30.04.2015

Children of ayatollahs flaunt their wealth

In the wake of the Lausanne nuclear deal, the question of economic inequality has become central, writes Yassamine Mather

Three deadly road accidents in one week, involving expensive cars driven by super-rich young Iranians, have dominated this week’s news in Iran - especially after the country’s supreme leader, ayatollah Ali Khamenei, used a meeting with police chiefs to criticise fast-driving, wealthy youngsters. Khamenei said: “I hear that young people from the generation of wealth, a generation intoxicated by their money, are driving luxury cars and parading in the streets, making the streets insecure ... This is an example of psychological insecurity.”¹

The cars involved in these accidents were Porsches, Ferraris and Maseratis driven by sons and daughters of ayatollahs or their cronies - people who live in multimillion-dollar luxury apartments, wear branded clothes and boast all modern accessories. An Instagram page, Rich Kids of Tehran, dedicated to the spending habits of this group, has gained notoriety as an example of obscene spending. The page shows young men posing next to private planes and helicopters, wearing expensive Rolex watches and holding gold-plated mobile phones, plus young women wearing ball gowns in luxury mansions with private cinema screens and swimming pools. A far cry from the lives of ordinary young Iranians, who need two or three jobs just to survive - and even then on incomes close to the state’s own poverty line.

According to Saham news, the owner of the yellow Maserati killed in last week’s accident was Mohammad Hossein Rabbani, the grandson of ayatollah Rabbani Shirazi.² Rabbani is listed in the official media as a religious scholar who opposed the shah’s regime and became a servant of the newly founded Islamic Republic after 1979. However, most of us on the Iranian left remember him as the personal representative of ayatollah Ruhollah Khomeini, leader of the Islamist movement that overthrew the shah. Rabbani was sent to Kurdistan soon after the February uprising to uphold the rule of the “government of the poor and disinherited” by overseeing attacks on villages where leftwing groups who were fleeing the Islamic regime’s terror had sought refuge in Kurdish areas. It is also claimed that he played a part in show trials that led to the execution of communists in Kurdistan and Khuzestan.

How ironic that the grandson of this fine representative of “the poor and disinherited” should be killed driving a Maserati. It is also interesting to note that the supreme leader, who presides over a $95 billion foundation, is disturbed not by the excessive wealth gathered by clerics and their relatives per se, but by its ostentatious display in the form of expensive cars.

Rentier economy

All those studying the economic, political and social consequences of gross inequality should visit Iran’s Islamic Republic. In explaining the current economic disaster in Iran, bourgeois economists are quick to point out the rentier nature of the economy - the reliance on oil, the role of the Revolutionary Guards in controlling the black market … However, what they fail to point out is this is made possible and compounded by the fundamentals guiding Iran’s economic policies: unfettered neoliberal capitalism. Fast, expensive cars are not a major contributor to the “psychological insecurity” of the population. Low wages, job insecurity, systematic non-payment of wages, spiralling prices, food shortages, lack of basic medication are.

As elsewhere under neoliberal capitalism, there is no ‘trickle-down effect’. While clerics and their closest civilian and military supporters have made billions from sanction-busting and the black market, ordinary Iranians have faced hunger, abject poverty and death due to shortage of medicines and surgical equipment. No doubt the display of grotesque wealth is adding insult to injury, but the supreme leader should pay more attention to the injury. Shahrzad Elghanyan, a New York Times reporter, was astonished by what she saw in a programme screened by the pro-government Press TV: “It was not just the wealth that struck me, but how freely Iran’s ‘one percenters’ flaunted the symbols of western decadence without fear of government retribution.”

She adds:

Thirty-five years after a revolution that promised an egalitarian utopia and vowed to root out gharbzadegi - the modern, westernised lifestyles of Iran’s cosmopolitans - how have some people become so rich?

Much of Iran’s wealth, it turns out, is in the hands of the very people in charge of maintaining social justice. Hard-line clerical leaders, together with the Islamic Revolutionary Guards corps …, have engineered a system where it is largely they, their family members and their loyal cronies who prosper.³

I have previously written about the pro-rich policies under Mahmoud Ahmadinejad’s presidency, but there is no doubt that Hassan Rowhani is continuing along the same lines. What is different is that the current president is more ideological in his defence of neoliberal capital and, now that the nuclear negotiations have progressed, he is turning his attention to internal politics, with disastrous consequences for working people.

Iran’s super-rich, the one percent, are getting richer by the minute, because they thrive on neoliberal economic policies, implemented with the help of the state’s military and security forces. Ahmadinejad promised a situation where 100% of Iran’s workforce are employed on temporary contracts and this is one of the few aims that were all but realised during his presidency. Currently the overwhelming majority of the country’s workforce are employed on such contracts, deprived of any employment rights. Companies do not need to sack rebellious workers and those who organise protests: they just refuse to renew their contracts. In this respect Rowhani is merely following in Ahmadinejad’s footsteps.

Since 1988, when Iran first accepted International Monetary Fund loans, the IMF has sent a commission to Tehran every spring to verify the country’s compliance with global capital’s requirements. Every year by mid-summer the central bank and the government propose further privatisation in the industrial, banking and service sectors, bringing further misery to tens of thousands of workers, victims of subsequent job losses and casualisation. However, the level and scope of privatisation approved by Iran’s supreme leader in 2006 was unprecedented - Khamenei had to ‘re-interpret’ article 4 of the Islamic Republic’s constitution. The government initiated plans to sell off 80% of its stake in a range of state-run industrial companies, in the oil sector, banking, media, transportation and mineral sectors, thus contravening one of its own economic ‘principles’, as laid down in the constitution.

As early as August 2006, when Iran first entered nuclear negotiations, most of the 100 or so points raised in the document sent by Iran to the US administration read more like a begging letter. They called for the lifting of sanctions to allow US transnationals the kind of investment opportunities enjoyed by European, Japanese and Chinese companies. By 2007, sanctions imposed by the United Nations created a situation where European and Asian companies were also prohibited from dealing with Iran, leading to the desperate situation of the last few years.

Promises

In 2013 Rowhani’s electoral success came about because he promised to end the country’s isolation and the asphyxiating sanctions. The implication was that all this would inevitably lead to economic recovery, as Iran is integrated closely into the world capitalist order. It is therefore not surprising that, following the partial success in nuclear negotiations, Iranian capitalists and the Rowhani administration are eager to encourage western investment, with promises of a skilled and semi-skilled workforce at dirt-cheap rates, courtesy of the ‘economic restructuring’ programmes of the last two decades. Since the Lausanne deal in early April, the Iranian president and his ministers have only one item on their agenda: ‘foreign investment’, presented as the panacea for all the country’s economic woes.

As I have pointed out, previous Iranian administrations also presided over market-oriented capitalist economies. As state-owned companies were privatised, the main beneficiaries were regime insiders, so individual clerics, their immediate families, bazaaris, landowners close to the regime, as well as Islamic collectives, including sections of the Pasdaran (Revolutionary Guards), grew super-rich.

The old bourgeoisie keeps referring to this stratum as the nouveaux riches, amidst complaints about their greed, corruption and pitiless exploitation. However, the reality is that all sections of the capitalist class benefited from and relied on government ‘restructuring’ policies to sack workers and re-employ them under temporary contracts. Successive administrations watered down the post-revolution labour legislation in favour of the factory owners. ‘White contracts’, where the worker signs a blank sheet of paper and the employer fills in the contract details, are now the norm.

All this has contributed to a massive gap between rich and poor. The Maserati driven by Shirazi’s grandson cost around half a million pounds - the equivalent of the monthly salaries of 2,500 industrial workers or 2,000 teachers. According to leftwing economist Parviz Raees,

Ahmadinejad supported semi-governmental capitalism - meaning corporations, organisations and semi-governmental military and non-military institutions - against a governmental, clerical and bureaucratic economy. All these factions existed before, but Ahmadinejad’s administration, a conservative administration with radical rightwing economic policies, was trying to strengthen this new faction and create a new layer of capitalists. This layer established itself and took over as the main agent for investments, civil projects, extraction of natural resources, civil-military projects and developmental contracts.

Rowhani’s administration has clearly accepted and recognised the existence, and the interests, of this new group. Right now, the problem is their disagreement regarding a portion of the resources and interests. We can see signs of this disagreement, for example, in [members of parliament] attempting to expose the supposed, not the real, corruption figures.⁴

In recent weeks, the issue of corruption and use of illicit funds (eg, from drug deals) in election campaigns has become a hot topic in Iran. In February 2015, the official news agency, IRNA, quoted Iran’s interior minister, Abdolreza Rahmani Fazli, as saying that political life in the Islamic Republic was tainted by “dirty money”, including from drug smuggling. The minister gave the example of $600,000 spent by one candidate during a city council election as an example. The accusations ahead of crucial parliamentary elections were aimed at the more conservative opponents of the current administration and the minister faced an attack by 30 MPs, who accused Fazli of “undermining the healthiest and most transparent electoral system in the world”.⁵ By late April he was retracting his claims, but the damage was done - the minister’s comment confirms what most Iranian people have long known: the Islamic Republic is institutionally corrupt.

The Rowhani administration has made a number of claims about its policies aimed at improving the economic situation, not least in tackling the spiralling rate of inflation combined with stagnation. However, most of the publicity about the government’s Proposed package to turn stagnation to expansion is waffle. As Ismail Hossein Zadeh points out in Counterpunch, the document “turns out to be disappointingly devoid of any specific guideline or clear policy for economic recovery”. He goes on:

Slightly more than 40% of the package is devoted to a withering criticism of economic policies of the previous (Ahmadinejad’s) administration, which is not only full of factual falsehoods and distortions, but is also dubious on theoretical grounds. The rest of the package consists of a series of vague statements and general descriptions that fall way short of a meaningful economic plan or programme. Reading through the package feels like reading through lecture notes of an academic economist on neoclassical/neoliberal macroeconomic theory, not a policy prescription or an economic agenda.⁶

Rowhani’s economics

Over the last two years the international press and media have concentrated on Rowhani’s foreign policies, in terms of both negotiations with the P5+1 and confrontation with conservative figures internally. Outside Iran very few are familiar with the Iranian president’s economic vision. He is an avid defender of market forces and opposed to state intervention (unless it is directed towards helping the market). In a major speech delivered in August 2014 Rowhani claimed: “The state must stay out of economic activities, and place those activities at the disposal of the private sector ... The private sector understands the economy much better, and it knows where to invest.”⁷

He has written extensively on this subject in National security and economic system of Iran (August 2010). According to this book, the economic hardship faced by the peoples of the third world has nothing to do the global economic order or imperialist exploitation. It is a direct result of their own isolationism and economic mismanagement. So recessions, joblessness and hardship have nothing to do with neoliberal economics.

In other words, Iranian workers can expect little help from Hassan Rowhani. He is opposed to “oppressive” labour legislation (ie, legislation that restricts the freedom of capitalists) and believes that low wages and temporary-contract employment helps promote prosperity. His book states: “One of the main challenges that employers and our factories face is the existence of labour unions. Workers should be more pliant toward the demands of job-creators.” The fact that there are no independent trade unions in Iran and that most of those who have fought to establish them are currently in jail escapes the president’s notice. The book should be read by neoconservatives in the Republican Party - surely they will appreciate many of the Iranian president’s comments.

According to Rowhani,

There is a close correlation between economic development and political stability, which means maintaining dialogue and friendly relations with the outside world. As stable international relations paves the grounds for economic development, economic development, in turn, makes a country more secure or stable, as it makes the country less vulnerable to external threats. Thus, there is a positive correlation, akin to a virtuous cycle, between the goal of economic development and the policy of establishing or maintaining friendly relations with the outside world.

For Rowhani, the man with an eye on the international situation, there are lessons to be learnt from the ‘Arab spring’. Economic misery, frustration with ever-increasing unemployment and a growing gap between rich and poor fuelled the revolt. In countries such as Egypt, Tunisia and Syria the super-rich were identified as pro-western, decadent and anti-Islamic. Yet ruthless repression of the left had created a situation where Islamists, often supported by Saudi funds, could benefit from the political vacuum created when protestors took to the streets, expressing all the frustrations built up over decades.

In Iran, the Islamists have been in power for 36 years and no-one amongst the millions of unemployed or unpaid workers have any illusions about the regime. They have seen how Islam’s version of neoliberal economics works. The youth (some 78% of the population) - at least those not affected by drugs and addiction - can be divided into two categories: a minority who maintain illusions about the west and bourgeois democracy, hoping that full integration into the world capitalist order will bring prosperity; and a majority who reject current economic policies.

Protests

Since January 2015 we have seen a wave of workers’ protests for pay increases in line with the growing rate of inflation, against the non-payment of wages, against employers’ refusal to renew contracts and against mass lay-offs.

According to IRNA, Khatoon Abad Copper workers have gathered with their families on a number of occasions and at times for consecutive days in front of the governor’s office in Kerman province, where they were protesting against threats to their job security. Varamin Sugar Company workers took to the streets in January to stop the closure of the company and the loss of their jobs. Ahvaz Water and Wastewater workers and miners from Tazeh in Semnan province were amongst large groups of workers waging protests over the non-payment of wages, while Iranian cities have witnessed demonstrations by teachers over poverty pay. They refused to attend classes for two days in January and there were similar protests in February and April.

Meanwhile, thousands of nurses from across the country gathered in front of the parliament to protest against the government’s failure to implement regulated rates for nursing services. According to these protestors, although the new health bill has resulted in pay increases for doctors and surgeons, nurses have seen no significant improvement despite a substantially increased workload. This despite the fact that the country faces a serious shortage of nurses - the current ratio is only one nurse for every 1,000 patients.

On foreign trips the president and his foreign minister are eager to tell reporters that there are no political prisoners in Iran. However, those of us who are in touch with labour activists in Iran know otherwise. Despite the sackings and threats, many workers continue to organise and participate in demonstrations, strikes and protests and many are sent to prison. The long list of labour activists currently incarcerated include: Yousof Abkharabat, Sharokh Zamani, Vahed Sayedeh, Jafar Azimzadeh, Jamil Mohamadi, Rasoul Bodaghi, Abdolreza Ghanbari, Muhamad Jarahi, Mahmoud Bagheri, Kourosh Bakhshandeh, and Behnam Ebrahimzadeh.

And, as Iranian workers prepare for protests to be held on May 1, the authorities have arrested a number of labour activists, including Mahmoud Salehi and Ossman Esmaili, members of the union committee at the Vahed bus company in Tehran, as well as the secretary of Tehran’s teachers’ association, Alireza Hashemi.

Workers organising protests face sentences of at least four to five years. Many of those currently held suffer from ill health caused by poor conditions. Political prisoners also complain of kidney pain, gum disease, arthritis and stomach ulcers - all due to torture.

This May Day Iranian workers will demonstrate and celebrate where they can - openly in some major cities, elsewhere by gathering in secret locations. They all have one thing in mind: solidarity with fellow workers in Iran and in other places. In the midst of the ravages of neoliberal capitalism in the Middle East, they are a beacon of hope for all those fighting for secular, progressive and internationalist values.

yassamine.mather@weeklyworker.co.uk

Notes

1. Quote from the Iranian leader’s website: www.Khamenei.ir.

2. http://sahamnews.org/2015/04/280950.

3. www.nytimes.com/2014/06/11/opinion/clerical-rule-luxury-lifestyle.html?_r=0.

4. www.al-monitor.com/pulse/originals/2014/01/iran-parliament-corruption-mortazavi.html.

5. www.ibtimes.co.uk/iran-minister-accused-undermining-democracy-after-drugs-corruption-claims-1490765.

6. www.counterpunch.org/2014/10/17/neoliberal-economics-comes-to-iran.

7. ‘Rowhani explains anti-stagnation economic policies’: www.farsnews.com/newstext.php?nn=13930519000461.