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Iran between economic crisis and corruption: what's behind the protest

Over 40% youth unemployment, inflation that borders on the double digits, arbitrary estimates of GDP and high budget deficits, but above all very high corruption: these are the causes of the protest movements in Iran, which present risks but also opportunities for change in the face of the failure of theocratic power and the search for new geopolitical alliances

Iran between economic crisis and corruption: what's behind the protest

As a natural follow-up to the previous study on Erdogan's Ottoman neo-imperialism, and to reflect on the new alliances in the Middle East that appear against the background of the diplomatic divisions of the ashes of the bloody Syrian conflict, the civil riots in Iran take on a new geopolitical value and require reflection.

In fact, it only took a few days for the protest movement that started from the city of Mashad to extend from East to West, bringing together more and more cities up to the capital Tehran. The orders from the Mullahs' Government to return to their homes were useless, and despite the more than 200 arrested last Saturday and the blocking of the internet, to obscure the social media that has been following the demonstrations punctually for days, the unstoppable crescendo of the protests does not stop.

THE GEOPOLITICAL BACKGROUND ON THE SYRIAN RECONSTRUCTION

On Sunday evening, the images froze when the human wave of protesters seemed dangerously close to the residence of President Rohuani, and thus the news that some representatives of the local police had refused to fire on the demonstrators, despite the rumors of the first dead.

While the Basij militias, the body of the guards of the Islamic revolution, remain the point of reference of the strategy for the conquest of the Syrian-Iraqi territories, after the retreat of Isis, and above all after the dominance of northern Syria assumed by Iran. In fact, after the battle for the reconquest of Aleppo, in late spring, returning to possession of territories economically positioned on the Chinese "Silk Road" and therefore on the commercial corridors that connect Asia and the Middle East to the West was part of the skilful political strategy that sees these lands abound in spiritual references to the Shiite world. A first step to strengthen the plan for a pan-Shiite alliance with Iran, Lebanon and Syria, to which Turkey would be added in a version opposed to the Gulf monarchies, therefore a clear reference to the atavistic internal conflict in the Islamic world between Shiites and Sunnis "uncovered" since the second American Gulf War fifteen years ago.

Among other things, this occurs just as China has expanded its activities in support of the Syrian reconstruction plan, in line with the help always offered to Assad by blocking any UN attempt to impose sanctions on Syria and offering logistical and doctor and obtaining in exchange the involvement of its companies for the restoration of the telecommunications and energy networks.

THE PROTESTS AND THEIR ORIGIN: THE ECONOMIC CRISIS AND THE "BRIBE TAX"

Difficult to renew the ranks of a push by Khamenei's ultra-conservatives who would like to re-propose their candidate Raesi who was defeated in the last elections by the current President. Because in Tehran the slogans against the theocratic power in office since 1979 are loud and clear and we haven't seen such organized masses since 2009, the year in which the Green Wave Movement, which Obama turned his back on, started a rebellion with electoral which sanctioned the victory of Ahmadinejad. Differently from then, the echo of the uprisings is spreading in Europe and beyond, where there are communities of those who fled the rise of the Ayatollahs and religious power and the incitement to restore a democratic government of the people until to the reference to the heir of the Palhavi dynasty, Prince Reza Ciro who for a couple of years has become increasingly present in the media in condemning the country's difficult socio-economic situation and the "suicidal" strategy of political-military alliances at the expense of reforms economic necessary and solicited by the multilateral bodies that guarantee financing.

With youth unemployment well above 40%, inflation bordering on double digits and the high level of corruption that characterizes government environments and the results of the country's budget where interference by religious foundations, research institutes and institutions linked to religious power in the squandering of public funds, what catches the eye in the IMF report at the end of October is the country's complex situation. Precisely because of the level of corruption, the country is 131st out of 176 countries measured in the Transparency International Index which measures the perceived level of corruption, a real cost that erodes the GDP and the well-being of citizens, said and measured as a sort of “Bribe Tax” . And the difficulties in attracting new investments also to multilateral donors are known precisely because of this endemic attitude.

In 2016, the year following the nuclear deal with the US Administration led by President Obama, the Government implemented a methodological review of the calculation of GDP which saw the 2016 figure rise from 6,5% to 12,5% %, and is forecast for 2017 at 3,5%. A ploy that was accepted by the International Monetary Fund but not by international analysts who underlined its arbitrariness. Paradoxically, Ayatollah Ali Khamenei himself has asked the Government to take account of the official data from Iran, given that after the agreement with the US and the easing of international sanctions, the country has been allowed to triple its exports of crude oil since November 2015 from less than 1ml barrels per day to over 2,3 million barrels per day. Iran and Iraq have decided not to opportunistically comply with the OPEC cuts imposed by the Saudis as decided in agreement with Russia.

But with low oil prices, the budget deficit remains high, even if lower than other countries in the area, and to this is added a banking system considered by the IMF to be fragile and with a strong need to recapitalize and reduce outstanding debts and toxic assets and which is facing a strong concentration expected in the next few years. The report of the last mission of the IMF staff then underlines that the lack of involvement of highly competent resources in the world of work belonging to the female gender does not make it possible to offer an effective contribution to productivity and therefore to GDP growth.

The publication of a transparent balance sheet on the management of financial resources is the same stumbling block that characterizes the tense relationships between multilateral organizations that offer funding and that seek feedback on outputs that are then directly or indirectly linked to actors involved in the Islamic jihad and the Syrian conflict such as Hamas and Hezbollah, and require timely reporting on the use and achievement of predefined socio-economic objectives which, as in this case, are disappointed and leave the country isolated from foreign investment interests.

In the case of Iran, however, the game at stake is complex and does not stop at budget items alone, as is well understood and sees various players on the political arena for the conclusion of the Syrian conflict: starting from China, interested in strengthening the SCO ( Shanghai Cooperation Organization) involving Iran in an anti-NATO version, to Russia which must guarantee the use of military bases in Syria and maintains good relations with both Turkey and Iran.

For 2018, Iran remains a huge source of concern due to the impossibility of having guarantees on the threat of using a nuclear arsenal which has never known substantial setbacks in its supply but only partial slowdowns and which have deluded Obama of a substantial agreement. While the street riots now silenced by the internet blockade are a huge opportunity for change for a country that could play an economically relevant role with a government seriously committed to a plan of structural and economic reforms that affect the malaise of young Iranians more intolerant of a theocratic power that has failed in managing the economic system and its sustainability despite the enormous wealth within it.

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