For more than three months, the Islamic Republic of Iran has been the scene of an unprecedented wave of protest. The political and societal crisis adds to the economic crisis that has existed for years. Interview with Djamchid Assadi, economist, professor at Burgundy School of Business (BSB) in Dijon, France.
RFI: What is the economic situation in the country?
Djamchid Assadi: The economic situation of the Islamic regime is catastrophic. During the last ten years, there was no accumulation of capital, there had been no investments in Iran. On the other hand, the depreciation of the capital was significant. Which means that the productive apparatus was totally out of order. During this decade, the Iranians consumed fewer calories, that is to say that they did not eat and moreover still do not eat properly. Per capita income has fallen. The country is under multiple international sanctions. The oil and gas sector, which used to be the backbone of Iran’s economy, is idling. Today, Qatar, the small country which is as big as one of the Iranian regions, produces much more gas. Gas whose reserves are common between the two countries. This is the dire economic situation in Iran.
The motivations of this protest movement are they more political or economic?
During Mahmoud Ahmadinejad’s second term as president and ever since, there has always been an insurgency situation in Iran. The disputes that we experienced during this period had a strong economic connotation. I’m not saying that was the only motivation of the demonstrators in Iran, but practically every week there were demonstrations with economic demands: employees demanding salary increases in line with inflation, retirees who asked for the revaluation of their pension, contracting parties who asked the government to pay their debts… the list is long. But the turning point came when those who demonstrated for economic reasons understood that, within the framework of this regime, nothing would be resolved. This is how the complaints gradually evolved into political demands. To sum up, there are demonstrators who are in the streets because they are economically dissatisfied, but there are now above all those who have political demands.
► Read also : Iran: in three months, the value of the currency has fallen by more than 22% against the dollar
On social networks, we see another protest campaign, one that invites Iranians to withdraw their money from banks. What can be the scope of such an act?
There are two aspects. First, regardless of political claims, it would be wise for everyone to withdraw their deposit from the Iranian banking system. Why ? Because the banking system is bankrupt. Rather, it works according to the Ponzi method, consisting in remunerating customer deposits essentially with funds deposited by new entrants, with the promise of very high interest rates. This is a fraudulent financial arrangement that can collapse at any time. Therefore, prudence demands that one withdraws one’s money from this bankrupt banking system.
There is also the political gesture to say that we are unhappy. As I have already said, for years, practically every week, there have been demonstrations of an economic nature. From September of this year when the “Woman, Life, Freedom” movement started, there were few economic slogans. Thus, the act of withdrawing one’s money from the bank is a new front in this movement, in this national revolution “Woman, life, freedom”. I think this is a new front to strengthen the political front.
► Read also : Iran: 2022, a year of crises
Can we talk about economic collapse or is it just great fragility?
It is certainly an economic collapse. I even wrote an article about it. You might be wondering, “If this is economic collapse, how come the Islamic regime is still in power?” Because economic collapse does not necessarily translate into political collapse. These are two different phenomena. Look at what is happening today in Zimbabwe, look at what has happened especially in Venezuela. A regime can be economically bankrupt, but continue to govern by repression, by imprisonment, by assassinations. The economic collapse of this regime is obvious, I don’t see any positive prospects, but to replace this regime, we would need an alternative, a political solution.
But what is the impact of this movement on the country’s economy?
There are academic studies on this. We know that demonstrations and strikes have an impact a priori negative on a country’s production. Obviously, when you go on strike, you don’t work, and when you don’t work, you don’t produce or produce much less, and when you produce less, national production drops, that’s obvious. Yes, the economy has collapsed and the protests are not going to restore production, because that is no longer possible under this regime, but indeed, as some demonstrate, if this protest movement results in a constitutional change , the new framework could revive economic activity, because the country’s human resources and talents are considerable.
► Read also: Touraj Atabaki, historian: “We are witnessing the beginning of the end of the Islamic regime in Iran”