Iran must address the emerging discontent

The regime faces no danger, but it needs to review its domestic and foreign policy

Iran is experiencing the worst urban unrest it has faced in four decades. Its interior minister admitted 29 out of its 31 provinces were affected. In Mahshahr and Shiraz, the government brutally killed hundreds because it lost control of these cities. Outwardly, the unrest was triggered by an overnight decision to massively increase domestic oil prices to help bridge a government deficit. The deficit, in turn, was caused by a depression: The International Monetary Fund says the economy shrank 9.5% this year.

Iran’s periodic public protests are no longer middle-class students asking for freedom. They are increasingly led by unemployed working and lower-middle class youth, once the social base of the Islamic revolution. While the regime is in no danger of being overthrown, Tehran needs to weigh the costs and benefits of its actions at home and abroad. Sanctions may have hurt its economy, but domestic policies are even more harmful. It has failed to diversify away from oil at a time when the sheen is off black gold. Its religious foundations and regime militia have a parasitical hold on as much as a third of the economy. Even more damaging to foreign investment than sanctions is Tehran’s constant habit of flouting contracts — a practice that puts off even Indian firms.

Iran’s foreign policy is also questionable. Tehran can claim to have massively expanded its influence across West Asia. But this informal empire is secured with militia, and is causing blowback from other regional powers. Polls show rising anti-iranian sentiment in the Arab Sunni world. How this benefits Iran at a time when its home front is in a shambles is a question. The announcement of the priesthood’s Guardian Council that it would seek to be more inclusive in its choice of parliamentary candidates this year is a small but positive step. If Iran’s Islamic revolution is to thrive, it needs be less about Islam and revolution, and more about modernity and governance.