There are several reasons Iran’s economy hasn’t taken off in the way Rouhani had promised. For one, uncertainty over the fate of the nuclear agreement in the United States has given pause to U.S. companies that might otherwise want to invest in Iran; European companies are nervous that if the U.S. withdraws from the agreement, U.S. law will then target international companies that invest in Iran. The Trump administration maintains the agreement is deeply flawed, and that it does not address many concerns about Iran’s missile program, its support for militant groups, its human-rights record, and its military adventurism in Yemen, Syria, and other places—actions the U.S. says diverts money away from the Iranian public. Supporters of the nuclear agreement say the accord was not meant to address those issues. They say sanctions against Iran for those activities remain in place.
But perhaps more important than the uncertainty over the agreement are Iran’s own demographics. Half of all Iranians are under the age of 30. More people are entering the workforce each year than jobs exist or are being created. This all but ensures that a country with near universal literacy—with no gender disparity—will continue to have double-digit unemployment for the foreseeable future. [...]
The protests were able to spread because of, among other things, the penetration of the smartphone—more than 40 percent of Iranian households have access to at least one—which enabled Iranians to use messaging apps to spread the word about the demonstrations. Although the protests spread to Tehran, the capital, they never really took root there. They have also mostly fizzled out elsewhere largely because of the government crackdown. These demonstrations did not come close to the scale of the pro-democracy protests of 2009 that were crushed by the regime. They had no obvious leaders and no clear demands and, as Barbara Slavin, director of the Future of Iran Initiative at the Atlantic Council, wrote, they came “largely from the regime’s working-class base, not the effete wealthy of north Tehran. They are demanding cheaper food, more jobs and less government corruption.” [...]
This is ultimately what could imperil the Iranian regime. Rouhani’s economic promises have yet to materialize. This gives his government hard-line critics ammunition. The protests, as Ray Takeyh, a senior fellow at the Council on Foreign Relations, noted in Politico, have weakened the president. Khamenei and the hardliners view Rouhani and his supporters, he wrote, as harbingers of popular insurrection. Come the next election, in 2021, Khamenei, who has ultimate say over who can run for office, might grant his imprimatur only to hard-line candidates, leading to another period of political repression and economic hardship. All this as Iran’s population continues to grow, with few new jobs, and more international isolation.
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