Smoke rises during a protest after authorities raised gasoline prices, in the central city of Isfahan, Iran, Saturday, Nov. 16, 2019. (AP)

August 4, 2020

In July, many disparate groups of Iranians took to the streets in protest, but the current conditions in Iran mean that widespread and nationwide protests are coming, sooner than the regime expects.

Let’s look at those conditions in more detail.

The economy

In spring 2018, the regime meddled with the exchange rate of the US dollar to make up for its budget deficit by selling the dollar on the black market for 20,000 tomans and pocketing the difference. The toman has fluctuated ever since and the dollar was trading for around 26,000 tomans recently.

Most Iranians don’t deal with the exchange rate directly, but rising currency prices have a direct impact on the price of basic goods. Food is hit hard by this as well as the removal of the standard 4,200 tomans to the dollar exchange rate for importing food-related commodities.

Tehran Chamber of Guilds Chair Qassem Nodeh Farahani announced the removal of the benchmark in May, saying: “From now on, importers will not be able to take advantage of (the 4,200 toman benchmark). This will lead to an increase in the price of food in the market.”

The new exchange rate for the import of food and medication is 16,000 tomans to the dollar, which meant that the ordinary people saw a sudden sharp increase in the cost of necessities. It appears that the regime is not able to control prices, nor does it want to.

In related news, real estate in Tehran rose by 23% between May and June, according to the Ministry of Housing, Roads and Urban Development.

Coronavirus

In addition to rising prices, many Iranians lost their jobs or their businesses due to economic uncertainty and a drop off in a trade, spurred because the regime failed to safeguard people with a furlough scheme or something similar. Over 800,000 registered for unemployment, according to the Ministry of Cooperatives, Labour, and Social Welfare, while at least 30% of businesses laid off people since June.

Those who still have jobs cannot afford to buy, which will lead to more unemployment.

Poverty

The rise in costs and decrease in employment is already a major problem because 80% of Iranian live under the poverty line of 9 million Tomans, including teachers, pensioners, and most government employees.

Economist Vahid Shaghaghi-Shahri, said: “We had a 100% cumulative inflation for a total of three years. Housing rates have quadrupled since 2018, car prices have quadrupled, and rents have almost quadrupled.”

Protests

With all of this, it’s no wonder that Iranians, who can barely make ends meet, are more likely to protest against the regime.

Zahedan MP Hossein Ali Shahriari said: “People will oust us from the government and parliament because of poverty, hunger, and pressure, and this will not take long.”

INU

About Track Persia

Track PersiaTrack Persia is a Platform run by dedicated analysts who spend much of their time researching the Middle East, in due process we fall upon many indications of growing expansionary ambitions on the part of Iran in the MENA region and the wider Islamic world. These ambitions commonly increase tensions and undermine stability.