Week by week, the acute economic crisis in Iran is bringing new social groups in confrontation with the regime. Six months ago, the poor people, unemployed and disillusioned youth in tens of small and peripheral towns engaged in the protests what were unprecedented but not unexpected. Along with the street protests, strikes, protest rallies and pickets of industrial workers, poor farmers, women, Sufi followers and so on continued incessantly. In every case the regime proved to be unable to advance a solution.
Furthermore, reports on corruption and mismanagement appeared more on social media that added fuel to the fire of people’s anger. With the coming of the hot season, environmental problems, especially the decline of water resources, affected large parts of the country. The latest development saw protests in Khorramshahr, a city in mostly Arab-populated Khuzestan Province. The lack of clean water in the city for weeks led bloody clashes between local people and security forces. Soon people in nearby towns held solidarity rallies. The regime, which has wasted billions of dollars in rivalry with other regional powers and in its abortive nuclear program, now has to face the crises accumulated over years as a result of the regime’s neglect and corruption.
The US’s withdrawal from the 2015 nuclear deal and declaring that it would punish Iran by “strongest sanctions in the history” has intensified the situation. The Rouhani administration, which boastfully introduced the nuclear deal (known as the Joint Comprehensive Plan of Action) as a keyto all locks, suddenly found the rug pulled from under its feet.
All against one!
Class confrontation has reached a new pinnacle. Though the Iranian working class has always suffered from poverty, job insecurity and humiliation and the denial of the right to form its own basic independent organisations, they feel the intolerable conditions more than ever before. Even in oil and gas sector, where workers earned higher wages, the situation has changed, and now temporary contracts, delayed payments and sacking en masse are frequent.
On 25 June, tradesmen in Tehran’s two shopping centres went on strike and a number of them poured into the street to voice their discontent with the skyrocketing prices and lowering purchasing power of the people that have slid the country into a deep recession. In this way, the growing crisis has damaged not only the working class but also the petty bourgeoisie and lower middle bourgeoisie.
Amid the people’s anger at the regime’s pillage and corruption, the Rouhani administration has tried to absolve itself from accusations. So it sluggishly published the list of the recipients of state-subsidised foreign currencies to be used for import. Many of these importers are suspected of receiving the exchanges but selling imports at the prices calculated based on free market rates, or even selling their quota at the free market. These companies usually have good contacts with corrupt officials or even been founded by officials who themselves have access to financial resources and business secrets. So, it seems these companies are the only parties that have benefited from the chaotic market.
Following the 1979 revolution, the then Iranian big bourgeoisie was disintegrated. Members of this class that united around the monarch lost their social power, and their properties were confiscated and nationalised. After the end of the Iran-Iraq war in 1988, the capital class found a new momentum with the development plans of former President Hashemi-Rafsanjani. Though the industrialisation project almost failed and many industrial estates were left incomplete, the capital started a tremendous accumulation. These new big capitalists were the upper layers of the middle capitalists who were collaborating with the regime’s officials, banks and the bureaucracy. If we look at the board of directors of both private and semi-state-owned companies we see an army of former bureaucrats, technocrats, military officers, MPs and ministers have occupied key positions and are paid enormously.
Over the years, they mostly invested in housing development, import and export, and in industries and agriculture to a lesser extent, and in cahoots with corruptofficials and the military they turned into an influential class. Investment in housing construction roughly doubled between2000-2010.
Iran’s Islamic Revolution Guards Corps (IRGC), which functions as a gigantic military-economic complex, is itself the hotbed of big capitalists who start as supervisors of IRGC linked companies and then appear as private capitalists.
Like the whole regime, the IRGC reflects the contradiction between acting as a conventional capitalist class and acting as a gang of plunderers who don’t care about the future of the system. More and more, the regime finds itself at the crossroad to choose if it wants to be capitalist linked to world capitalism or the island of the parasites that live on oil and gas resources.
With the economic crisis producing a decline in demand, the capitalists shifted from housing to speculative activities, such as gold and foreign currency trade. In recent months, the government has tried to channel this “hot” money into productive activities by lowering the interest rates slightly but that has been completely unsuccessful. The money flows and finds where the profit can be made easily. It devoureverything like a flood, especially foreign currencies and gold.
The government started to presell more than seven million gold coins it would produce in the next two years in order to collect this huge liquidity. On the other hand, in the latest development, the government decided to reduce tax on stock transactions from 0.5 per cent to 0.1 per cent of transactions.According to the news agencies, only 50 individuals have bought five per cent of the coins. One speculator bought 244,000 gold coins (which is worth about 86 million dollar). An economist told semi-official ISNA agency that the 500-600 trillion rials (about 60-70 billion dollars) have already been “neutralised” and about 400 trillion rials (about 50 billion dollars) still pose a threat. Of course, the money removed from circulation has not been put in production but, as this economist says, has been spent to buy gold, automobiles and real estate.
The only way that seems to be able to relieve the crisis on a capitalist basis is to unleash this tremendous stock of money and invest it in production, though this will not reduce the working class suffering. However, the Bonapartist regime has not been able to do this. Its ambitious foreign policy and its bitter competition with rival regimes in the region gives no long-term assurance to the capitalists of the profitability of any productive investment. The privatisation plan was carried out hesitantly and was a failure in the end. The regime’s attempts to join the World Trade Organisation and even the Shanghai Organisation failed. This instability has discouraged capitalists from investing in the branches with long-term returns.
Various groupings of finance capital, both military and civil,control the Iranian economy today through their banks, investment companies, pension funds etc. A report by the Central Bank in 2017 spoke of 500 Iranian economic giants. About 39% of these big businesses are banks. Petrochemical industries came next to the banks. Finance capital has been able to extract profit through speculation and even in the years that the economy was almost isolated from the world.However, with extreme poverty and working class losing its purchasing power, the capital can make up this deficit only through export and finding new markets abroad.
Furthermore, the capital should be able to organise production, especially with the threat of crushing sanctions hovering above the country. Public discontent has already expanded and people have come out to fight the regime and its devastating policies. The coming months will be fateful for Iran. The regime is not able to organise society against sanctions because the people consider it as a corrupt exploiter. Furthermore, Iranian capitalism cannot survive as an isolated island in the world of capital. Nevertheless, switching tracks and changing its rhetoric is not so easy for the regime. It could be facing unprecedented earthquakes as the mass movement, though disorganised, grows. The mass movement at the bottom will widen gaps not only between the regime’s factions but also between the rising big bourgeoisie and the Bonapartist regime.
A stormy period has started, a key question is how a revolutionary progressive alternative can organise the growing movement and, especially, what programme it adopts. Rival sections of capitalists, pro-imperialist and imperialist-back opposition forces will try to exploit the regime’s weakness for their own ends, which is why it is essential that the emerging workers’ movement has its own independent anti-capitalist and socialist programme. Although the regime cannot rule as before, and this can be understood from the increasing number of strikes and campaigns, it has obstinately and cleverly prevented, so far, the formation of labour organisations and revolutionary left parties on the ground. A key challenge revolutionary Marxists must solve is how a revolutionary party can be founded under these repressive conditions and prepare for the tempestuous events that are clearly brewing.