http://diyaruna.com/en_GB/articles/cnmi_di/features/2019/03/08/feature-01

Economy |

Economic crisis pushes Iranian regime to the brink

By Tamer Abu Zaid in Beirut and Fares al-Omran

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Iranian labourers protest a delay in the payment of their salaries in Borujerd, in the western province of Lorestan, on February 26th. [Photo courtesy of mojahedin.org]

Iran is in the throes of an economic and political crisis, with popular demonstrations calling on the regime to focus its attention and resources on domestic issues instead of igniting conflicts abroad.

Fueled by the economic crisis, the protests are the first of their kind in 40 years and have important implications, said political analyst Toni Issa of Lebanese newspaper al-Joumhouriya.

They are a sign that Iran's people recognize and resent "the magnitude of the economic or political crises they face", he told Al-Mashareq.

A photo posted on the account of Twitter user Amir Gajsaran on February 18th shows a closed bakery in Iran's Tabriz city, with a sign on its front window that says: "Due to lack of needed flour, the bakery is closed until further notice." 

Iran's economic crisis is compounded by the growing objection of its people to its interference in countries such as Lebanon, Syria and Yemen through the Islamic Revolutionary Guard Corps (IRGC), he said, and its efforts to extend its influence by backing groups such as Lebanon's Hizbullah.

"The popular protests over the economic crisis that are taking place in Iran are unprecedented in terms of their breadth and their nature," Lebanese university professor Mona Fayyad told Al-Mashareq.

"They are in essence spontaneous and grassroots protests," she said.

Queues for food in Iranian cities

The intensity of the popular protests has escalated in recent weeks over poor living conditions, high prices, unemployment and delayed civil service pay.

On February 26th, demonstrations were staged in several Iranian cities.

Iranian activists have been posting photos and videos on social media showing throngs of people waiting to buy food outside shops, amid acute shortages.

Other shops are closing because basic goods are simply not available.

Twitter user Amir Gajsaran wrote: "Bakeries are closing one after the other, starvation on the way?!" He also posted a photo of a queue in front of a meat shop on a street in the Iranian city of Tabriz.

Twitter user Ali Agha wrote: "People have to stand in line for hours to buy some frozen meat."

And a video posted on the 'Free Iran' Twitter page showed a queue for sugar.

Steep rise in the poverty rate

According to the Statistical Centre of Iran, inflation reached 23.5% in February, up 2.9% from January.

"Iran is going through the most severe economic crisis in its history," said Iraqi economist Salam Smeisem. "Inflation indices have risen to record levels against the backdrop of the collapse of the Iranian currency in the foreign currency exchange market."

"The collapse of the currency has led to a decline in the real value of salaries and personal income, which is no longer enough to buy the most basic commodities, and also to a rise in the poverty rate," she told Al-Mashareq.

Iran's poverty rate has risen as a result of the decline in the minimum wage, with media outlets reporting that 10 million of the 14 million Iranian workers are now below the poverty line.

The crisis also has forced many factories producing consumer products to close due to lack of funds and a shortage of raw materials.

"The stoppage of local production activity has pushed the already high unemployment rates in the country even higher," Smeisem said.

According to a recent government survey, the number of unemployed has risen by 237,000, pushing the total number of unemployed past the three million mark as of the end of last summer.

Heavy spending on foreign affairs

"The Iranian people are aware that the cause of their crisis is the excessive spending on weapon manufacturing and foreign affairs," Smeisem said.

This, in turn, has driven the international community "to isolate their country and impose sanctions on it", she added.

"Iranian officials are facing serious economic problems and do not seem to be able to contain them or their repercussions on the street," economist Majid al-Suri told Al-Mashareq.

"Things are going to get worse as international pressures continue to mount."

"Iran is losing its economic and political weight, and its regime is on the verge of falling into the abyss," strategy expert Alaa al-Nashou told Al-Mashareq.

"The Iranian regime occupied itself in the past years with financing and arming militias and armed movements in the countries of the region" and supporting activities that undermine regional and international security, he said.

"This support came at the expense of the country's economy, and the Iranian citizen is the victim who pays the price for these hostile policies that have brought sanctions upon his country," he said.

"The Iranian street is boiling with anger," al-Nashou added.

Impact on Iran's allies

Political analyst Tony Issa said he believes "the economic pressures will affect the support that Iran continues to provide to its allies in Lebanon, Yemen, Syria and Iraq".

"Tehran insists on supporting its allies and militias because its regime is founded on [the principle of] exporting the revolution," analyst Tony Abi Najm said.

"If it stops exporting the revolution, its regime will fall."

As to whether Iran will be able to continue to support its allies with money and weapons, he said, "the US sanctions have without a doubt been effective".

This is clear as Iran and its people have acknowledged the country "is going through the worst economic crisis since the revolution", he said.

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