Over the past week, protesters have taken to the streets in south-western Iran, chanting anti-regime slogans as they demand greater access to water for drinking, their farmlands and their cattle.
The demonstrations in places such as Ahvaz, Shadegan and Susangerd in the province of Khuzestan come on the back of recent protests in cities including the capital, Tehran, and Kordkuy, about power cuts — the worst since the war with Iraq in the 1980s — where Iranians chanted “down with the dictator”. At least one person has been killed in the water protests, a death the government blames on rioters, not the security forces.
The depth of anger over poor utility services reflects in part Iranians’ sense of betrayal by the revolution that created the theocratic state in 1979. Famously, the founder of the revolution, Ayatollah Ruhollah Khomeini, promised rejoicing Iranians that “we will make water and electricity free for the poor”.
Many Iranians see cheap utility costs as their birthright. “We are a rich nation and sit on the biggest wealth. But this wealth only benefits those linked to the regime,” said Zahra, a 36-year-old housewife. “Everyone should equally benefit from natural resources.”
As a result, politicians are loath to cut subsidies, which the country can ill-afford and are some of the most generous in the world. With water and electricity hit by rising consumption and the worst drought in half a century, utilities had become a natural outlet for political tensions, analysts said.
“A non-political field such as the electricity sector is seen by people as an area where they can pursue their political demands,” said one. “It is impossible to cut subsidies because [people are poorer] and people do not trust officials and reject any shift in the subsidies system.”
The government of Hassan Rouhani — who will be replaced by Ebrahim Raisi on August 4 — tackled power outages by reducing industries’ working hours, cutting electricity exports to Iraq and cracking down on bitcoin mining. While this contained public anger about power shortages, at least temporarily, it also hit an economy suffering from crippling US sanctions.
Donald Trump pulled the US out of the nuclear deal with global powers in 2018, imposing the toughest sanctions yet on the republic. Negotiations between Iran and the deal’s remaining signatories — the UK, France, Germany, Russia and China — are intended to broker an agreement that would lead to the US rejoining the accord and the removal of sanctions.
With or without sanctions, there is no easy solution for a country that — by the estimate of Arash Najafi, deputy head of the energy committee of Iran’s chamber of commerce, and other analysts — offers subsidies totalling $100bn annually. The International Energy Agency, in its 2020 report, said Iran led the world by paying 4.7 per cent of its gross domestic product in energy subsidies.
While Rouhani tried to reduce consumption, Iranians’ demand for electricity has shot up to a record level of almost 66,000MW this year while production is no more than 55,000MW, according to official figures, in part because of intense summer heat.
“Mr Rouhani rightly decided to slow down his predecessors’ policy of constructing power plants . . . and instead curb rising consumption,” said Alireza Asadi, a deputy for research at Iranian Electrical Industry Syndicate, the biggest NGO in the electrical industry. “The government, however . . . failed to convince people to consume less.”
With consumption growing at an average of 5 per cent, Asadi said production was growing annually by only 3 per cent. So great were the subsidies that Asadi estimated that domestic consumers and industries paid only 15 per cent and 30 per cent of the true cost of electricity respectively.
As the pandemic has further devastated the economy, Iran claims it has delivered on the revolution’s promise and has not charged a third of the population, its poorest, for water, electricity and gas over the past year.
This adds to the economic challenges faced by Raisi, who analysts doubt will tackle subsidies. “The next government [of Raisi] will probably go back to the policy of constructing power plants without daring to roll back subsidies,” Asadi said. “If any government increases electricity prices, it should go and hide at home.”
Unless the ground is prepared for subsidy cuts, “whatever we do would have too many social costs”, said Iran’s oil minister, Bijan Namdar Zanganeh, this month. Uppermost in officials’ minds is the memory of the protests in November 2019, triggered by Rouhani’s decision to increase petrol prices by 50 per cent. Hundreds were killed after huge anti-regime demonstrations.
Raisi, whose victory in June was marred by the lowest turnout ever in a presidential poll and the decision to bar his main reformist rivals from running, has previously blamed power cuts on a lack of investment and promised to boost domestic production.
For many ordinary Iranians, politicians’ promises hold no sway. With inflation at 47.6 per cent in June compared with the same month a year ago, power cuts are yet one more blow.
“As soon as the electricity gets cut, I go to the window and start chanting death to all Iranian leaders mentioning their names. Sometimes neighbours join,” said a woman who runs a beauty salon in Tehran, and did not want her name published.
“After a horrible year with little business and lots of debts, the last thing I need in this salon is power cuts with my customers’ hair half-brushed and not enough light to finish their manicures. I feel I have nothing to lose any more.”