Intensification of Economic Bankruptcy and Social Crisis, Consequences of Coronavirus Pandemic in Iran

Statement of the Political-Executive Board of the Left Party of Iran (People’s Fadaian)

Intensification of Economic Bankruptcy and Social Crisis, Consequences of Coronavirus Pandemic in Iran

Although Corona's pandemic has killed hundreds of thousands of people from all around the world, but it is not the only terrible consequence. The alarming scale and depth of the nightmare of the economic crisis caused by this virus has also frightened countries. Iran's economy which was already in crisis, is being threatened by this all-encompassing factor with more intensity and more far-reaching effects.

Signs of a lack of funding and severe pressure on the Islamic Republic (IR) are evident. The government's main revenue which comes from the sale of oil and gas and petrochemical products, either as a result of sanctions, which public suffers from it the most, or the horrific crash of oil price is at its lowest level in 40 years. Declining government revenues from taxes, exports and customs duties, and the closure of a significant portion of the service sector have left it paralyzed. Withdrawal from the National Development Fund to cover the costs of Corona pandemic is clearly the last resort for the regime.

The IR is doing whatever possible to survive. It has requested a $5 billion loan from the International Monetary Fund that has not yet been answered. Due to the lack of funding, the government categorically rejected the request of increasing workers' wages at the level of inflation. On the other hand, the bankrupt government is unable to pay its debts to some creditors in the private sector.

Drop in the government revenues, however, is in no way commensurate with its fixed costs. Not only is there no sign of adjustment in the budget lines for the current year budget, but more resources are allocated to military, security, propaganda and religious institutions, such as the "Missile Production Industry” development program. Even in this critical economic situation, corruption and bribery are norms of the day and various embezzlements and loss of large sums of money in the dark corridors of the system are the daily news. The system is in the throes of an economic crisis, and the country's structurally and institutionally ill economy which has been exacerbated by the IR over the decades and has become even more so in recent years due to the oppressive policy of "maximum sanctions" is suffering under the Corona deathblows.

In connection with this dire situation, 50 economic experts have described the country's economic situation as "heightening recession and declining production and economic growth", "rising unemployment and declining employment rates", "poverty and the possibility of a sudden increase in absolute poverty" and "worsening inflation situation" and warned of "the possibility of the formation of turbulent and unsatisfactory nuclei on the outskirts of cities." Based on their prediction, this dangerous course could "turn the second half of 1399 and 1400 (Persian Calendar) into a period of crisis."

It is on this basis that the hardships of public life, in other words hiking trend of rising unemployment and growing public poverty has accelerated and has caused decline in public demand and exacerbated the recession in the form of accelerated closures of production and service units. Workers of small units and their lower strata are facing the threat of unemployment and income constraints and big units are also facing the nightmare of bankruptcy. The middle class, which has long since declined sharply in terms of income and living standards, is now struggling with a shared sense of pain with workers and the masses as living standards decline. In particular, the severely impacted service sector of these strata by Corona pandemic, has a dark and irreparable outlook and is full of dissatisfaction. Worst of all, however, many of the poor are among the "marginalized" who remain the storehouse of gunpowder for the post-Corona era and perhaps even during the Corona era.

Although the society's highest protest capacity now lies in the poorer strata of the society, including the suburbs, it is necessary for this protest potential to be linked to the struggles of progressive workers, teachers and students. This linkage can prevent energy wastage in protest uprisings that can occur on the horizon and transcend the protest force of the society in the form of effective and incisive democratic slogans.

What is needed now more than anything else is to emphasize the need to provide financial resources to help make living for millions of people, including peddlers, porters, motor couriers, seasonal workers, construction workers, working women and children and self-employed people who have been unemployed or suffered financially by the Corona crisis. In this regard, there is an urgent need for the country to reduce the military, law enforcement and judicial costs and cut budget lines related to repressive security agencies and all ideological and propaganda institutions of the regime, such as Al-Mustafa Society, seminary, Academy of Persian Language and Literature (APLL), Islamic Propaganda Organization, etc. A systematic vision should be promoted in the society and the income resulted from the retrenchment should be allocated to the vulnerable groups in the form of service of medical needs and cash payment. In parallel with these urgent measures, it is necessary to make the demand for public insurance as a general demand by providing quality services to the society.

Raising public awareness in a systematic fashion and introducing the destructive role of the IR in bringing the country to this critical situation and creating and strengthening an independent civil movement, are crucial issues in the struggle to pull the country and the people out of the crisis.

Political-Executive Board of the Left Party of Iran (People’s Fadaian)

May 21, 2020