Protests in Iran are about more than rising fuel prices

The most serious protests Iran has seen at least since 2017 were triggered by a government decision to raise gasoline prices, but the unrest took a broader anti-establishment turn. Anger has deepened in Iran since the last demonstrations. U.S. President Donald Trump’s all-out offensive on Iran’s economy has plunged the country into a deep slump, and the cleric-led regime has offered no effective reply.

1. Why hike gas prices?

Iran, a major oil producer, has some of the most heavily subsidized gasoline in the world. With the hike, it still costs just 13 cents a liter (up 50%) for the first 60 liters and 27 cents after that. President Hassan Rouhani’s government said the increase was designed to generate revenue to help the needy, who’ve been badly squeezed by the economic slowdown. But energy subsidies are a drain on the state, costing $69 billion in 2018, according to the Paris-based International Energy Agency.

That’s especially true with government revenues, which rely heavily on oil sales, hit by U.S. sanctions imposed as part of Trump’s “maximum pressure” campaign to roll back Iran’s power in the Middle East and undermine its leadership at home. Crude oil exports have fallen to about 250,000 barrels per day, from a peak of 2.5 million barrels per day in April 2018.
2. What’s the state of the broader economy?

The value of the currency, the rial, has tumbled on the unregulated market since the U.S. pulled out of the 2015 multilateral agreement aimed at preventing Iran from building a nuclear bomb and reimposed related sanctions. The International Monetary Fund forecasts that Iran’s economy will shrink 9.5% and inflation could reach 36% this year. Rising prices have eaten away at incomes and led to shortages of some imports, including medicines. European parties to the nuclear deal say they remain committed to it but have struggled to devise a mechanism that wouldn’t expose their companies to U.S.

penalties if they trade with Iran. The hopes of ordinary Iranians that the accord would bring a stronger economy, including prospects for better jobs, have been dashed.
3. What are the protesters’ complaints?

The economic crisis has been at the center of the protests, in which banks and shops have been set ablaze. But deep-seated frustration with the performance of the state has emerged. Protesters appear skeptical that revenue from the new measure will help the poor or middle class. Beyond the gas price rise, the government has come in for criticism for its costly support of allied forces outside Iran that are central to its expansive security and foreign policy, including Lebanon’s Hezbollah group, Shiite militias in Iraq and Houthi rebels in Yemen.

Some protesters have taken aim at the regime itself, chanting slogans targeting Supreme Leader Ali Khamenei, who has final say on all state matters.
4. How has the regime responded?

Swiftly and forcefully. Officials pulled the plug on access to social media and the internet, and security forces moved into the streets. The United Nations estimated dozens of people died in clashes with forces that at times used live ammunition; Amnesty International put the figure at more than 100. Hundreds of people were arrested. Khamenei had presaged the crackdown when the protests were only hours old, publicly backing the fuel-price increases and condemning violence as the “work of thugs.” The Foreign Ministry blamed the protests on U.S.-backed “saboteurs.”

5. What happened in past protests?

Iranians took to the streets starting in late 2017 to express frustration with economic insecurity in protests that expanded to include opposition to the regime. Those rallies were the biggest domestic challenge the government had faced since the 2009 Green Movement, sparked by allegations of fraud in the re-election of President Mahmoud Ahmadinejad. The state reacted swiftly to quash dissidents in these protests, with tens killed, hundreds arrested and web access significantly slowed down.

Source » blommberg

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