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What has brought Iranians into the streets? In a word, the economy.

mode of thought

In the outpouring of anger by thousands of Iranian protesters, people have died and the country's foreign policy and top leaders have been denounced. But the driving factor is the economy above all, say analysts.

A university student attended a protest Dec. 30 at Tehran University while a smoke grenade was thrown by anti-riot Iranian police. Iran has seen its largest antigovernment protests since the disputed presidential election in 2009, with an estimated tens of thousands taking to the streets in several cities in recent days. By Tuesday, 22 people were thought to have been killed. (This image was obtained by The Associated Press from outside Iran.)
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The violent protests in Iran that entered their sixth day Tuesday have brought to the surface several underlying and destabilizing forces in Iranian society, among them anger at the top clerical leadership and a degree of resentment at some of the government’s cherished foreign policy commitments.

The protests, which have delivered the worst scenes of unrest witnessed in the Islamic Republic since millions took to the streets over a disputed presidential vote in 2009, have so far left 22 people dead. They have also exposed a political miscalculation by hard-line foes of President Hassan Rouhani, by launching the protests in an effort to discredit his economic policies, then seeing them spin violently out of control.

Still, the protests are fundamentally about the economy more than anything else, say analysts in Iran: stubbornly high poverty and unemployment, the failure to extract a peace dividend from the much-heralded 2015 nuclear deal, and the continuing problem of entrenched corruption that was one of Mr. Rouhani’s own rallying cries in the last election.

The protests began in the shrine city of Mashhad as an attempt by hard-line factions to undermine Rouhani. But as they have morphed into a broader, nationwide public challenge against Iran’s top leadership, protesters from even remote corners of the nation often considered to be bastions of regime support have torn down posters of Iran’s supreme leader, Ayatollah Ali Khamenei, and chanted “Death to the Dictator!”

The numbers of people on the streets are far smaller than in 2009 – several tens of thousands in total, it appears this time – but the protests have been fueled by a constellation of reasons for discontent, including Rouhani’s latest austerity budget.

Still, in his first public comments since the violence began, Ayatollah Khamenei accused “the enemies of Iran, using various tools at their disposal, including money, weapons, political means and their security apparatuses,” to harm the Islamic Republic.

“The enemy is waiting for an opportunity, for a crack to enter and interfere,” said Khamenei.

He made no reference to economic misery, though such concerns – and Rouhani’s checkered economic scorecard – dominated the presidential election last May. As protests mounted, Rouhani said the economy needed “major surgery” and that “people are angry about corruption and demand transparency.”

'No to Gaza, no to Lebanon.'

One target for protesters’ chants has been Iran’s years-long and expensive projection of power abroad, especially in Syria, Iraq, and Lebanon, where Iran has spent billions of dollars propping up Syrian President Bashar al-Assad, creating Shiite militias in Iraq to fight Islamic State (ISIS), and ensuring the military prowess of its vital ally, the Lebanese Shiite movement Hezbollah.

While that effort has given Iran more influence and leverage across the Middle East than at any other time since the 1979 Islamic revolution – and turned the commander of the Revolutionary Guard’s Qods Force, Maj. Gen. Qasim Soleimani, into a national hero in Iran – the cost has raised some eyebrows.

“Leave Syria, find a solution for us!” is one chant heard on the streets, where social media and even state television have shown buildings and cars on fire and military bases under attack. Another chant has been: “No to Gaza, no to Lebanon, we sacrifice our lives for Iran!”

From the outside, it may appear easy to connect the dots between the costs of Iran’s intervention abroad and the scale of domestic economic woe. But analysts inside the country say Iran’s current unprecedented status in the Middle East is not likely to have been made at the expense of economic prosperity at home, where mismanagement and corruption are more critical factors.

“Frankly speaking, these are arguments which protesters try to hide behind; I don’t believe that even half of one percent of the GDP of Iran is allocated for Syria or Yemen,” says Saeed Laylaz, a reformist economist and former presidential adviser in Tehran who spent time in prison for his reformist affiliations.

“These are arguments, but people are poor,” says Mr. Laylaz. ‘This is the fact that around 30 million Iranians are under the relative poverty line.”

Millions are hungry

Iran’s gross domestic product has grown roughly 20 percent in the past five years, and inflation during Rouhani’s 4-1/2 years in office has dropped from 40 percent to 10 percent. But food prices remain high, and few Iranians feel the benefit of the landmark nuclear deal, which Rouhani promised would bring prosperity as US and other sanctions were lifted.

Officials have stated that 12 million Iranians out of a population of some 81 million are living under the “absolute” poverty line. Laylaz suggests that some 3 million Iranians go to bed hungry every night.

For a country that received hundreds of billions of dollars in oil revenue over the past decade, “it shows that the government of Iran has an absolutely bad performance,” Laylaz says.

Still, he estimates that only 20,000 or 30,000 people nationwide are taking part in the current protests, many of them lower and working class – not Iran’s large middle class that formed the backbone of the far larger 2009 Green Movement protests. Iran’s substantial reformist faction and leaders have so far steered clear of the current unrest.

Iran’s interventions abroad – ostensibly to fight ISIS and “terrorists” beyond Iran’s borders, commanders say, and in their view as a means of exporting Iran’s revolution through proxy Shiite forces – have long been a subject of complaint when times get tough.

“It’s only logical for many people to come to that conclusion when there is so much unemployment, factories are laying off people, and many of the people out of universities also have no job,” says a veteran political analyst in Tehran who asked not to be named. “People think: ‘Why is our government spending so much money out there, instead of creating jobs for us?’ It’s a relatively widespread assumption.”

Similar slogans appeared in 2009 also, about Iran’s support for Gaza and Hezbollah’s war with Israel in 2006, and Iran’s large payments in the aftermath to help rebuild Hezbollah’s strongholds in Beirut and southern Lebanon.

Cash for religious institutions

But more recently, other economic issues have made headlines in Iran. Rouhani last month, for example, criticized and detailed for the first time how large volumes of cash are given to religious and cultural institutions, and the out-sized role they play in Iran’s economy. His budget proposed welfare cuts and a rise in fuel prices.

On top of that, millions of investors have also been stung by the collapse of unauthorized lending companies that grew during the free-wheeling era of former President Mahmoud Ahmadinejad.

“Mr. Rouhani did a good job to shed light on where the money goes in the nation,” says the Tehran analyst.

“There are many, many little things, but when you put them together, it created a very interesting background for this riot to happen,” he says. “It’s not happening in a vacuum.”

Nor is there a single overriding grievance, with a host of economic concerns – including the cost of foreign intervention – all bundled together.

“Always there is a portion of extremists who are against Iran’s role in the Islamic world,” says Mojtaba Mousavi, a conservative analyst and founder of the IransView.com website, noting the similar chants against Iranian support for Palestinian militants and Hezbollah in 2009.

“They began to talk about money spent in foreign countries in [Western] media … but it is important to note that despite their powerful propaganda, this time many reformists are supporting Iran’s role in Syria, Iraq, etc.,” says Mr. Mousavi.

“Chants against Iran’s role in Syria are not even that popular in the protests,” he says. “Poor people may be frustrated by corruption, but they know Qods Force is essential for their security.”

Change of tune in hard-line media

As the protests have evolved, so has the careful balance struck by hard-line media in Iran, which – like a number of hard-line officials – first supported the protests as a legitimate complaint against Rouhani, but have now seen that effort backfire.

At the start of protests on Dec. 28, for example, Kayhan newspaper described them as a popular uprising. And yet by Jan. 2, reflecting the surprise within Iran’s leadership at how quickly the protests spun out of control and turned destructive, Kayhan said the rioters were “pettier than worthless ISIS remnants.”

Such change won’t go unnoticed, as Iranian judicial officials declare that a crackdown is imminent, and that culprits could face charges of “warring against God” – a crime in Iran that can carry the death penalty.

In the weeks prior to the protests, Iranian leaders “acknowledged that there were serious economic hardships, that the poor people of Iran were under pressure,” Abbas Milani, director of the Iranian studies program at Stanford University, told the BBC.

“To now suddenly come and deny the existence of all of these grievances, and say this is all agitation, this is all foreign inspired, is a very difficult sell,” said Professor Milani. He noted that Iran’s most conservative centers have seen some of the most damaging protests.

“These are the places where people are rising up and saying, ‘Enough is enough. Enough corruption, enough incompetence, enough allotment of incredible sums of money to religious institutions that basically do nothing,’” said Milani. “It’s been an accumulation … that has now boiled into discontent in the ranks of the people who were supposedly the most solid base for the regime.”

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