The Iran Protests: Money Matters
It was an omen. On December 27th, there was an earthquake in Iran’s capital. The next day, there were “unauthorized protests” in major cities across Iran, initially about price hikes, most notably in egg price which shot up 50%.
By Day 3, protesters were calling on Supreme Leader Khamenei to quit and demanding a referendum, similar to the one that established the Islamic Republic in 1979. This was apparently too far for the Revolutionary Guard, which began cracking down on protesters and declared the protests over on January 3rd.
Tehran blames the U.S. for the riots. Some suspect conservatives getting back at Rouhani, who won re-election on a promise to improve the economy. Much about the demonstrations is still unclear, but the protesters are not imagining the food inflation.
2015 estimates from the World Bank shows that consumer prices were at 3 times 2010 prices.
This may be because Iran lost about 185,000 sq. kilometers of agricultural land since 2005, due to past droughts, but also to urbanization and economic hardship. Food production in Iran has plateaued since 2007.
And while this crisis continues, Iran is only becoming more populous and the rural population is declining.
UN Comtrade data visualized by the Atlas of Economic Complexity shows that the Iranian government is feeling the squeeze as well, with or without sanctions. Iranian exports are still heavily dependent on refined petroleum.
Iranian petroleum exports have been declining since 2010 and only increased slightly after sanctions were lifted.
Maybe conservatives should listen more to moderates like Rouhani and work to improve the economy for everyday Iranians.
Originally published at sanuber.wordpress.com on January 4, 2018.
