Iran is in social and economic meltdown

With unemployment soaring and the advent of hyperinflation, the plight of ordinary workers just gets worse and worse

Wahied Wahdat-Hagh, THE COMMENTATOR

Workers’ strikes and protests are gathering pace in Iran. In 2012, there were more labor protests than for longer than many can remember. Vast numbers live below the poverty line. Non-payment of wages for months at a time is a fact of life for millions. Inflation is soaring. Beggars in veils line the streets.

And this is not merely a product of sanctions, though they are certainly biting. Gross mismanagement by Mahmoud Ahmadinejad’s government is doing terrible damage to the social fabric all on its own.

Many blame the ham-fisted manner in which Ahmedinejad has sought to privatize significant swathes of the economy.

As BBC Farsi reported in April 2012, privatization led to mass layoffs across the country. Iranian newspapers reported cases in which workers had not been paid for as much as two years.

Corruption and incompetence in the banking sector also play a big role in the disastrous Iranian economy. In one widely reported case, a pipe-making company went bankrupt following privatization only for an entrepreneur promising to resuscitate it to secure a hefty loan from an Iranian bank and then promptly leave the country, taking the cash with him. That is not an isolated example.

Unsurprisingly, people are not taking this lying down.

According to Radio Farda, the Persian broadcasting service of Radio Free Europe/Radio Liberty, 20,000 Iranian workers wrote an open letter to the Iranian Minister of Labor in September 2012 complaining about non-payment of wages and the fact that the most Iranian workers live below the poverty line.

Typical monthly wages range between $240 and $320 as against an official poverty line of $800 a month. But it’s even worse than it looks. Steve Hanke, Professor of Applied Economics at the Johns Hopkins University, reckons that following the collapse of the Iranian currency earlier this year, monthly inflation rates may be running at 70 percent.

With average wages already so far below the poverty line, hyperinflation is making it increasingly difficult for large numbers of Iranians to put food on the table.

In such conditions, unemployment is predictably soaring. Nobody believes the official reports that the jobless rate (as reported for the first three months of the year) stands at around 13 percent. Most analysts believe it is at least double that level and rising fast.

Working conditions for many who do have jobs are appalling, According to human rights activist Shirin Ebadi, five workers die daily as a consequences of accidents at the work place. In the past decade 9,625 workers have died at their place of work. A report from Radio Farda on December 18, stated that in 2012 alone around 1,100 miners died in Iran, and that figure is the official one. Again, analysts fear the true number may be greater.

As a response to the growing wave of strikes, companies are firing contracted employees and replacing them with casual labor. Speaking recently to the Iranian newspaper Rahe Daneshju, the Iranian trade unionist Fathollah Bayat said that in 2012, approximately one million contract workers were simply dismissed. He added that day-labor hiring practices were becoming ever more common.

On the other hand, the regime has created a kind of “Islamist labor aristocracy” which remains on fixed contracts in order to secure their loyalty. The Iranian dictatorship and its entrepreneurs fear organized strikes (which remain legal, though frowned upon) and must be painfully aware of the parlous state of the economy.

In February 2006, Ahmadinejad pledged to make Iranians richer. He promised Iranian families so called “justice shares” — financial gifts funded through the sale of state shares. In theory, many millions would have been entitled to up to $800. In reality, few received their dues, and many who did were likely to have been among the most loyal supporters of the regime.

But social justice cannot be achieved through ideological promises. Ahmadinejad didn’t end poverty during his presidential term, though some of his followers did become richer.

Meanwhile, a social catastrophe in Iran continues to unfold.

Wahied Wahdat-Hagh is a Senior Fellow at the European Foundation for Democracy (EFD) in Brussels

December 26, 2012 | 7 Comments »

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7 Comments / 7 Comments

  1. @ larry lunchpail:

    Since the Iranians want to wipe Israel off the map why should we give a flying Turd how many Iranians are killed due to Iranians building their facilities in close proximity to civilians as human shields?

  2. @ larry lunchpail:
    is the reason for that lengthy comment of yours, lunchpail, to elicit a ‘omg!…those poowah hepwess iwanians..awe gonnah be fwyied soon by those wascal joooooos’
    or was it just a public service to inform the readership of israpundit?

    ooh..just wonderin’….

  3. While Iranians are increasingly fretful of an imminent attack, they remain broadly unaware of just how devastating the human impact could be. Even a conservative strike on a handful of Iran’s nuclear facilities, a recent report predicts, could kill or injure 5,000 to 80,000 people. The Ayatollah’s Nuclear Gamble, a report written by an Iranian-American scientist with expertise in industrial nuclear-waste management, notes that a number of Iran’s sites are located directly atop or near major civilian centers. One key site that would almost certainly be targeted in a bombing campaign, the uranium-conversion facility at Isfahan, houses 371 metric tons of uranium hexafluoride and is located on the city’s doorstep; toxic plumes released from a strike would reach the city center within an hour, killing or injuring as many as 70,000 and exposing over 300,000 to radioactive material. These plumes would “destroy their lungs, blind them, severely burn their skin and damage other tissues and vital organs.” The report’s predictions for long-term toxicity and fatalities are equally stark. “The numbers are alarming,” says Khosrow Semnani, the report’s author, “we’re talking about a catastrophe in the same class as Bhopal and Chernobyl.”

    Beyond those initially killed in a potential strike, the Iranian government’s lack of readiness for handling wide-scale radiation exposure could exponentially raise the death toll, Semnani says. His study, published by the University of Utah’s Hinckley Institute of Politics and the nongovernmental organization Omid for Iran, outlines Iran’s poor record of emergency response and notes that its civilian casualties from natural disasters like earthquakes have been far greater than those suffered during similar disasters in better prepared countries like Turkey. With virtually no clinical capacity or medical infrastructure to deal with wide-scale radioactive fallout, or early warning systems in place to limit exposure, Iran would be swiftly overwhelmed by the aftermath of a strike. The government’s woeful unpreparedness remains unknown to most Iranians. “This issue is a redline, the [Iranian] media can’t go near it,” says Jamshid Barzegar, a senior analyst at BBC Persian. “To talk about this would be considered a weakening of people’s attitudes. The government only speaks of tactics and resistance, how unhurt Iran will be by an attack.”

    But if the aftermath of a war remains murky to most Iranians, their anticipation of its inevitability is growing. The commander of Iran’s Revolutionary Guards, Mohammad Ali Jafari, told Iranians last week that “we must all prepare for the upcoming war.” His warning, the bluntest yet by a senior official, that Iran and Israel would enter a “physical conflict,” has raised expectations of an attack among Iranians, who are typically accustomed to dismissing such talk. When reformist MP Mohammed Reza Tabesh criticized Jafari’s remarks in parliament, the hard-line majority shouted him down with cries of “Allahu Akbar.” “When people see their top military commander and officials speaking of the inevitability of war, the belief sinks in,” says Barzegar.

    Whether Iranian officials actually think Israel is closer to launching an attack than it has been in the past, or their readiness rhetoric is meant to convey their own unflappability, the Iranian public is left with greater uneasiness and less real information than ever. Sterile media speculation in Israel and the U.S. ignores the question of civilian casualties, portraying an attack on Iran as a tidy pinpoint strike like those Israel has carried out against Iraq and Syria. Iran, for its part, claims the number of casualties it might sustain will be tolerable. “Hawks on both sides, Israel and the United States, and Iran, want to underplay the level of casualties,” says Ali Ansari, an Iran expert at Scotland’s University of St. Andrews. “But both sides are wildly wrong, there will be quite devastating consequences. It will be a mess.”