Bottom Line & Above

26 April – 2 May 2023 

Workers Losing Ground in Iran

During last autumn’s protests in Iran, the question for which analysts kept checking their crystal balls for an answer was “how broad a social base supports these protests?”  Its core seemed to be young adults and women, and that gave the issue an appeal broader than the educated middle class that had been the core of most previous episodes of protest. The nationwide geographic scope of the unrest, encompassing not just major cities but smaller, typically more conservative regional and rural communities tended to suggest the protests had support that extended beyond the sort of people the late Alabama Governor George Wallace derided as “pointy-headed intellectuals who couldn’t park a bike straight.” Observers with ties to Iran earnestly assured us that this time the protests really were inclusive of different social and economic classes—but offered little hard information to support the claim. Older but wiser analysts—well, maybe not wiser, but more cynical—who have seen the bleached bones of past predictions of the Islamic Republic’s imminent demise, tried to keep an open mind—but they wanted something more than well-meaning assurances.

Workers, in particular, were the social group such analysts kept an eye on. We all remembered how, in October 1978—late in the Iranian revolution—an oil workers’ strike crippled Iranian oil production, taking 4.8 million barrels per day off the market—about 7 percent of world oil production at that time. Some have argued that strike was the coup de grâce that did in the Shah’s rule. We weren’t expecting quite so grand a result last fall, but a workers’ strike of any magnitude would be a good indicator that blue collar workers also supported the protesters.

There were calls from various quarters—often from “white collar” unions like teachers—for a general strike but not much came of it. Then, in November 2022, came word that oil workers had gone on strike. Pulses and imaginations raced—was it déjà vu all over again? Would the workers begin to shut down the economy and demoralize the Nezam? Well, no. It turned out that it wasn’t oil workers, per se, who struck, but the employees of private contractors that did ancillary work in the oil fields—carpenters, electricians, and the like. And the Nezam was quick to respond with both force—and a promise of better wages. The Mahsa Amini protests last year were not your father’s revolution. 

The unions and the economy aren’t your daddy’s, either. The mullahs have not been especially friendly toward unions and were careful to incorporate into the new revolutionary state the myriad workers councils that sprung up during the revolution, but Ayatollah Khomeini’s emphasis on supporting the downtrodden, and the role that workers organizations played in supporting war production and recruiting drives during the Iran-Iraq war helped them carve out an influential place in the Nezam.  So influential, in fact, that to gain labor’s support, the late president Ali Akbar Rafsanjani helped pass a worker-friendly labor law in 1990. In 1997 the main labor organization in Iran, “Workers House,” helped to elect as president the reformist Mohammad Khatami—a pointy-headed intellectual if there ever was one. But with the coming of Mahmoud Ahmadinejad’s presidency in 2005, these gains were steadily reversed. Formerly nationalized enterprises were privatized, and the new private owners hired contract workers—whom the 1990 law did not cover—to circumvent regulations. The power and influence of organized labor in Iran, such as it was, declined steadily and the lives of workers became more precarious. And there were no workers’ strikes in solidarity with the Green Movement in 2009.

Labor’s relative irrelevance in past episodes of protest, however, does not mean Iranian workers are destined to be perpetual damp squibs. Since the turn of the new Persian year in March, the PersuMedia Daily Summary has documented the rising frustration of workers as they realize that the government is swindling them, big-time. 

It starts with the yawning gap between workers’ wages and the rate of inflation. The Supreme Labor Council (SLC), which brings together management and labor representatives, with government representatives acting, in theory, as impartial facilitators, has set the wage increase due workers in the new Persian year at 27 percent—a good 20+ percentage points below the rate of inflation, which is somewhere near 50 percent. It does not help that the government, which is supposed to publish monthly economic statistics showing the rate of inflation, has failed to publish any such data since late February, when inflation stood at 47.7 percent year-to-year. (See this week’s featured article.) Economic analysts in Iran suspect that the inflation rate surpassed that of 1995, at 49 percent the highest year on record.  That would be especially embarrassing for an administration that came to office promising to fix the economy—and it would strengthen the Workers House claim that it’s getting stiffed by the government of Ebrahim Ra’isi.

Workers House is hardly a hotbed of union agitators. It responded, in late March, by working through legal channels, appealing the SLC decision on wages and circulating a petition to President Ra’isi asking him to rescind the SLC enactment.  By early April, the union filed formal complaint with the Court of Administrative Justice asking that the SLC be reformed and address the rights of workers.  The government patronizingly responded that it could raise wages again mid-year “if necessary.”  Reformist media revealed, however, that the government representatives on the SLC, including the Minister of Labor, had strongarmed the labor representatives to push through the miserly wage hike, and announced the decision right before the Nowruz holiday in hopes that the news would be overlooked for a few days. There is a reason public trust in the government is so low in Iran.

Frustration at Workers House has grown as its complaints have been stonewalled by the administration. By mid-April, a labor-market analyst publicly assessed that the workers’ demand for a higher wage increase “was going nowhere.”  Ten days later, labor activists were  publishing articles that declared that the SLC no longer operated as it was originally intended and that workers no longer had any influence over wage rates. The workers have been reduced to supplicants, taking whatever management, backed by the government, deign to give them.

At about the same time, contract workers in the southern Iranian oil fields—electricians, pipefitters, scaffolders, and others—went on strike demanding a 79 percent wage increase plus demands regarding working conditions. At its height, the strike affected 30 companies engaged in oil and gas, refining, mines, and steel in more than 80 worksites.  Then this past weekend the CEO of the Pars Special Economic Energy Zone warned that 4,000 contract workers involved in eight different petrochemical projects would be fired and replaced with others if they did not return to work by the legal deadline.  There is no subsequent information to indicate that the strike continues.

It seems that the Nezam wins again. But it may come to regret the victory, especially as the Ra’isi’s government’s failure to grant workers an adequate wage this year is probably due as much to embarrassment over its abject failure to curb inflation and its inability to fund such an increase as it is to any sound economic reason. So far, the workers have played by the book—filing appeals, circulating petitions, and staging peaceful, apolitical strikes. But as they come to realize that the system no longer protects their interests, that it has become an instrument by which management imposes its wishes on the workers, their disillusionment will deepen, and their patience will run short. The precarity of contract workers’ ability to make a living will still be a strong deterrent to antiregime political activity, but if they have to swallow wage increases that are half the prevailing rate of inflation, it won’t be long before some may question the value of such a precarious livelihood; already some factory owners report they can’t fill job vacancies because the wages are too low for workers to make a decent living. The next time protesters take to the streets of Iran to demand a secular political system, that alternative may sound a lot better to Iran’s beleaguered workers, and if they strike, they likely will demand more than just higher wages.

Ra’isi Administration’s Manipulation of Key Economic Index

From Daily Summary of 28 April 2023

The Ra’isi administration has taken Supreme Leader Ali Khamenei’s orders to curb inflation very seriously—so seriously, in fact, that if it cannot actually effect a lower inflation rate, it is determined to play with numbers to give the appearance of lower inflation. Meanwhile, that does nothing for people whose lives are deeply affected by actual inflation.

Despite a recent declaration by President Ebrahim Ra’isi that the Statistical Center of Iran (SCI), a subsidiary of the Plan and Budget Organization, is the most important guardian of economic indices in Iran and all government entities must base their policies on its facts and figures, it appears its responsibilities have been handed over to some other agency. Mohammadreza Heidarzadeh, a columnist writing in Ettela’at newspaper, puzzles over why the responsibility for announcing the official rate of inflation has been transferred elsewhere, thereby causing a delay and throwing off those whose lives depend on this supremely important index in Iran’s economy today. Among its uses, the rate of inflation determines where the poverty line should be drawn, and this has a direct impact on the lives of workers, who by law must be paid enough so they do not fall below that line. The absence of reliable statistics, therefore, renders any discussion between workers on the one hand and officials/employers on the other meaningless because they have no common standard to serve as a baseline for what constitutes a livable wage. Indeed, today there is confusion in this area. Early January of this year was the first time that official sources put out figures that described the poverty line thus for residents of the capital: 11.9 million tumans (roughly $280) a month for a household of three and 14.7 million (roughly $350) for a household of four. And yet, during wage negotiations for the current Persian year, employers and government officials jointly pushed for the figure of 13 million tumans a month as a livable wage, which could put workers either below, at or only slightly above the poverty line. Worker representatives like Ali Khoda’i contend the figure should be set at 18 million (roughly $430). As for why he and other representatives agreed to 13 million, Khoda’i attributes it to “duress.” The other question is why management came to the negotiating table with the figure of 13 million while aware that inflation over the year 1401 stood at 70 percent for food staples and 100 percent for housing.

Faramarz Towfiqi, a former labor rep to the Supreme Labor Council, which is the body set up by the state to make such decisions, 13 million tumans a month can in no way be described as a livable wage because it cannot meet even 60 percent of livelihood expenses. Towfiqi adds that the inflation figures the SCI has been putting out considerably under-report true inflation figures. As reported by ILNA, the news outlet that is sympathetic to labor causes in Iran, the SCI has lately been delaying the release of monthly inflation figures, which generally come out in the first two days of each new month for the preceding one. Now more than a week into the second Persian month of Ordibehesht 1402, the SCI has still not released the inflation figure for the last Persian month of Esfand 1401, which should have come out in the first Persian month of 1402, Farvardin. This gives rise to the suspicion among economists that the SCI needs time to tamper with figures in an effort to “curb inflation.” As for the Central Bank of Iran, which is another source of official figures on the economy, its inflation reports tend to be even rosier—and therefore farther from the truth—than those of the SCI. At the same time, officials dismiss any other figures that worker representatives come up with as “unreliable” because they do not come from official sources, thereby leaving workers in a Catch-22. Even Djavad Salehi-Isfahani, the economist who watches the Iranian scene closely from his perch at Virginia Tech, finds the situation confusing and perhaps a touch suspicious.

Violence against Clerics: Economic Woes or Political Motives?

From Daily Summary of 27 April 2023

Following the killing of an Assembly of Experts member and assaults on three other clerics, concerns are on the rise about a trend of targeting the clerical establishment. While some grand ayatollahs in Qom point to economic problems as the root cause of public anger, conservative outlets suggest that clerics are targeted because they are seen as being on the “righteous path.” This disagreement may indicate a further rift between traditional clerics and those with political affiliations regarding their views about the country’s political and economic state of affairs.

In the last week of April, Abbasali Soleimani-Osbukala’i, a member of the Assembly of Experts, was shot by a bank security guard, while three other clerics were reportedly assaulted in Tehran and Qom. These incidents have raised concerns about a possible trend targeting clerics. Hamdeli newspaper argued that these attacks are alarming, particularly given that the violence has escalated from verbal abuse to physical assaults, even resulting in murder. According to the reformist newspaper, many individuals blame clerics for the country’s issues, given how they disproportionately occupy official positions, and thus justify their own acts of violence and insult towards them. On 1 May, Judiciary Chief Gholamhosein Mohseni-Eje’i addressed these events and ordered all relevant judicial officials across the country to “pursue, prosecute, and punish the perpetrators,” with utmost speed. However, senior Qom clerics seem to have redirected their attention towards the underlying reasons behind the public’s anger, pointing to economic problems and mismanagement. Reformist cleric Ayatollah Mohammad-Javad Alavi-Borujerdi has claimed that due to fears of assault, some clerics have been afraid for two months to leave their homes. He further argued that people have lost confidence in clerics and called on officials to avoid making empty promises. During a meeting with the Majles speaker, Grand Ayatollah Hosein Nuri-Hamadani drew attention to the Iranian people’s economic hardships, lamenting that the current situation is far removed from the past, when people had greater purchasing power. The grand ayatollah noted that the people hold the perception that grand ayatollahs are complacent in conveying their demands to political leaders, but reassured the public that the clergy is aware of their problems and is making efforts to voice their concerns. Nevertheless, Nuri-Hamadani appeared to suggest that the media intentionally ignored the senior clerics’ endeavors in this regard. Ayatollah Abdollah Javadi-Amoli also highlighted the people’s livelihood challenges, emphasizing that poverty is a concern for all countries regardless of religious beliefs, and it is a rational approach for governance to address it. He underscored the need to establish a foundation for production and employment as the primary strategy to eradicate poverty, calling on the assistance of officials to create a productive environment that offers opportunities for employment to all.

While the grand ayatollahs of Qom express concern about the country’s socio-economic challenges, not all clerics attribute the recent violence to widespread public anger, suggesting that the majority of the Iranian people support the Nezam. Conservative Ayatollah Mahdi Shabzendehdar, a member of the powerful Guardian Council, has argued that clerics should remain committed to the “path of righteousness” despite the challenges they face. Furthemore, Hawzah News, the official media outlet of the Qom seminary, has called the attacks “inhumane and senseless,” and urged clerics to respond to these assaults by participating in a campaign called “We are Ready for Martyrdom.”

Regional Agreements, Prelude to Negotiations with West?

From Daily Summary of 30 April 2023

An image of Foreign Minister Hosein Amir-Abdoallahian standing on Lebanon’s border with Israel may be viewed as a response to his Israeli counterpart’s similar gesture at Turkmenistan’s border with Iran, but the Chinese-brokered agreement with Saudi Arabia, followed by Amir-Abdoallahian’s regional tour of Syria, Yemen, Lebanon, and Iraq, may signal readiness for the resumption of nuclear talks.

Conservative outlet Rahbord-e Mo’aser describes the agreement with Riyadh as the start of a tactical shift in the Nezam’s policies in West Asia as a preparatory step to the resumption of the nuclear talks with “Brussels and Washington.” According to writer Mohammad Bayat, experience with the withdrawal of the U.S. from the nuclear agreement and the deadlock in the JCPoA showed that in order to negotiate with the West, Tehran needed to take into consideration the combination of important variables like the Arab countries’ lobby, the “Zionist regime’s lobby” and the need Saudi Arabia and the UAE had to promote their national brands in the international arena. Bayat views the improvement of relations with the Arab states in the region as well as the management of tensions in the Caucasus (see below) as a strategic step towards reaching a stable nuclear agreement with the West. The conservative analyst is not oblivious to the House Republicans’ efforts to expand sanctions on Iran. Pointing to the timing of these efforts with Amir-Abdoallahian’s trip to Muscat and “discussions about Iran’s nuclear case and prisoner exchange between Tehran and Washington,” Bayat argues that the Republicans in Washington are trying to prevent the Biden administration from signing a nuclear deal with Iran and using it as a winning card in the presidential elections in the U.S. Along the same lines, analyst Esma’il Kiani tells reformist newspaper Sharq that the resumption of relations with Saudi Arabia is a new chapter in Iran’s foreign policy—one that elevates Iran’s weight and influence in the region but one that should also be followed by the resumption of nuclear talks and efforts to resolve PMD issues and challenges caused by the Ukraine war. The recent rounds of human rights sanctions imposed by the U.S., the UK, and the EU, which were reciprocated by sanctions from the Iranian ministry of foreign affairs, convince some analysts that Tehran cannot assume it has reached a stable point in its diplomatic relations with the revival of regional relations. Examining Iran’s possible decision regarding the acceptance of an interim agreement with the West, analyst Baharm Fallahi explains how the partial lifting of sanctions may dissuade Iran, but he points out that if the government is unable to manage its domestic problems, Tehran may have to accept a temporary agreement. In his assessment, the approaching expiration date of the JCPoA is attractive to Iran and the improvement of regional relations encouraged Tehran to assume it has the upper hand in diplomatic relations. The aforementioned Zeidabadi sees Lebanon as a possible beneficiary of the Tehran-Riyadh thaw in relations. The country has been politically deadlocked, with Iran and Saudi Arabia supporting competing factions, but now perhaps the two countries could work together to break the political stalemate there. Meanwhile, Tehran-Washington tensions at sea and retaliatory actions in the confiscation of oil tankers may be part of attempts by both sides to exert pressure, but observers believe they only throw hurdles into the path of the revival of nuclear talks and allow Israelis to take advantage of military tension in the region.

Violence against Clerics: New Trend or Intensification of Old One?

From Daily Summary of 27 April 2023

A day after Assembly of Experts (AoE) member Abbasali Soleimani-Osbukala’i was gunned down by a security guard at a bank and another cleric was caught on tape allegedly being hit and deliberately dragged by a car, some wonder if a troubling new trend is brewing against the clerical establishment (Daily Summary of 26 April 2023: “Ratcheting Up of Violence against Clerics”).

In the case of Soleimani’s killing, state media were quick to describe the assailant’s motive as personal in nature and not political. According to Hamshahri, initial police interrogations of the suspect indicate that the cause of the murder was a case of mistaken identity. Having a longstanding disagreement with the assistant manager at the local branch of the bank, the shooter, who was hired by the bank as a security guard, was seeking revenge on the assistant manager’s brother, whom he believed to be a cleric. Reformist commentator Ahmad Zeidabdi writes that if the Nezam’s narrative is to be believed, one should be concerned about the level of anger amongst ordinary Iranians who by default may be attributing their misfortunes to the clerical establishment. He argues that those clerics who have kept their distance from power and politics should be more concerned as the mainstream perceives the entire clerical establishment as the ruling class. Similarly, reformist cleric Akbar Danesh-Sararudi raises the alarm that the masses no longer distinguish between government clerics and non-state ones, blaming Iran’s Supreme Leader Ali Khamenei and his cronies for the current state of affairs. Danesh-Sararudi describes the assassination as a result of hatred for ruthless and extreme clerics like Ahmad Alamolhoda and Ahmad Jannati for the blanket hatred of the clerical establishment.

As for reactions from among the clergy to the killing of one of their tribe, reformist cleric Mohammad-Ali Abtahi suggested that the fact a cleric of Soleimani’s standing was personally doing his own banking is indicative of his character. Abtahi had previously cracked jokes about the tossing of turbans, but offered what seemed like genuine condolences for the slain cleric. Seminary teacher Hosein Ebrahimi was a bit more provocative, claiming that clerics seek martyrdom, which explains why they wear their “shrouds” on their heads; a fellow cleric, perhaps less infatuated with martyrdom, responded, “You speak a lot of nonsense.”

Will Water Shortage Trigger Protests in Iran?

From Daily Summary of 2 May 2023

The water crisis in Iran is an urgent issue that demands immediate action from both the government and the public. Despite the government’s transitory implementation of water rationing plans, experts believe that without long-term planning to address the water shortage, the country is likely to experience further tensions related to water scarcity.

Data from the National Water Data and Information Center of Iran shows that between Q4 2022 to Q1 2023, 14 provinces have experienced decreased precipitation compared to the same period last year. The province of Hormozgan is an extreme case, having received only 96.5 millimeters of precipitation, which marks a 52-percent decrease from the same period last year. However, the situation in other regions is no better. Ahmad Vazifeh, the head of the National Drought and Climate Change Management Center, warned that during May, Tehran, Qazvin, Semnan, Razavi Khorasan, Sistan and Baluchestan, and Kerman provinces will face severe water shortages, causing significant damage to agriculture from low water levels at dams and minimal river flow. The CEO of the Mashhad Water and Wastewater Company has reported that the province’s dam storage capacity is currently at only 13 percent, and this limited supply is still decreasing. Alireza Fakhari, the governor of Tehran province, has addressed the issue of water scarcity in Tehran, acknowledging the severity of the situation, but arguing that it has not yet reached the level of a crisis. Fakhari emphasized the importance of implementing an effective water consumption system and maximizing the use of available water resources in order to prevent a potential crunch. Amid Iran’s looming water crisis, officials have predominantly resorted to blaming citizens for excessive water consumption. Mohsen Ardakani, the head of Tehran’s Water Waste Management, stated that the annual consumption of drinking water in Tehran province reaches 1.5 billion cubic meters, a level that cannot be sustained given the amount of precipitation. Therefore, in addition to implementing technical and engineering measures to address Tehran province’s water supply, it is critical to observe water consumption patterns and reduce consumption by 25 percent. Despite the government’s short-term implementation of water rationing plans, experts warn that without a long-term strategy to address the water shortage, the country is likely to experience further tensions arising from water scarcity. Farshid Shokrkhoda’i-Bahrevari, the head of Iran’s Sustainable Development, Environment and Water Commission, stated that the water crisis in Iran is bound to persist due to climate change and careless water usage, including excessive extraction of underground resources. In his view, the government’s contradictory stance of prioritizing both the conservation of water resources and achieving food self-sufficiency is unfeasible. Shokrkhoda’i-Bahrevari argued that as a result of these events, water tensions are expected to escalate, potentially leading to strikes, road closures, and other similar tensions.

In recent years, Iran has experienced water shortage tensions in many provinces. The summer 2021 protests were a series of anti-government demonstrations that first emerged in response to water scarcity in various cities across Khuzestan province and eventually spread to several others. Arash Mosleh, CEO of the regional water company in Kohgiluyeh and Boyer-Ahmad province, recently argued that despite an increase in surface water precipitation, the southwestern province will undoubtedly face water shortages and tensions in the upcoming summer season.

US, Iran, China Relations:  Situation Normal!

From Daily Summary of 2 May 2023

[🎧 Listen to this article on the PersuMedia podcast]

It has been a dramatic week for Iran-China watchers, as news emerged that Iran’s seizure of an international oil tanker bound for the US was in retaliation for US seizure of an Iranian oil tanker bound for China. Chinese netizens are up in arms as they say the issue points to the need to further develop China’s naval capabilities. At the same time, exports to Iran have spiked and plans are accelerating to carry out joint military operations.  While this signals closer Sino-Iranian “strategic” relations in the short term, such policies risk angering average Iranians who complain about poor quality Chinese goods, and as small business owners face competition from larger Iranian companies with the capital to import them in large quantities.

Tanker Seizure Riles Chinese Internet

On April 28th, 2023, Iranian state television showed dramatic footage of the IRGC seizure of an oil tanker off the coast of Oman. It soon emerged that the decision was undertaken in response to the United States’ seizure of an Iranian vessel with oil bound for China the day before. The Chinese-owned, Turkish-operated tanker chartered by Chevron and bound for Houston is a perfect example of the murky and complex nature of international shipping, but the fact that the owner was Chinese has been emphasized by some Western commentators as spelling trouble for Sino-Iranian ties. But the response in the Chinese media tells a different story.

Take that, Sheriff of Nottingham!

Chinese commentators saw the incident as a modern-day Robin Hood story on the high seas. One reporter wrote that “the United States, which always robs other people’s oil, was finally robbed by others for once…After all, as far as Iran is concerned, since the United States can confiscate and sell looted Iranian oil, why can’t they confiscate and sell American oil?” The incident “exposed the hegemony of the United States” and “once again reminded us that China must be strong and…needs to play a more active role in resolving Middle East issues through dialogue and cooperation.” For some, the fact that the incident was in response to the US redirecting a Chinese-bound tanker days earlier was seen as a provocation and indication of the need to strengthen China’s naval projection capacity. “We have to think about this question: the actions of the US military have already threatened the energy sources of our country. Do we need to provide assistance for this trade route from the Persian Gulf to the South China Sea? What about full escort?” 

The flag follows trade

The incident highlights growing Chinese desire to participate in the maritime security system to protect its own trade and investments, and prevent the US from using its self-appointed position as guarantor of global maritime security to harm Chinese interests. The recent announcement that Iran was ready to hold joint military exercises with China in order to push back against “unilateralism” and promote a “multipolar world,” while not directly related to the seizure of the tanker, can be understood in that same context.

Increase in Economic Ties

In recent months, there has been a noticeable increase in Chinese exports to Iran. This surge in trade comes amid growing efforts to improve the ability to import consumer products from China. Alaeddin Borujerdi, the chairman of the Iran-China Friendship Association, has said plans are being evaluated for Chinese investment in the southern railway system and creating a direct shipping line between Iran and China. There are also plans to increase the number of flights between the two countries, as demand increases substantially in part due to a surge in Chinese tourists bound for Iran. Exports totaled $1.5 billion, the highest monthly value since May 2018, largely driven by electrical equipment.  Automobile imports have also started in earnest, and are being widely promoted by the government amid criticism of stagnation in Iran’s automobile industry and inability to meet domestic demand. Oil imports remained at zero, but reports indicate that unofficial oil imports remain strong.

But Who Wins?

While such developments might be seen as a positive step towards closer bilateral ties, there are also concerns that such policies could backfire and lead to discontent among the Iranian populace. Many Iranians have voiced complaints about the poor quality of Chinese goods that flood Iranian bazaars at cheap prices and compete with local products. This has led to widespread frustration and anger, as many Iranians feel that they are being taken advantage of by Chinese exporters. And with larger companies having the capital to import goods in large quantities, local businesses may struggle to compete. At the same time, large Iranian business owners stand to gain considerably. The situation illustrates the way in which Iran-China ties create both winners and losers, and carry risks and opportunities for the Iranian government, caught between the need to satisfy the demands of its economic elites and the growing discontent of the average citizen.