Since the return of US sanctions, the Iranian economy has sunk in an alarming rate and is set to contract by 4.5 percent in the year to March 2020. The currency has lost 70 percent of its value, prices are rising at a 40 percent annual rate, whilst inherent inflation is a constant since before the revolution.
However, a closer look at the data on Iran’s economy does not support the view that the Iranian public has been driven into abject poverty since 1979. In 1995-2011, Iran achieved per capita GDP growth of 8.7 percent, on average, compared to just 2.9 percent in neighboring Turkey. Indicators of individual welfare show similar improvements and the 2018 Human Development Report ranked Iran 60th out of 189 countries, ahead of Turkey (64), Mexico (74), and Brazil (79). Data show consistent improvements in Iranians’ access to basic services and household amenities, such as electricity, clean water and cheap natural gas is now piped into 85% of all homes. The Islamic Republic has worked toward fulfilling some of its key promises, such as reducing poverty, improving literacy and women’s access to higher education and investments were made in infrastructure, health and education.
Economic indicators may have improved in four decades but structural weaknesses and a highly corporatist economy still plague the country’s potential. The private sector is still highly marginalised to small and medium-size companies, whilst oil and gas revenues remain under tight government control. Subsidies and redistributive policies haven’t essentially changed since the time of the Shah, market incentives and economic diversification have only progressed very slowly. Furthermore, approximately 500.000 new people enter the working age every year, creating substantial pressure to the market. Unemployment among university-educated youth, non-existent in the 1970s, has surged to 30 percent for men and 50 percent for women. In the coming decades, this will be translated into pressure on the country’s insurance and healthcare systems. The economic mismanagement, general state of corruption and uncontrollable unemployment leads to a constant brain-drain of highly skilled and educated people. Estimates are that 150,000 educated Iranians emigrate abroad annually, costing the country over $150 billion per year. 
Of course, when it comes to quality of life, economic indicators do not tell the whole story. Better living standards do not make up for the social restrictions that have been imposed since 1979 on anything that could lead the population ‘astray’: control of media, ban on alcohol and musical instruments, compulsory head scarves, segregation of sexes in public places, brutally enforced and controlled by the morality police and the paramilitary Basij force. Over the past decades, the public and the private spheres of the Iranian lives became two very distinct and different realities. In the private sphere, the society has undergone enormous change, women’s veil and social taboos have slipped, and the walls between the public and the private were progressively brought down. The regime would fight back, making arrests and trying to roll back the changes, but increasingly seems to have given up this fight.
In this massive transformation connection to the outside world had a crucial role. Satellite TV and, later on, information technology were main drivers of change and shaped the lives of the younger generations, who use them not only for news and entertainment but also to learn English, breaking the state-imposed isolation. Mobile phones and social media, especially Instagram which is not blocked in the country, also became a means of documentation of state repression, as was evident in the Green movement protests in 2009, whilst the people have mastered the art of circumventing government restrictions on Facebook and Twitter. “Social change is no longer just measured by how much hair women show but how much you can download and share online.” 
The youth, more than half of the country’s population, have developed completely different references and values than the generation of their parents. Whilst the latter sought social justice and a powerful country, not submissive to major powers, the Iranian millennials are less ideological and seek more personal freedom and better economic opportunities.
Politics, though, are a different story. Human rights violations, arrests and serious crackdown on dissent and to any form of freedom of expression have been the rule rather than the exception in the past decades, and those who voiced criticism or opposition to the regime have paid the price. The wide Green movement protests of 2009, the largest since 1979, were violently suppressed, whilst a growing number of opposition figures have been under house arrest since 2011. The release of activists and political prisoners was at the core of the presidential reelection campaign of Hassan Rouhani in 2017. To the contrary, Amnesty International denounced more than 7,000 arrests in 2018. This one, along other promises for political freedom and inclusion of minorities, women and reformists to his administration were quickly forgotten after he gained a second term.
Despite his critical initial tone towards the system, Rouhani also failed to stand up to the ultra-conservative clergy and went along the dictates of the Guardian Council, the unelected body that has the last word over all legislation and vets all candidates for office. Rouhani’s new ‘pragmatic’ profile is seen as his effort to remain relevant and be less confrontational with the clergy, as his aspiration to succeed Ali Khamenei as Supreme Leader is well known.
However, he faces criticism both from the conservatives he tried to court, who accuse him for the economic crisis, and the moderates that he let down. Although Rouhani is neither the only nor the primary one to blame for the country’s woes, the people despair at the resilience of an inefficient system that rejects any change, as well as the complete lack of any credible political alternative.
For the ultraconservatives, a reform of the system would mean the loss of privileges and thus is the greatest nightmare. The picture is not different within the Iranian clergy, where divisions run deep and the current debate concerns the nature of the religious political activism. Hard-liners and right-wing ayatollahs who seek a more ‘revolutionary’ role for the clergy and dread the ‘secularisation’ of the country have attacked Rouhani too, reminding him that Iran is an ‘Islamic Republic’ and not one of ‘secular democrats’ when he spoke about major issues such as the freedom of press or the veil. The abyss between the country’s rulers and those they rule was apparent in the nation-wide protests in 2017. “The head of the Guardian Council, Ahmad Jannati, is a 90-year-old regime ideologue, while 90 percent of the protesters arrested in recent days have been under the age of 25.”
On the military establishment side, the mighty IRGC force or the ‘Guardians of the Revolution’, take a tougher stance towards Rouhani, accusing him for not having the ‘management skills needed to curb the outside pressures’. The attacks are not new, but underline the fear of the elitist force that Rouhani may make concessions to the Europeans concerning the missile programme and the Shi’i militias in the region, both of which come under the direct control of the IRGC. Yet, it seems as the IRGC wants to avoid a direct confrontation with the president and would prefer to hide behind the most right-wing clerics, whilst undermining any effort towards a détente with the West.
Foreign minister Javad Zarif’s resignation – which he announced on Instagram – is a telling example of the complexity of Iranian politics. It was precipitated because of his notable absence from unannounced meetings between the Supreme Leader Ali Khamenei and President Rouhani with Syrian President Bashar al-Assad, but in the presence of Qassem Soleimani, the Commander of the Quds Force, IRGC’s elite paramilitary arm, just minutes away from the Foreign Ministry complex in Tehran. This immediately raised questions over who controls Iran’s foreign policy, Javad Zarif or Qassem Soleimani? The IRGC or the government?
It was widely presumed that the hard-liners had won and that the country would become even more isolated with the loss of a moderate voice at the head of its foreign policy. However, Zarif’s calculated risk paid off as the president rejected the resignation, dealing a blow to the ultra-conservative camp. Soleimani’s immediate move to back Zarif restored the balance between the two most popular officials in the country, who represent the two faces of its foreign policy, the western-friendly and the regionally adventurous.
Regional adventurism is a result not of ideological expansion but a calculation of the country’s interests and perception of threats. Iran’s meddling in Iraq, Lebanon, Syria and Yemen was crucial in keeping threats outside the country’s borders and gaining leverage, and its pursuit of the ballistic missile programme falls within the exact same logic. But the regime’s effort to fill security vacuums in its own interest and based on its perception of power and stability have an increasing cost both in economic and human capital terms and in recent protests, slogans such as “Not Lebanon, not Syria, I would give my life for Iran” clearly showed that young Iranians reject this adventurism.
Links last accessed on 30/03/2019.
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 Erdbrink, Thomas, “The Iran Revolution at 40: From Theocracy to ‘Normality’”, The New York Times, (10/02/2019) https://www.nytimes.com/2019/02/10/world/middleeast/iran-revolution-40.html
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 Imbert, Louis, “L’Iran va mal, mais la Répubique islamique ne s’écroule pas”, Le Monde, (11/02/2019) https://www.lemonde.fr/international/article/2019/02/11/il-n-y-a-pas-d-alternative-politique-en-iran-c-est-un-constat-largement-repandu-dans-le-pays_5422090_3210.html?xtmc=iran&xtcr=25
 Vatanka, Alex, “Why Iran’s protesters are so angry with Rouhani”, Foreign Affairs, (08/01/2018) https://www.foreignaffairs.com/articles/iran/2018-01-08/why-irans-protesters-are-so-angry-rouhani
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 Barzegar, Kayhan, “Persia is Back, But in a Different Form”, The Atlantic Council, (28/01/2019) https://www.atlanticcouncil.org/blogs/iransource/persia-is-back-but-in-a-different-form