For decades most “Iranologists” regarded one theory as “certain” in Iranian politics: Three segments of society would never rebel against the system created by Khomeini in 1979. The three were the bazaaris, the clergy and university students seduced by leftist ideas in vogue across the globe at that time.
The three played a central role in the 1979 Islamic Revolution, the bazaaris by paralyzing a chunk of the economy, the clergy by fanning the fires of religious zeal among newly urbanized masses, and students by providing the brain to complement the muscle in the streets.
Over the decades the clergy and students occasionally broke that rule, but their action was regarded as an exception that proves the rule.
Bazaaris however continued to act as the backbone of the regime and thus helped it navigate many rough patches. That tradition was broken last week when large parts of the Tehran bazaar pulled down the shutters with tens of thousands of its workforce taking to the streets in angry demos and slogans challenging the legitimacy of the system.
It is necessary to ascertain the real weight of the bazaar in economic, social, cultural, and political terms to understand the importance of the protests that were still going on in Tehran and more than 50 cities at the time of writing this piece.
The Tehran bazaar and its associates in bazaars of over 300 other small, medium, and large cities controls the distribution of some 40 per cent of consumer goods in Iran. Even the recently built ultra-chic shopping malls in Tehran and other major cities ultimately depend on the “mother” bazaar of Tehran for key supplies.
The bazaar also finances numerous primary and secondary schools, including religious ones, and runs mosques, charities, orphanages and associations of provincials settled in the capital. Hundreds of clergymen including some big shots are in the pay of the bazaar.
So, why has the bazaar decided to switch sides and openly defy a regime it helped create?
The official explanation given by Ms. Fatima Mohajerani, spokeswoman for President Massoud Pezeshkian, is that the bazaar is feeling the effects of the economic crisis including an un-tamable inflationary rate that makes the pricing of goods riskier than a poker game.
The daily Kayhan supposed to be echoing “Supreme Guide” Khamenei’s views agree. In an editorial Tuesday it said: “The truth is that constant increase in the value of foreign currencies, rising cost of imports, higher rents and greater cost of borrowing and venture capital have put many businessmen in a dire strait. At the same time the steady fall in people’s purchasing power and inability to correctly forecast prices makes continued operation for many businesses difficult.”
Some regime apologists blame the whole thing on sanctions imposed by the United Nations, the United States and the European Union.
However, Foreign Minister Abbas Araghchi doesn’t agree. After a five-hour long discussion with a range of businessmen in Isfahan, Araghchi wrote: “None of the businessmen and others active in the economy urged me to go and get sanctions lifted. They all told me that their problems are rooted in the Central Bank, the Customs’ Office, The taxation system, the Islamic Jihad Ministry, and the ministries of agriculture, trade and Industries. If those problems are solved new capacities would emerge.”
But how do we solve those problems?
Araghchi gives no answer, maybe because that is not in his bailiwick.
A government poll shows that 73 per cent of Iranians agree with the businessmen who talked to Araghchi in believing that sanctions are not the principal cause of Iran’s economic meltdown.
The Tehran daily Ham-Mihan asserts that “the solution to our economic crisis lies in changes of governance.” But the editorialist doesn’t say what changes he means.
An open letter signed by 180 leading economists inside Iran claims that all the current problems do have economic solutions but insists that none could be applied without political change.
Ali-Akbar Velayati senior adviser of the ‘Supreme Guide” says: “We are ready here in Tehran to eat grass but continue financing resistance in Lebanon, Iraq, Yemen and anywhere else that people fight against arrogance and its allies.”
To ensure its preservation, the regime has chosen a strategy of clientalization of segments of society. As a reward for loyalty, it offers subsidies and “baskets of aid” to over 5 million people who play little or no role in the productive process. Many mass consumer goods and services, notably water, electricity, gas and petrol, are sold at below cost of production.
The result is that some of those items notably refined petrol are smuggled to neighboring countries including Iraq and Türkiye where prices are much higher. The proceeds in foreign currency are deposited at foreign banks. That then causes a shortage of petrol inside Iran forcing the authorities to import refined products from India.
To reward loyalty, almost 40 per cent of the economy is controlled by a few dozen public-private companies that absorb 50 per cent of tax exemption allocations. The parallel economy, much of it controlled by para-military groups in partnership with the clergy operates as a state within the state.
Vanity projects such as nuclear ones absorb astronomical sums that could be invested in productive sectors. After more than 30 years the nuclear program hasn’t produced a single kilowatt of electricity or a single warhead.
Hosting over 40,000 foreign students of theology is another costly vanity project as is the financing of over 1000 “research” groups supposed to be training reciters of the holy texts known as “maddahin” and discovering the deeper meanings of Khomeini’s philosophy.
Bill Clinton once said: “It’s the economy stupid!” He was wrong, it is always the politics clever one!
