IRANIAN LABOR LEADER PREDICTS ECONOMIC CRISIS

Last week Dissent published my interview with Homayoun Pourzad, the pseudonym for a leader in Iran’s labor movement. He had too many interesting things to say to fit into the article. So as a supplement to that piece, I wanted to share his dire predictions for Iran’s economy:

Eidelson: So what are we going to see happen with the economic situation in Iran over the next few months?

Pourzad: Even with rising oil prices, the government is not going to have enough money to continue cash subsidies.

In late autumn last year, the government slashed about 65% of all subsidies. The subsidies were a huge part of the economy and the GNP – they subsidized staples like bread, electricity, water, telephone, and – most importantly – gasoline. So these staples were available at a fraction of their actual cost, and the government paid billions and billions for this. Last year Ahmadinejad axed most of these subsidies. But because the government was afraid of a major social explosion, they went around and paid half of the proceeds in direct cash subsidies. So each person got about $43 a month.

But this was a temporary thing, there’s no way the government could keep doing it, and they are running out of money this year. That’s going to anger many people. Plus factories have been ordered to hold off layoffs, and not to raise prices on their products, so there’s a price freeze across many different industries. So these two issues are coming to a head across the next few months.

The government cannot continue with this game. You have market forces at work. It could be in 3 months, or it could be in 5 months. Then once this happens there’s going to be a huge inflationary wave. Because inputs are more expensive, everybody will have to raise prices. We literally have millions of shopkeepers in Iran. These guys will raise their prices because the energy bills are higher, the products will get more expensive, and there’s going to be massive layoffs because factories cannot afford to have this number of workers. So there’s going to be an economic crisis very soon on top of the recession that’s been going on for a couple of years.

Eidelson: How is that related to the privatization?

Pourzad: There is downsizing going on as always with privatization. These companies are changing hands from state managers to former state managers, like what happened in Russia 18 years ago. These guys are not interested in production – they’re interested in making a quick buck. So what they do is they liquidate companies, liquidate factories, or use the special exchange rates they have to get cheaper dollars and then go around and sell. So privatization is making things worse, no question.

But the worst part is that it’s increasing the wave of contract work, because companies can claim that they’re going to have new contracts, so they’re not going to go with permanent workers. They’re going to go with contract workers, which don’t have any rights. Not only hasn’t the efficiency improved – which is the logic behind privatization usually – the efficiency is just as awful, but there are all these other side effects, so it’s been a disastrous thing for the working class, although many people have become very rich in a very short period of time.

Read the Dissent piece <a href="here.

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3 thoughts on “IRANIAN LABOR LEADER PREDICTS ECONOMIC CRISIS

  1. Hi, I have read your previous interview with this person and I have some questions.

    1) He claims that Iranian regime has NO mass support. He gave NO proof. You seems to agree with it. Do YOU have some proof or you simple believe in words of “greens” who gave NO proof either?
    2) He claims that sanctions against Iran by USA are more or less=sanctions against aparteid SA. He gave NO proof. Have YOU any proof?
    3) He claims that Obama is NOT so bad to Iran and even good, while Iran is very aggressive against USA. He gave NO proof. Do you agree with him? If you are, where is YOUR proof.

    You see, I get it – you want union’s victory to Iran. I would like it too. But I like the truth even more – simply because I do NOT want to fool myself.

    So, could you pretty please give me some FACTS to found the words of your Iranian friend? I am sure a lot of people in USA would lap your interview and ask for more. But given what is the state of Labor in USA and what role it usually plays on the service of USA imperialism, it would be nice to write something not only for USA readers.

    Thanks

  2. Lidia,

    1. Pourzad doesn’t claim the regime has no popular support. The willingness of large numbers of Iranians to risk their lives to protest against the regime shows there’s substantial popular opposition.
    2. The comparison Pourzad makes to South Africa is that most people he talks to in the labor and/or democratic movements “wish they [sanctions] would hit the regime harder, just like South Africa. So that shows the extent of the gulf between the people and this regime.”
    3. Pourzad argues that by avoiding threats of military action against Iran or calls for Iranians to support the Green movement, Obama has made it harder for Ahmadinejad to delegitimize the protesters as agents of America or rally the country behind him by invoking a threat from abroad. I agree.

    Also of interest:
    http://www.hrw.org/en/world-report-2011/iran

  3. Thanks

    1) “Green revolution” is made by stencils of other “colored revolutions” – i.e. by CIA’s ones. Of course, a lot of people, including workers are AGAINST Iranian regime from the left, but “greens” are NOT part of them. They ARE well-to-do, and I VERY much doubt that ALL workers agree with P regarding them.
    2) I got WHY he compared Iran to racist aparteid (and supported by USA and Israel) state, but I do NOT believe that the majority of Iranians agree with him. I suppose he is wishful thinking, or worse. YOU do not saying a word about it just so not helping
    3) Obama getting praised by P is the best reason to me NOT to support P, and P’s ridiculous words about Iran being aggressive against USA one more time have not been mentioned by you as a typical piece of imperialist/Zionist propaganda. I could believe, thought , that P is really a Labor leader – if such, he is in the same nice company as Walensa, who brought SO much good to Polish workers. W was also supported by USA prez – the great friend of USA workers too (esp fight controllers) and by the great friend of UK miners – aka PM of UK. I just hope that, unlike in Poland, P and his friends – from Obama to “greens” would NOT success.

    By the way, USA Labor had NOT helped victims of Reagan, but was eager to support “labor rights” all over the world – hand in hand with CIA. I guess Iranian workers are aware of such wonderful history.

    Now, please spare me the preachers from HRW – the same HRW that are SO timid about Israel, SA or other pro-USA criminal regimes, but happy to heap dirt on Venezuela.

    Not mentioning that HRW is a creature of such great friend of workers as Soros.

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