Iran by the Numbers

In 2009, a wave of protests gripped primarily Tehran, following what millions of Iranians believed was a rigged presidential election result. The protests that erupted across the country in December 2017 had more complex roots. We wonder: Which of the following factors were key?

A. Inflation
B. Urbanization
C. Budget
D. Lack of transparency
E. Unemployment

A. Inflation … is correct.

Food price inflation, which is always politically sensitive, amounted to nearly 14% in November 2017. For some specific items, food prices even doubled over the year. The uptick in inflation has many Iranians fearful about sliding backward or stalling on recent progress.

Iran’s population as a whole enjoys a more middle-class status than in decades past. Real GDP per capita in 2000 was $7,466 and rose to $15,547 by 2014 – more than doubling. The current situation compares very favorably to the peak in the Shah era of $8,078 in 1976.

B. Urbanization … is also correct.

The spread-out nature of the recent protests, focusing on smaller and less affluent cities in Iran, reflects a population shift – specifically the continued flight of Iran’s population from rural areas to small and mid-sized cities.

This is a key reason why the recent protests were more geographically dispersed than in 2009. Protests therefore included more viewpoints, including arch-conservative opponents of the reformist Rouhani presidency and recently rural, newly urban conservative voters.

The percentage of the Iranian population that lives in cities now is just shy of 75%. (That is about the same as Turkey’s urbanization level, slightly higher than Iraq’s, and much higher than Egypt’s 43%.)

In part, the move to cities reflects collapsing rural agricultural job opportunities. Another reason is that 72% of Iran’s land is unsuitable for or excluded from farming. Much of the remainder is poor or very poor quality land. Already half of the country’s croplands are on “low-quality” lands that are not sustainable. Water resources are also stretched.

Greater access to better information technology also plays an important role. The number of smartphones has risen from 1 million during the 2009 protests to 48 million today.

More than 40 million Iranians have the encrypted messaging app Telegram, although the government has tried to block access.

C. Budget … is also correct.

The December 2017 budget announcement from President Rouhani included substantial increases in military spending, tax hikes and cuts to subsidies and welfare.

This upset voters because fuel prices would continue to go up under the new budget. This is part of a long-term effort to eliminate fuel subsidies and reduce suffocating air pollution in key cities.

Cash handouts would also fall by 45%. The latter is a relatively new program, instituted by the previous president, Mahmoud Ahmadinejad, but it was being widely abused outside of its target recipients. By 2014, 70 million Iranians had registered to receive benefits, out of a total population that then amounted to 74 million.

At the same time, Iran planned to spend $8 billion on the Revolutionary Guard, while continuing payroll for militias in neighboring Iraq and financial support for Hezbollah in Lebanon and Syria. Iran has also spent billions in credit and oil assistance to the Syrian government as part of its regional foreign policy.

This led some protesters to ask why so much money is being spent abroad, instead of being spent or invested at home. Others wondered why the military cannot fund itself, given that it owns such a large share of Iran’s economy.

D. Lack of transparency … is also correct.

The military owns 40% of the entire GDP of Iran. This largely came about through past “privatizations,” followed by further acquisitions (using the revenue streams from those enterprises), as well as government infrastructure projects with a specified military role.

Military-owned companies operate in Iran’s construction, manufacturing, finance, insurance, communications and entertainment sectors, as well as in others. These ownership stakes provide the Revolutionary Guard and other military branches with substantial off-budget funds.

Despite the waning of the sanctions regime and low oil prices, Iran’s citizens wonder why they cannot be bigger beneficiaries of the country’s natural resource riches. Iran has the world’s second-largest natural gas reserves and fourth-largest oil reserves.

The military’s large – and very obscured — share in the country’s economy contributes heavily to a public perception in Iran that corruption is a big problem. That perception is so strong that it puts Iran 131st of 176 in the 2017 Transparency International rankings.

E. Unemployment … is also correct.

Another reason for the protests is that Iran’s population of 81 million needs more jobs – especially for younger workers. The country’s median age is just 30.3 years. Half the population was born in 1987 or more recently.

Overall unemployment is 12.7%. However, youth unemployment at the start of 2018 may be as high as 40%.

More jobs are also needed for young women specifically. Fewer than 17% of working-age Iranian women participate in the labor force, while the world average is 49%. This is actually even lower than Saudi Arabia’s female labor force participation rate (22%).

Word count: 822