The Forum for Partners in Iran's Marketplace

June 2020, No. 94

Q & A

Convergence of Threats,
Divergence of Tactics

I think the issues that threaten stability and security most, are naturally bigger concerns.

Iranian economic activists believe that the economy has been caught up under the political spectrum and is getting tougher in the current situation. However, despite the poor social conditions and the pressures on the people and the economy, the capacity of the Iranian economy is still large enough to open as a springboard and experience double-digit growth rates at least for a couple of years. They believe that one can still not be concerned about the business environment and still not regard the complex corridors and tastes of economic management as a declining factor for economic growth, but now, in the current situation where the playground has gone from economics to politics, one cannot help worry about political approaches dominating the country because it is easy to solve the problems facing the economy. Although these points have been underlined for many years but no one seems to be listening.

But what has brought concern to different levels of society and narrowed the gap between the demands of different segments of society is the political situation in the country. Pedram Soltani, an economic activist, says: ďThe problem is that economists are so far from the ground of economics that they have to shift their demands from economics to politics and security.Ē Now, economic activists have found some kind of convergence with all segments of society, with workers, retired, teachers, university instructors, youth and all different segments because these problems are all common.


The situation in the country today is such that it seems things are going to get worse and the economy is not only no exception but also fragile due to the loss of security and confidence. If you look at the problems and disasters of these days of the market, businesses and the economy of Iran in general, what are some important points you can cite here?

I think the issues that threaten stability and security most, are naturally bigger concerns. The events that took place in November 2019 shocked all people and different sectors, including economic activists. The unrest raised serious doubts among economic activists that despite the stability and security we claim to exist in the country have the hard days arrived and whether there is disruption and if these events can trigger heightened unrests and protests or is it possible to manage this situation and restore peace to the society? In my opinion, domestic protests and discontent, as well as conflicts and movements outside Iranís borders, whether from our neighbors or in a dispute with the United States, have become the most important threats to the country and everyoneís concern today, including private sector activists. This has also affected and even lowered the priorities of other sectors gradually, and is getting bolder and bolder every day.


What news and events put the most pressure on you as a private economic activist during these tough days?

For me, the most annoying news was that some of my compatriots were killed. This is the peak of internal collision that civil protests end up in the death of citizens. Anyone can extend this to the future because the cause of this unrest has not been removed from the country. Our economic problems are getting tighter and tougher. Those segments of the society that were dissatisfied and have political and social demands are still unhappy because the cause of their opposition has not been removed. So this part I believe is the worst news Iíve heard these days. Afterwards, news of the public protests is a major concern, as 60% of protesters in the streets were confronted with serious economic problems during initial surveys.

From within these protests and even the victims we heard words that many of these protesters had severe economic deprivation and even food deprivation. There are images of people complaining even to the police officers telling them they had no money. They said they could not provide for their familyís basic needs and things like this that brought pain to oneís heart.

Some may think that these are not their problems and their pains but we are all human beings and the problems of others affect us. But if we look deeper into these damages we will realize that exacerbating these conditions can lead us all to be indifferent and say, well, I donít have that pain. This is shortsightedness.

When problems arise, as they do on the street, it can stir up the whole city and make life in this city and other cities and the whole country very difficult and sometimes impossible.

Even these conditions can exacerbate insecurity and make anyone vulnerable even the most affluent people. Even if we do not have a humanitarian look, there is a danger that with the personal look of everyone, the problems of the street floor will also put him in trouble.

The next issue was the impact of business in the country. Certainly, the Internet cut was another factor for the decline in security of the people, including economic activists; in the sense that today, many public services and many businesses are connected to the Internet and virtual communications, and the infrastructure of the Internet is imperative. When the state simply cuts the Internet and deprives businesses, economic insecurity, along with social insecurity, becomes more evident. In the past few days, unfortunately, I have heard a lot of news from people who are going through technology, such as the young startups, programmers, etc. Some of them are extremely skeptical about their work and also intend to emigrate and some are planning to close their businesses. Many have sustained great losses, and these conditions have destroyed their capital.

The problem is that economists are so far from the ground of economics that they have to shift their demands from economics to politics and security.

So blocking access to the Internet has had great implications going beyond numbers. The daily loss was estimated at between $60 million and $180 million, but I think the damage is much larger because it either stopped many investments or reinforced the whispers of a halt. It also enabled many capitals to migrate across borders. We have a new wave of capital outflows. One of the reasons for the increase in the exchange rate is the increased demand for leaving the country. This foreign currency is not provided in the NIMA system, but rather from the bottom of the market, and is outside the Central Bank of Iran (CBI)-approved network and is likely to affect the free market exchange rate. One must conclude that people are migrating and moving their capital across borders.


How Do You See Future Economic Trends?

Unfortunately, I donít see good prospects. I open a bracket and explain: When the economic conditions and business environment of a country are good, business activists and business managers are mainly focused on resolving their business problems. When the economy is in trouble, business executives come together in different fields to try and identify their problems and work together to achieve a collective result.

As the problems get worse and worse, at a higher level, various economic activists would try to resolve their problems in a larger body, such as the size of the chamber of commerce, with bargaining power and with a louder voice. But when the problems go even further, other economic activists have to join all segments of the society in order to overcome the dangers and problems that are threatening the whole country. We have gone through three phases. The problem is that economists are so far removed from the economic land that they have to move their demands from the economy to the politics of the land.

The problem is that economists are so far from the ground of economics that they have to shift their demands from economics to politics and security. Now, economic activists have found some kind of convergence with all segments of society, with workers, retired, teachers, university instructors, youth and all different segments because these problems are all common. I mentioned these issues because I believe that the bigger problems become, the more frustrating the prospect becomes.

Without having to go through all of my analyses, I myself or any other economic activist would say unconsciously that we see a vague, worrying, highly uncertain prospect with no promising spots and no news that could lessen this deterioration. The situation is so frustrating that we have both intricate and multilayered issues, both in terms of political structure and economic context.

In economics, for example, there are collections that should not have existed. The complexity of the economy is enormous. Also, in the social demands of different strata the demands have been accumulated and the government has had a kind of decades of inertia that the demands of the strata have not been met in a consistent and logical manner. So this multiplicity of large and massive accumulated demands has now made it so difficult to solve. This is just the internal situation. As far as the region is concerned we are in a condition that our neighbors are holding the sword on against us. We have had ideological competition with Saudi Arabia and the UAE all these years, or we have had differences of taste and strategy.

We have had fundamental issues with the Israeli regime, but today we find these countries very openly opposing us, using every podium to explicitly criticize Iran. Recently, they have no fear to pressure Iran. We havenít heard these words and speeches openly, even in the last three or four years. But now it has happened. Or in the countries that have been our allies protests and uprisings have taken place that show they can no longer be easy and close companions to us.

It is our regional conflicts that have become apparent. Unfortunately, one must admit that there has been a convergence against Iran, where external pressure, including US pressure, is effective. Extracurricular pressures, that is, American pressure, have reached unprecedented levels. America has never had such a difficult confrontation with us in all aspects in history. And we see that this conflict is following a deteriorating course. I had previously stated in a note that we were in a situation where we were faced with a convergence of threats and divergence of tactics. It really happened. Threats have now converged, but the measures are island-wide and far-fetched.


How do you see the prospects given the recent problems in the country?

The best news is resolving our most fundamental problems. They will cascade their own positive impact on other issues. If our basic problems are resolved, the main knot in this confused coil will open, and the coil will slowly open and its strings released. In my opinion, since our problems with the economy have entered politics and security issues, we must first resolve the problem in the field of politics and then move on to reforming the economy.

The fact is that this situation has to be looked at in a structured way. In my opinion, the good news is to see first of all that the state has decided to hold a passionate free election. This may sound strange to you, but in my opinion the most important thing that hurts our security is the accelerating process of declining public trust. It is important to minimize social capital. We are in a situation where the governmentís hand is largely locked in economic tools and it must turn to social openness and domestic issues.

This does not need to cost local currency but requires passionate and costly characters to make the decision. A free election can reverse the flow of hope and confidence in the country to a positive one, stopping the destruction process first and then gradually rebuilding it. The good news is that we have decided to fundamentally reform the structure of government. With the fundamental reforms of the decision-making system, it is forced to change course.

Some of these changes require a constitutional amendment, and some require tough decisions at high levels of the establishment. Some also need convergence at the intellectual level of the country: Convergence between thinkers and pundits, not necessarily political activists. So by activating these people they can act as the countryís wisdom peak. If these two events occur the next good news will be resolving regional and international disputes. Our issues are fully manageable with our neighbors and with the US. The day we donít hear people and senior officials from the state speak of America, Britain, Saudi Arabia and Israel, I think we are on the path to recovery that day.


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  June 2020
No. 94