A New Phase of Neoliberalism in Iran: The Untold Story of Iran’s “Moderate” Government

An Iranian economic delegation, headed by Economic Affairs and Finance Minister Ali Tayyebnia, held intensive talks with their counterparts from other countries on the sidelines of the joint annual meeting of the World Bank and the International Monetary Fund (IMF) on October 11-13.  The talks followed the little noticed meeting between Iran’s new president Hassan Rouhani and IMF chief Christine Lagarde.

The privatization trend in the Islamic Republic of Iran is entering a new phase, which is an important story.  Unfortunately, it has been drowned out by a heated “debate of the month” in the mainstream Persian media within Iran (from pro-Rouhani, neoliberal, religious reformist dailies to the “Army of the Guardians of the Islamic Revolution” papers, which mainstream Western media used to call  “hardliner”) and in the Iranian diaspora (Persian satellite television channels such as BBC Persian, VOA, etc.).  This debate is all about the Rouhani-Obama story, plotted around the new round of nuclear negotiations between Iran and the “international community.”  But what about the Iran Chamber of Commerce, Industries, Mines, and Agriculture (ICCIMA)?  It is in this organization and in these sectors that what really matters to workers has been happening.

Significantly, former head of the Chamber of Commerce Mohammad Nahavandian, a U.S.-educated neoliberal economist and politician, has been appointed chief of staff to Iran’s “moderate” new president.  Nahavandian, who is also former head of Iran’s World Trade Organization commission, is one of former president Hashemi Rafsanjani’s pawns populating the Rouhani cabinet.  Along with other adept diplomats of the Supreme Leader, Ayatollah Ali Khamenei, he is expected to be a prime mover pushing Iran further into the aforementioned new phase of neoliberalism.

The Rouhani administration, the eleventh Iranian government tasked to “solve” the crisis of capital and social exclusion, is focusing mainly on international politics as well as the domestic economy.  With respect to international politics, it is indeed interesting to watch Israeli Prime Minister Benjamin Netanyahu now pathetically being upstaged by the banality of pro-Obama U.S. think tanks, their Persian pundit factotums, and assorted Islamic Republic “experts” on the air, who now have a friendly minister of foreign affairs in the Rouhani administration, a man named Zarif, whose name means “intelligent and graceful” in Persian and Arabic and perfectly matches his diplomatic persona.

In any event, Rouhani’s (and, it is appropriate to say, the capitalist system’s) global neoliberal economic outlook in itself may remove many barriers in Iran-U.S. relations and reduce the dispute between the two countries to their divergent political visions for the region.  However, Iran as seen from the outside is not the subject of the present article.  In a great many reports on Iran, the Islamic Republic is reduced to its foreign policy and particularly to its verbal attacks against the United States.  At the same time, many analysts are paying a great deal of attention to Barack Obama’s barefaced insistence (aside from his rhetoric) on having the United States remain “the world’s police.”  All of this makes the public unaware of the rest of the story, both on the right and regrettably even on the “left,” which is all too often more concerned with the Islamic Republic’s external posturing than with class relations.  Meanwhile in Iran, labor activists are still behind bars, independent labor unions remain illegal, and labor markets are being made more “flexible” as the already inadequate labor laws are becoming more lax and privatization is being expanded.  This is the “swamp of stability” as described by Sohrab Behdad, the author of Class and Labor in Iran; Did the Revolution Matter?  One has to understand that Rouhani’s and Rafsanjani’s gabble, and that of the horde of their like-minded supporters within both Iran and the diaspora, on the societal need for capitalists as emergency job creators is a discourse of and for power.  This discourse is nothing other than a deeply ideological defense of the inequality of power between the owners of capital and the labor force in contemporary Iran.

At the end of the day, the point that gets lost amid the recent hoopla over Iran in the mainstream media is where the Iranian left — or more appropriately the Iranian Marxist forces and their potential constituency, the third side as described by Nasser Zarafshan, a prominent Iranian Marxist jurist and my attorney in Tehran — will stand during the coming upheavals that the neoliberal government and its neoliberal pro-West opposition of all kinds have in store for us.  That is the focus of this article.

Government or the Executive Committee of the Iran Chamber of Commerce?

What is left out of mainstream discussion but needs urgent consideration is the untold story of the neoliberal agenda in Iran today.  This story is similar to those in many other countries in the capitalist world: the mysterious secret of government that is supposed to represent all the people and groups lies in the dirty hands of the Chamber of Commerce, the most powerful entity in the private sector.  Thus it raises the question: Is this a government or the executive committee of the Iran Chamber of Commerce?

As we are all aware, in recent decades many countries, under IMF and creditor pressure, have privatized their retirement systems.  In Iran, the greed of the emergent bureaucratic Iranian bourgeoisie is at the root of efforts aimed at privatizing Social Security.  The widely-held assumption that the private sector has little power in Iran is untrue.  The main objectives of Iran’s privatization program were defined in various five-year development plans.  Fariborz Raisdana, a prominent Iranian Marxist economist who criticized government-subsidy cuts1 by Mahmoud Ahmadinejad’s administration and spent one year behind bars, specifies that 90 percent of imports, 25 percent of exports, and 48 percent of investments are by the private sector.  Moreover, 95 percent of the country’s housing has been built by the private sector.  Nineteen percent of the country’s agriculture belongs to the private sector, too.  Rouhani’s government, like the previous ones, is bent on undermining social security for the interests of merchants and the Chamber of Commerce.

Against the Amendment to the Social Security Act, in Support of Workers

Just as the game gets serious, the true intention of the “international community” having been revealed to be bringing the people of Iran to their knees, we find that Iran’s government itself is also pursuing the prescriptions of the IMF and World Bank, prescriptions that are against the interests of ordinary people, especially the working class.

Now, in line with neoliberal policies, the Islamic Republic and its Social Security Organization (SSO) have initiated another attack against the Iranian working class in the name of “reform” by a “moderate” government.  The SSO is a governmental social insurer in Iran that provides coverage for wage earners and salaried workers, as well as voluntary coverage of self-employed persons.

This dangerous amendment to the Social Security Act clearly includes changes against the interests of the working class, as noted in the recent statement, signed by 165 Iranian leftist activists, writers, journalists, students, and academics in Iran and the diaspora, titled “Declaration Against the Amendment to the Social Security Act, in Support of Workers.”  Here are a few examples:

* Increase in minimum retirement age and minimum years of creditable service for general workers and hard and/or hazardous job employees

In footnote 2 of the amendment to Bill 36, it is implied that the SSO could gradually increase the minimum retirement age and the minimum years of creditable service for retirement up to five years.  Raising the retirement age means increasing hardship for workers before retirement, higher pension contributions, and lower fractions of salaries paid to workers post-retirement.  This bill is designed to diligently serve to increase the SSO’s capital through the accumulation of workers’ pension contributions as a source of its income.

* Increase in workers’ pension contributions

As per Article 17 of this amendment, employees will have to pay 9 percent of their salaries for pension contributions.  This is an increase from 7 percent in Article 28 of the current Social Security Act.  The 2-percent increase in workers’ pension contributions means a reduction in the government’s commitment regarding workers’ compensation plans, and therefore, from a more general perspective, it means a decrease in workers’ purchasing power in today’s crippling inflation.

* Decrease in health coverage

The decrease in the health coverage provided by the SSO and the introduction of additional costs to those insured also translates into decreased benefits for workers: the number of times that each worker could use the health service will be limited, and workers face pressure to limit their medical center visits per year or else they will be charged fees.

* Privatization of the medical centers working under the SSO through transferring the centers’ managing teams to the private sector

Footnote 5 of Article 34 of the amendment obliges the SSO to transfer the management of the medical centers working for the organization to the non-governmental sector.  All over the world the reviews done on similar “reforms” show not only that the privatization of medical centers is a direct attack on the health and safety of workers but that it will result in the exclusion of a major part of the community from healthcare services.

* Transfer of the state’s responsibilities in the field of public healthcare to the SSO

* Giving certain powers to the government in making the decision regarding payment or non-payment of the 3-percent government share of pension contributions

All these changes are being proposed at the very time when the governmental institution called Social Security Organization, which was established for the single purpose of providing compensation and insurance for the insured workers and retirees, has been transformed into a financial agency.  The SSO’s share capital is estimated at 120 billion toman, and annually the SSO Investment Company pays a 3-percent profit to the pensioners and retirees of the SSO, though more accurate numbers are somewhere between 18 and 24 percent (based on communiqués from the Board of Trustees).  This share capital was not created overnight; it has been built up by the accumulation of workers’ contributions collected penny by penny by the SSO on a monthly basis.

This blatantly anti-working class bill, to be introduced in the Parliament to be passed without debate, will change the fate of 36 million insured main beneficiaries and their dependents.  It is an attack not only on the livelihood of permanent and temporary workers, but on their health and retirement.

The signers of the statement mentioned above, a group of Iranian communist and other leftist activists and intellectuals within Iran and the diaspora, strongly oppose this amendment, as they believe it will lead to further destruction of the livelihood, health, and future of the working class.  In addition to firmly opposing privatization in general, the statement especially condemns the enforcement of the policies aimed at the privatization of medical centers as a clear attempt to exclude the general public, not just the 36 million insured, from the services provided by these centers.  The signers also oppose the government making the retirement of workers in hard and/or hazardous jobs subject to preconditions like a “4%-premium to be paid by the employer,” an unacceptable maneuver which they believe will cause the workers to fall through the cracks in the future.  They insist that the passing of any bill or amendment about labor must be done based on direct consultation with workers and their real representatives.


1  The Iranian government implemented the so-called “targeting of subsidies” law during the past few years, causing Iranians to pay higher prices for energy and food staples.  The government gave cash benefits to households to help them adjust to the higher costs of everyday needs.  The plan was criticized by many experts who predicted rising inflation and hardship for the working class.

Soheil Asefi is an independent Iranian journalist in Berlin.  He left Iran some years ago after a ten-year professional experience at major Iranian media outlets.  In 2007 he was imprisoned in Iran and was released on bail.  He came to Germany as a guest of the City of Nuremberg under the “Writers-in-Exile” project funded by the German PEN Center.  He is a recipient of the Hermann Kesten Award in Nuremberg.  He can be reached on Twitter and Facebook.

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