over graft fuels Iran protests

It seems ironic that unrest should break out in Iran now, given that the country's economy has been booming for two years.

However, endemic graft stands between the newly rich and a destitute population.

Iran's regime and its internal opposition seem poised for a showdown. Thousands of supporters and detractors of the government have been amassing in the streets, leading to escalating violence.

The main complaints centre on the economic plight of many of the protesters and Iran's foreign policy.

To some, that may come as a surprise, as Iran's situation has not seemed better in years.

It can boast of several diplomatic accomplishments and the economy is on the upswing.

Undoubtedly, Teheran's diplomats can be smug in looking back at the past two years.

First, the Joint Comprehensive Plan of Action (JCPOA) agreement at the beginning of 2016 terminated their international isolation, removed the threat of war and ended a debilitating sanction regimen. Then Russia's intervention in Syria's civil war saved Iran's most important vassal in the region, President Bashar al-Assad.

Concurrently, Teheran's influence in Lebanon and Iraq has increased, bringing the long-held dream of a land corridor to the Mediterranean tantalisingly close.

Even the bet in Yemen, where Teheran supports the Houthi rebels to weaken its archrival, Saudi Arabia, seems to be successful so far.

In addition, several diplomatic missteps by Saudi's inexperienced Crown Prince has served the ayatollahs well lately.

More importantly, Iran's economy - the Middle East's second largest - has begun to hum again. Only a few days ago, First Vice-President Eshaq Jahangiri noted proudly that "the country's growth is on a good trend".

Independent analysts seconded that view. Inflation was down to single digits and oil exports were up 60 per cent, while tax revenue rose 80 per cent last year.

To close its deficit, the government has also reduced its spending, cutting subsidies for water, electricity and fuel.

In 2007, subsidies devoured 27 per cent of Iran's gross domestic product. In 2016, that was down to 3.4 per cent.

After the JCPOA, Iran's GDP rose more than 12 per cent. Last year probably saw another 4 to 5 per cent increase.

"The economic situation in Iran has improved visibly in recent years," the United Nations certified in a recent report, estimating further growth of 5 per cent annually for the coming two years as well.

However, all these riches do not trickle down to the masses, but remain in the hands of few powerful politicians and well-connected business people with ties to the ultra-conservative establishment.

Transparency International's annual ranking of states according to perceived corruption put Iran at 131 among 176 nations.

In November, a hospital in Eslamabad-e-Gharb put the catastrophic consequences of this graft in plain sight for the world to see. When an earthquake shook Kermanshah province, the new wing of the clinic collapsed.

Many people would have died had the 40-year-old original hospital wing not supported the walls of the new structure that was erected by companies connected to the regime, in violation of building standards.

Hundreds died in that quake, many buried by edifices erected by public companies which no one held accountable for flouting regulations. By some estimates, 18,000 homes were completely destroyed. Many of the homeless have yet to receive help from the government.

All that is of little concern to the Revolutionary Guards and the Setad Ejraiye Farmane Hazrate Emam - the Headquarters for Executing the Order of the Imam or, in short, the Setad - which together control about 80 per cent of Iran's economy.

By dispossessing political rivals and marginalising competitors, Setad has become the most powerful and richest organisation in Iran.

Through Setad, Supreme Leader Ayatollah Ali Khamenei owns banks, telecommunications firms, ostrich farms and even factories for birth control pills.

A Reuters report in 2013 estimated Setad's net worth at US$95 billion (S$127 billion).

That leaves very little for the rest of the population. Even after two years of consecutive growth, unemployment officially remains at 12 per cent, while some estimates put it as high as 25 per cent.

Some studies place 40 per cent of Iranians under the poverty line.

Iran's Civil Registration Office noted that more than 37,000 girls under 15 were married off in 2015, most often because their families in poor rural areas see this as the best way of providing for them.

Opposition activists contend that two million to seven million minors have to work instead of going to school, and that 70 per cent of the population do not consume enough proteins, fruits or vegetables.

These people were the ones hit hardest by the latest price hikes for poultry and eggs. And things could get much worse still. The next Budget plans to raise fuel prices by 50 per cent and cancel monetary support for 34 million people.

All this is happening while ever more money is funnelled to military interventions abroad, the nuclear programme and the country's missile development.

Two years after the JCPOA signing, more and more Iranians believe that neither the United States nor sanctions are the real cause of their economic plight, but the regime itself. That is what they want to change now.

A version of this article appeared in the print edition of The Straits Times on January 02, 2018, with the headline 'Anger over graft fuels Iran protests'. Print Edition | Subscribe