The Wider View

Jan 04, 2023

Iran’s Difficult Path to Freedom

The root causes of the current wave of protests in Iran go beyond objection to the compulsory hijab. They are a clear indication of the government’s loss of legitimacy. However, there are no convincing scenarios for regime change.

A man gestures during a protest over the death of Mahsa Amini, a woman who died after being arrested by the Islamic republic's "morality police", in Tehran, Iran September 19, 2022.
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Protests have been sweeping through Iranian cities since the death of 22-year-old Mahsa Amini in the custody of the so-called morality police in September 2022. The display of bravery by the Iranian protesters has been met with a brutal response from the government, which has been severely criticized by the international community. Solidarity with the people of Iran has been shown via online petitions and demonstrations across the globe.

From Istanbul to Washington, mass protests have been organized in support of the protesters in Iran. On November 25, the United Nations (UN) Human Rights Council held its 35th special session to discuss the violation of human rights in Iran. The session concluded with a majority vote in favor of an independent fact-finding mechanism by the UN aimed at investigating the state-sponsored violence in Iran to hold those responsible in such acts accountable and brought to justice. Months into this crisis, several questions have been raised: What do these protests mean to the people and to the regime? What are their possible outcomes domestically, regionally, and internationally? To answer these questions, it is important to review the root causes of this outbreak of public dissent in Iran.

Corruption, Nepotism, and Mismanagement

Although the impetus for this round of protests was the persecution of women for their choice of attire in public spaces, the root causes of the public anger go beyond objection to the compulsory hijab. These protests are a clear indication of the regime’s loss of legitimacy. Four decades after the Islamic Revolution, there is a public consensus over regime’s inability and incompetence in governing the country. Iran´s governance model has been widely characterized as one marked by corruption, nepotism, and mismanagement.

Several cases of fraudulent activities and embezzlement in government-owned and semi-government-owned entities have surfaced in recent decades. One of the largest cases of fraud and embezzlement was brought to media in August 2022 when nearly $300 million was reportedly lost by the Mubarake Steel Manufacturing company in Isfahan. Such cases are frequently left unresolved in Iran. Stolen assets are usually flown out of the country, despite seemingly tight financial sanctions, and the officials involved in these cases are never held accountable or forced to repatriate the lost funds.

Moreover, the Iranian banking sector is also in a dire situation because of corruption. Almost all the Iranian banks have accumulated large amounts of non-performing loans. Roughly 10 percent of the total loans between 2021 and 2022 in Iranian banks were non-performing. These are mostly loans that are extended to well-connected beneficiaries, who often hold board positions at major government or semi-government companies. They bypass banking requirements, receive large loans, then siphon off the funds from their respective companies through fraudulent activities. The government has publicly acknowledged the issue. It has been covered extensively by the media. Nevertheless, none of the individuals or entities involved in these activities have been held accountable.

The same level of corruption exists in the country’s pensions sector. Several cases of fraud and embezzlement have surfaced in the largest pension funds in Iran including a reported loss of $400 million in a government-owned pension fund. There are currently 16 major pension funds in the country, all are reportedly in a disastrous situation caused by mismanagement and underfunding. In addition to corruption and frequent loss of assets, other factors such as low contribution and investment return rates, which are caused by mismanagement, have led to the “unfolding crisis” in Iran´s pension sector.

Nepotism has long been endemic at every level of governance in Iran. Appointments of relatives and allies of government officials to senior positions is the norm in the Iranian government. President Ebrahim Raisi has appointed several family members to senior positions. The former Presidents Hashemi  Rafsanjani and Mohammad Khatami appointed their brothers as their vice president and chief of staff respectively. Since the revolution, the appointments of mid-to-senior level managers at government organizations have been based on ideology and loyalty to the regime, rather than merit. As such, many official positions have been occupied by those who either have good connections with the officials or strong ideological loyalty to the regime. Consequently, Iran’s governance model has become highly inefficient over the years, while wrong policy choices, rent seeking behavior, and a lack of transparency and accountability have become dominant norms.

The impact of the regime’s governance model on citizens’ everyday lives has become increasingly visible. Iranian citizens have witnessed the deterioration of the country in various respects. From the loss of public assets in the banking, pensions, and business sectors to environmental exploitation and degradation that have been widely regarded as consequences of the regime’s governance. After decades of decline in various areas, the people have brought their grievances out onto the streets to demand a regime change.

The Government’s Response: Repression

In recent years, inflation has been persistently high and there have been several rounds of currency devaluation. These are partly related to the Islamic Republic’s political obtuseness when it comes to its nuclear aspirations, which led to harsh economic sanctions. Unemployment has also been increasing due to a combination of factors that affect people’s access to employment opportunities including sanctions, nepotism, mismanagement, and most recently the global pandemic. Over the past 10 years, there has been a rapid deterioration in the livelihood of the average Iranian citizen. Millions have been pushed into poverty in Iran.

Access to basic needs such as food and housing has been affected by inflation. The country’s inflation rate soared to above 50 percent earlier in 2022. Food prices have been heavily inflated, and as a result protein intake has dropped significantly in the average household’s diet. Red meat per capita consumption in Iran declined to 12 kilogram per year, which is significantly lower than neighboring countries like Kuwait, UAE, and Saudi Arabia (67, 62, and 54 kilogram respectively). Per capita consumption of rice, one of the main food staples of Iranian households, has declined from 40 to below 10 kilogram per year between 2020 and 2022.

Iranian women have been specifically affected by the regime’s policies. Their access to socio-economic activities has been affected by policies such as: university acceptance quotas for women, as well as patriarchal Sharia laws that require the male guardian’s approval for women’s right to work, study, and hold a passport. Moreover, widespread economic challenges, high unemployment rates, and volatile non-inclusive economic growth have affected the participation of women in the labor force. Iranian female participation in the workforce has now fallen behind other countries such as Turkey, Saudi Arabia, and Egypt.

The regime has preserved its control so far through persistent oppression, rather than addressing the root causes of public grievances. Clampdowns on any form of civic activism (political and non-political) has intensified in recent years. Environmentalists, children and women’s rights activists, journalists, artists, and athletes have all come under increasing pressure from the regime and have been severely punished for any work that is framed obscurely as a “threat to the national security” by the regime. The media has been tightly controlled by the state and journalists are banned from scrutinizing the regime.

There are no prospects for reform and there has been a loss of public trust in the government and the efficacy of the Islamic Republic’s governance model. All the prominent political opposition figures have either been exiled or imprisoned. Ethnic minorities have been socio-economically marginalized and violently repressed. Iranians in the diaspora have not been immune from the state oppression. Transnational oppression has long been one of the tools of state control for the Islamic Republic. Several Iranian activists have been assassinated across the world since the early years of the Islamic Revolution (1980s) by the regime. It was recently reported that the regime was plotting to kill or kidnap Iranian activists overseas in response to the latest wave of protests.

Pressure Grows at Home and Abroad

The 2022 protests are significant not only because they have shown a clear demand for the regime change in Iran, but also because they have attracted great deal of support internationally. Several Western countries introduced new tranches of sanctions against Iranian entities and individuals for their involvement in the violent oppression of the protesters. Furthermore, the diplomatic engagements over the nuclear file have come to a halt. Although Iran’s demands around safeguarding and guarantees for the deal had already made it less viable even prior to the protests, European Parliament President Roberta Metsola’s statement in November 2022 that the parliament intented to cut ties with Iran, highlighted the fact that there is no nuclear deal insight. After the UN Human Rights Council’s special session in November 2022, the international pressure on the regime, particularly from the Western powers, is expected to escalate.

There are signs that cracks are appearing within the regime. Some former senior officials like former President Khatami and former head of the Parliament, Ali Larijani, as well as some of the outspoken clerics like Hojatoleslam Fazel Meybodi have acknowledged that time is running out and that the government needs to initiate a national dialogue to avoid a societal collapse. Ali Shamkhani, the spokesperson of the Supreme National Security Council, has urged the two founding families of the regime, Khomeini and Rafsanjani, to speak out publicly and help the regime in calming the unrest. His request was apparently rejected.

The special representative of the Supreme Leader Ali Khamenei in the Islamic Revolutionary Guards Corps (IRGC) called the survival of the regime, despite all the public unrests, a “miracle” and admitted that the widespread support of well-known figures have emboldened the protests. The regime is unlikely to be able to address the socio-economic challenges and is unwilling to address the political oppression. Therefore, it will continue to violently oppress the dissidents, which will lead to further public outrage and deepen the rifts within the system.

Possible Outcomes

One of the possible outcomes of the ongoing unrest is a takeover by the IRGC. The organization is the best-known and perhaps most powerful element within Iran’s military and security apparatus. But the reputation of the IRGC has been extremely damaged due to its role in quashing the protests and kidnapping and killing dissidents abroad. It has also been designated as a terrorist organization by the United States since 2019. An IRGC takeover may be thinkable either through further violence, should the protests expand both in volume and frequency, or through the rise of an ostensibly compassionate figure who stands against the status quo and sides with the protesters.

In such a scenario, in order to gain public support, there could be some changes to the current system such as abolishing the compulsory hijab. The demands of the dissidents, however, now go beyond this issue. The Iranian public is demanding fundamental changes in foreign and domestic policy as well as the socio-economic construct. The IRGC has been one of the causes of the current challenges in Iran and is therefore unlikely to be able to offer any remedies. Moreover, the IRGC is regarded as an organization that supports terrorism and therefore lacks international support. Iran’s regional and nuclear files are strongly influenced by the IRGC. If it were to exert even more control in Iran, that would simply increase the challenges inside and outside of the country.

Another scenario involves continued unrest and the further isolation of the regime without any changes to the political system. This is similar to the situation in Venezuela. The Latin American country has been an inspiring model of governance for the regime in Tehran. Suppression of pro-democracy movement by President Nicolás Maduro, while under harsh economic sanctions, is perceived as a practicable model in Tehran.

The two countries have strengthened bilateral relations over the past decade. Reportedly 300 agreements in various areas of collaboration have been signed between the two governments, including a comprehensive scientific collaboration agreement, maintenance and development of electricity power plants, oil refineries and low income housing. Moreover, to circumvent the US sanctions, the two countries have been swapping oil and fuel. Maduro’s resilience against the US-backed Juan Guaido has undoubtedly inspired Tehran. After September 2022, the most desirable scenario for the regime is undoubtedly to maintain the status quo, despite the international pressure, and control the ongoing nationwide unrest through heavy-handed violence.

The regime may try to stage the rise of a senior reformist figure like former President Khatami. This is unlikely to succeed as the reformist movement has long lost the public’s support. The wave of savage killings of Iranian intellectuals and activists that took place during Khatami´s presidency has eroded the credibility of the reformist politicians in Iran. Moreover, the reformist movement and its senior figures have remained relatively silent during most of the protest waves in Iran, particularly during the latest unrest. These protests initially started in reaction to the state-imposed compulsory hijab, which is a religious practice supported by the reformists.

In recent years, the public resentment of members of clergy (reformist or otherwise) has become evident. Videos are shared in social media that capture the public humiliation of Shia clergies as a form of protest to the regime in Iran. The religious establishment, in the eyes of ordinary Iranians is associated with post-revolutionary oppression and the corrupt power distribution structure. As such, the religious elite, including the reformist Khatami, have very little chance of assuming a meaningful position in the post-2022 political structure in Iran.

Finally, there has been public demand for a referendum in Iran that is monitored by impartial international bodies. In recent years various groups inside and outside of Iran called for a referendum and peaceful transition toward a secular liberal government. In 2022, various heads of communities in Iran have also openly called for a transition via a referendum. Solidarity for Iranian protesters has been expressed by a range of supporters from the German Chancellor Olaf Scholz to the pop band Coldplay. The United Nations held a special session on Iran to discuss ways in which the international community can support the people in Iran. There are some efforts being made to create a coalition amongst various opposition groups inside and outside the country to form a transition council and lead the movement.

At the same time, the regime is actively targeting the dissidents. Iranian activists and journalists abroad have been under threat from the regime and targeted by regime-sponsored online misinformation campaigns. There has been a vacuum of leadership within the dissident movement. This highlights the significance of a referendum for future of the movement in Iran. Iranian protesters, traumatized by four decades of autocracy, are reluctant to unite behind one leader. The opposition figures are equally careful not to call themselves “leaders” of this movement. The experience of Iraq and Libya has demonstrated that the path to democratization can be complicated by foreign intervention. Therefore, a transition of power in Iran will be best achieved through a referendum to end the current regime.

Regional and Global Ramifications

The path to change is not smooth for Iran. The regime is willing to relentlessly use violence and invest in its complex propaganda campaign. At the regional and international level, the regime toolbox is formed of a combination of the calculated application of military violence, acceleration of nuclear enrichment, and collaboration with Russia in Ukraine to portray power to the West and maintain a reciprocal relationship with Moscow. As such, attacks like those on the Kurdistan Region of Iraq are more likely than any form of projected military confrontation with the US allies in the Persian Gulf. As the latter could indeed provoke a strong response. Tehran announced plans to start nuclear enrichment that is close to weapons grade in its underground Fordow plant for the first time. Although, from technical point of view such an operation will not lead to immediate results and may well be being used as a distraction technique to divert international attention from the protests, the regime’s intention for achieving nuclear military capabilities should not be overlooked.

In relation to its cooperation with Russia in Ukraine, Tehran went from complete denial to acknowledging the delivery of military equipment prior to the war. There is an understanding at the senior level in Tehran that Russia will step in at critical moments to rescue the Islamic Republic. Whether this is a true assessment by Iran or not, remains to be seen. The experience of Russia’s involvement in Syria may well have contributed to this assessment. Russia is the Islamic Revolutionary regime’s role model with its military and economic capacity to stand against the West. In the world view of Iran’s Supreme Leader, the West is destined to decline. As such, the regime is siding with the winner of this struggle. The outcome of Iran’s protest movements will, therefore, have a broader global impact beyond any potential change to Iran’s domestic politics.

Sara Bazoobandi is Marie Curie Research Fellow at the Institute for Middle East Studies at the German Institute for Global and Area Studies (GIGA) in Hamburg.