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Tehran Bazaar Strike Enters Second Week

by DAN GEIST in New York

14 Jul 2010 18:2631 Comments

Update: Iran merchants and tax collectors end standoff.

Tax protest significant blow to government agenda, says scholar.

tehran-mart-2.jpgA large number of shops remain shuttered in the Tehran bazaar, even after a compromise was reached over the tax plans that prompted last week's merchant strike. Reports that the government aimed to raise income taxes by 70 percent on the economy's guild sector, largely composed of bazaaris, set off the action. Officials have claimed those reports were erroneous, and the government's Organization of Taxation Affairs has now agreed with the guild council on a 15 percent increase. Yet anger persists over both the higher levy and the violent attempts by police and plainclothes operatives to forcibly reopen the bazaar this past Thursday.

The strike began in three distinct sectors of the bazaar, according to Dr. Arang Keshavarzian, associate professor of Middle Eastern and Islamic studies at New York University: the fabric bazaar, the gold and jewelry bazaar, and the carpet bazaar. The strike soon spilled over into other business areas, as well as other cities around the country, with reports of similar organized closings in Mashhad, Tabriz, and Hamadan.

The assault by a mixed group of security forces during the second day of the strike met with little success and the bazaar remained largely inactive into the weekend. (Media reports that a textile trader was killed in the raid appear to be mistaken.) The administration of President Mahmoud Ahmadinejad suddenly announced that Sunday and Monday would be national holidays, purportedly in response to hot weather. Temperatures, however, have not surpassed the norm for this time of year and it is widely believed that the holidays were called to lessen the impact of the business strike. Keshavarzian suggests the primary motivator was the recent series of blackouts and brownouts in the capital, underscoring the broader economic disruptions that form the strike's context.

The guild tax hike reflects the priorities of the government's recently implemented 5th economic plan, which calls for a 30 percent increase in annual tax receipts despite an extended period of economic stagnation. The plan, says Keshavarzian, author of Bazaar and State in Iran: The Politics of the Tehran Marketplace, demonstrates the government's "need to extract greater resources from the economy. And this week's events dramatically illustrate how difficult this task will be."

The current action by the bazaaris, like their October 2008 strike in response to the proposed institution of a value-added tax, "is yet another indicator that the economy is doing poorly. The bazaaris justify their resistance because the weak state of the economy has limited their profits." Lack of trust in the administration is another factor. According to an AFP wire report, many merchants say they are not ready to reopen until the government pledges that there will be no additional increases later in the year.

There have been suggestions that the growing role played by the Islamic Revolutionary Guard Corps in the national economy under Ahmadinejad has reduced the bazaaris' margins. Keshavarzian agrees, but sees this as just the latest step in a decades-long trend. "The Iranian government has had a greater role in the economy from the outset" of the Islamic Republic, he says, "going back to the Iran-Iraq War, which created a war economy in the 1980s. Since then, various state and quasi-state organizations, such as ministries and foundations, have controlled important parts of the commercial sector."

Keshavarzian cautions against overreading the strike as a political incident reflecting ideological opposition to the Ahmadinejad regime among the bazaaris. "These events were triggered by very concrete, discrete financial concerns," he says. "This is fundamentally an economic conflict."

In recent years, Keshavarzian observes, the bazaaris "have not played a major political role as they did in the Revolution" and as they did at other crucial points in the country's modern history, supporting the Constitutional Revolution in the early 20th century and Prime Minister Mohammad Mosaddegh's efforts to nationalize the Iranian oil industry in the 1950s. "The regime has been able to weaken the bazaaris' socioeconomic structure," he notes, which has had political ramifications. "They were not particularly involved in the events of last summer."

In addition to the weakening of civil institutions through which they could express themselves, there is a more basic reason that the bazaaris have not played a proactive political role except when their interests have been directly jeopardized: a lack of unity. Bazaaris encompass a very diverse group, ranging from large import-export operators to individual shop owners. They are similarly diverse in their political leanings. When Keshavarzian last visited the Tehran bazaar in May 2009, he found those who voiced strong support for Mir Hossein Mousavi -- then a Reformist presidential candidate, now the Green Movement's most prominent leader. Yet others remain committed to the Ahmadinejad government or feel closest to the clerical establishment. The apolitical and apathetic, he says, likely form the plurality.

Media reports suggesting that the strike has been driven by bazaaris aligned with Ali Akbar Hashemi Rafsanjani appear to be purely speculative. Keshavarzian does say, however, that many bazaaris reflect nostalgically on Rafsanjani's 1989-97 presidency as something of a "golden period" of economic liberalization. And the relatively pragmatic, technocratic vision of an Islamic Republic with which he is identified would certainly hold greater appeal for much of the mercantile class than the current version.

Certainly, the developments of the past week represent an unambiguous setback for the regime. Whether or not they were precise in detail, the reports of an extravagantly onerous tax scheme reached an audience that found them entirely plausible. The consequent strike and the government's heavy-handed reaction to it "may help to unify the bazaaris," Keshavarzian says. The events around the bazaar are "not good news for stability, not good news for the government's agenda, not good news for the effort to present Ahmadinejad as a strong, powerful leader."

Copyright © 2010 Tehran Bureau

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31 Comments

Big surprise! The Iranian people are not going to sacrifice their livelyhoods to pay for the nonsense their government is doing.

muhammad billy bob / July 14, 2010 7:45 PM

A Tehran Bureau correspondent on the scene submitted this update late Tuesday:

"I visited the bazaar today and was quite surprised to see most stores closed there. There were NO security personnel in uniform
to be found anywhere. I did see a Basiji directing traffic half a mile
away. There was also a flier on the wall, inside the main bazaar, which said, 'The 15% deal is off.'"

Dan Geist / July 14, 2010 9:52 PM

politics aside, any civilized country should have huge taxes.

the greatest democracies which are in northern europe have high minimum taxes.

the only difference here is that the iranians government does not want the taxes to do good for the people but finance its terror against its people.

arman / July 15, 2010 3:52 PM

Arman,

Taxes are politics. Taxes fund politics. Northern European countries are on the verge of collapse due to extreme taxes, support of the aged( in those countries over 55), and support of other nations that are even more messed up. Socialism doesn't work. It has been proven time and again. Forced services are far inferior to services that are voluntary.

muhammad billy bob / July 15, 2010 6:30 PM

Reason for this strike is way beyond and opposed to what is being portrayed.
Bazaar’s problems is not the high taxes, rather they have opened their eyes and suddenly faced with a big fat cat ,strong and unwanted partner, named Revolutionary guards.
Let not fool ourselves! It is economy “profit” stupid, profit!! And for sure, it is not sympathy or solidarity with people.

Kurosh K / July 15, 2010 11:05 PM

the countries on the verge of collapse are extreme capitalist countries like usa and not scandinavia. all these countries have superior economy than non social democracies. write what you want youre just plain wrong. its the taxes that have saved these countries from getting weak like usa.

free education
free health care including surgeries
good television and state tv without garbage like in usa.
strong economy built on a modern tax system (not the old type cowboy yankee like in us)
and a living standard far higher than almost every country.

this describes not only one country but all the social democracies in scandinavia.

these are facts.

Arman / July 16, 2010 12:13 AM

but in a ultra capitalist system like usa you dont have independent good parties only business parties that no one sees any difference between.


USA is a two party system and not a complete democracy.
while these social democracies are the best examples of democracy and the most free countries.

just look at the gay rights in scandinavia. its makes usa look like a state in the middle ages.

Arman / July 16, 2010 12:15 AM

Arman,

you need to take an economics class.

education is not free. The teachers are paid, the principles are paid, the educational beauracracy is paid, the electricity is not free, someone is paying for this- the taxpayers.

health care is not free. The doctors are paid, the nurses, electricity is not free someone is paying for this-the taxpayer.

Tv is not free. taxpayers are subsidising the tv.

When someone decides to retire at the age of 55 and live off the taxpayer for the rest of their lives. That costs money. Money not supplied by that person.

People do not work for free. They expect compensation for their labor.

The standard of living for the average person is far below that of the U.S. Let alone the sheer dispair that they spend most of their lives working to pay taxes they may or may not agree with.

muhammad billy bob / July 16, 2010 3:01 AM

no you are wrong in every point.

the standard of living in scandinavia is far above us.

everything ive said is free is free, because you dont pay for it directly but the state sponsors it.

your just plain wrong so there is no point in writing this garbage here mr profet.

Arman / July 16, 2010 4:23 AM

Arman,
Billy Bob,


you can not compare Scandinavia with the US. Why? because Americans are not Scandinavians.


In general---and I mean in general:

Scandinavians travel the world
---Americans don't (sorry cancun doesnt count)

Scandinavians are content with a single modest family car and modest house with a small TV.
---Americans dream of the big car, big house, big bank account, i.e. "the American Dream" (vast majority never get there, but that's ok as long as there is a chance, kinda like Las vegas).


Scandinavians believe that after their productive years, the society should take care of them.
---Americans hope their employer and/or retirement account will.


Sandinavians belive health coverage is every citizen's right.
---Americans believe it is a previlage and is entitled to the productive members of society.

Sandinavians believe that society is responsible for taking care of the weak and needy.
---Americans see the weak and needy as lazy freeloaders. Charities should take care of the rest.


Scaninavians want equal access to good education for all, for the good of the society---Americans must earn top dollars to put their kids in best ivy-league colleges (best in the world BTW), and live in affluent neighborhoods that have better schools.


Sandinavian justice system is based on rehabilitation and public safety.
---American justice system is based on judochristian principles, namely punishment/revenge that fits the crime.


So Arman,
do not compare apples with oranges. US will never be like Scandinavia, or Canada for that matter, becuase Americans are Americans and if they wanted the European system, they would have stayed there.

You can argue about which system is better or worse, but it would be useless. The people in Scandinavia can not understand/tolerate American system and vice versa.

Mo Billy Bob,

Which system is better? look for the following factors in the society:
which take more antidepressant medication.
which have a weight problem.
which retires later.
which has a higher personal debt.
which has a higher national debt.

Ahvaz / July 16, 2010 7:17 AM

I'm going to side with Arman in this one. Scandinavian countries have had a much higher standard of living than the US for many many many years. Not only that, they area also a lot more socially progressive than the US. All you have to do is look at what's happening in Arizona and their proposed immigration law.


If i had to choose, i'd take Sweden/Finland/Denmark any day of the week.

DC / July 16, 2010 12:08 PM

In the US, if you don’t have enough money and have severed fingers, you pay per finger. Not enough cash? We’re sorry, you have to choose between which fingers to choose and which ones to throw out. You call that a good standard of life?

DC / July 16, 2010 12:10 PM

Arman,

Where does the state get its money? Does it just fall from heaven?

Have you ever heard the saying "there is no such thing as a free lunch"? Human beings do not give their labor and time and effort for free.

In scandinavia they do pay for these things directly. It's is taken, if they like it or not, directly from their pay for their labor. Only they can not refuse to pay a service they don't use. They have 3 options don't work to pay the state, or go to jail for not paying the tribute, or join everybody else and see how much you can steal from your neighbor.

muhammad billy bob / July 16, 2010 4:14 PM

I agree that the U.S. is pretty close to being just as socialist as scandanvia.

There is a political lobby that puts out a list of countries with the greatest freedom every year. Chile and New Zealand come near the top of the list.

Freedom is comprised of two aspects. Social and economic. It doesn't do one much good to have one without the other.

Ahvaz,

I agree with alot of your points. Americans do think the world revolves around them. Just look at the Super bowl and "world Series". They think any one else cares about these things, when they don't.

But alot of your points are not really a point of freedom of people.

-The U.S. may take more antidepressants, but maybe this is a good thing. Maybe it's an indication of easy access to health care. Looking at the alternative that scandanvia leads the world in per capita suicides.

-Which country has weight problems? This could be seen as proof that food is so plentiful and cheap that the people over-endulge. One of the greatest things about the U.S. is that there are many, many immigrant communities from around the world that bring their fantastic cultures and food.

-which retires later? To retire on the back of others is no point of pride. Besides that, there are many benefits to remaining in the workforce longer. Those who remain in the worforce longer live happier longer lives.

All this being said, I think I'd like to live in New Zealand than the U.S. But there are worse places to live, Like scandanavia.

muhammad billy bob / July 16, 2010 6:38 PM

Mo Billy Bob,

I couldn't live in Scandinavia either, why???
1. the weather
2. the weather
3. the weahter
Otherwise, they have it pretty good. especially Norway.

I dont think Americans take more prozak because they have better access to healthcare. They do because they are generally less happy. why?
they are overweight, overworked, in too much debt.

Weight problem is caused by life style: eating on the run (fast food), and inactivity. Poorer states, and parts of society have bigger weight problems. Weight is not a result of wealth. Its the opposite.

And regarding retiring, who dreams of retiring late? Every one wants to retire early. "Those who remain in the worforce longer live happier longer lives" thats like saying "Arbeit macht frei".


I have been to New Zealand. it's real nice, but I couldn;t live there. Too small, Little potential to make it big. That's why I CHOSE the US, for the potential to make it big some day. I 'll take my Vegas odds any day. It's my personality.

Ahvaz / July 16, 2010 8:31 PM

Ahvaz,

LOL. The weather is the only thing I'd like about living in scandinavia! I am heat intoleratant!

I've been to Norway, the people are extremely friendly.

Retirement brings about many unseen side effects. Talk about you sedintary lifestyles.. many retirees go home and stay there with nothing to stimulate their brains. They slowly fade away.

Making it big, or the american dream....These days such things are like the Vegas odds. Wheras 100 or so years ago in the U.S. it was very real, very attainable. Why? Because government has decided it's in the people's intrests, (and the people have agreed), to squash anyone who thinks of the better mouse trap. If it's not the government regulations protecting their largest supporters, it will be the government taxes, and zoning laws, accessibilty laws,"right to work" laws, etc. ad infinanitum, and the general attitude of government agencies that they are entitled to suck you dry. The american dream is dead. Replaced by the socialist dream of Europe.It is already a fait de complete. There is no use fighting it, there are already far too many suckling on the teats of government intrusion than there are those who are providing the teats.

muhammad billy bob / July 16, 2010 9:49 PM

Guys,

I love to read your comments on the subject of economics. These are the latest statistics on the top 10 nations of the world followed up by some additional info. The base year for the stats is 2004 extended to 2009.

•Luxembourg ... $56,380
•Norway ... $51,810
•Switzerland ... $49,600
•United States ... $41,440
•Denmark ... $40,750
•Iceland ... $37,920
•Japan ... $37,050
•Sweden ... $35,840
•Ireland ... $34,310
•United Kingdom ... $33,630

Canada is ranked 21 with $28,310.

Facts:

Luxembourg's high GNP per capita is due in part because a significant part of its workforce lives in neighboring countries. Non-resident workers are not counted in Luxembourg's population which in turn raises the country's GNP per capita.

Norway has a population of 4,676,305 as of 2010 with great deal of oil reserves to supplement their economy. Norway chooses to invest the oil revenue for its future generations and they should be commended for this policy. Their rise above their neighbors is due to a healthy oil revenue. Their tiny population, less than half of the population of Iran's capital city is a great contributor to their high standard of living. A fact shared with the other Scandinavian countries, Sweden 9+ and Finland 5+.
Switzerland ranks number one in quality of life which in my opinion far exceeds wealth in importance.
Raise the population numbers and socialism becomes a very inefficient tool as a number of European countries have demonstrated i.e. France.

However, nations with the fastest growing Gross Domestic Products are not particularly your average rich countries of the world. Here is the list,

Chad (29.8%), Ukraine (12.1%), China (10.1%), Russia (7.7%), Iceland (5.2%) and Luxembourg (4.5%).

U.S. days of world dominance is over, but she is clearly a top player with enormous potentials.

Ahvaz, thank you for some great reading and related reference(s).

Niloofar / July 16, 2010 10:42 PM

Heat intolerant eh! I would recommend the South Island of NZ. The north Island is hot still. And Kiwins are pretty nice too.

You have expressed your (liberterian) views, and as a business owner I agree with a lot. But I wouldnt call US socialist. It is very much a capitalist nation. And taxes are still very low. I pay less than 5% income tax thanks to my good CPA. In Canada, or Europe, I would have paid 55% PLUS.

The opposite side of the coin (as to why the AMerican dream is dead) is that the corprations have gotten so big that they leave little chance for the little guy. I recommend you read "when corporation take over the world" by David Korten, for a different perspective..

Ahvaz / July 16, 2010 10:48 PM

@muhammad billy bob taxes and industry provides the state money.

Arman / July 17, 2010 12:49 AM

what is wrong with paying higher taxes especially if you are earning well and the taxes are utilised properly (as humanly as possible) for the benefit of the rest of the society. In Victorian times, the wealthy merchants used to be proud to bestow parks and other amenities for the wider welfare of the public. Many famous companies like Cadburys, the Wellcome Foundation were founded by individuals or families who regarded it as a privilege to serve society and support social justice causes such as the movement to abolish slavery or the women's sufragettes plus the establishing of many churches and other educational institutions. Similarly the case in Muslim countries where through the institution of waqf lands and property were endowed for the benefit of the public and generations to come. A good example of this is the Imam Reza Foundation in Mashhad.
We have to ask ourselves whether in the very short life span that we enjoy on this earth, is our goal simply to accumulate material wealth for personal and private benefit only, none of which is going to come with us beyond death, or to leave a legacy which benefits not only our here and now and makes the world a better place and leave some for the 'hereafter' for those to come after us.

rezvan / July 17, 2010 3:37 AM

Rezvan,

What educational institution is linked to Imam Reza Foundation? How much money does this Foundation make and how is it spent? What famous company was ever founded by Imam Reza Foundation?
Mullahs and their establishments only have one function, consumption and continuation of a parasitic life. Have you ever seen a mullah "WORK" for a living?

Niloofar / July 17, 2010 7:26 AM

rezvan,

there is a huge difference between taxes in western modern welfare countries and church/mosque foundations. i would never give a dime to a mosque or a church. in a modern state these taxes to religious foundations dont have a place. specially not religious foundations in iran which we all know now how corrupt they are and what they stand for. these foundatons are against progress and iran while a state tax builds a countries infra structure and makes sure the gap between poor and rich is less.
like the case in scandinavian countries.

btw they also have the best system of democracy:
const. monarchy.

Arman / July 17, 2010 5:32 PM

rezvan,

The major, major difference is that taxes are collected by force.

Most people know it's benefical to them to contribe, if they can, to their fellow humans. What is not benefical, is extorting money with the threat of imprisionment, or worse. Which is exactly what taxes are. That's the moral arguement against taxes.

The practical arguement agianst taxes is the sheer inefficenancy of collected them, enforcing them, distributing, them is just not pratical. If a private charity operated as most governments do they'd be out of business pretty fast.

muhammad billy bob / July 17, 2010 11:47 PM

Arman,

I would also never give any money to a church, or mosque. I've been in too many churches where the pastor or priest or mullah or authority figure "in charge" was far more wealthy than those he was asking to give up their money.

But the problem I have with constitutional monarchies is the monarchy part. These people have no place living off the taxpayer. I know, I know. They pay taxes also. But their travel to the nicest places in the world "in the name" of whatever" is covered by the taxpayer. The upkeep on their various houses (castles or mansions to us commoners) are paid for by the taxpayer. The security alone that is paid for by the taxpayer makes no sense to keep a monarchy. They should pay their own way, which they are plenty capable. If they want to travel to South Africa to see a football game they should do it on their own dime. Not the poor guy's dime who can't afford to go.

muhammad billy bob / July 18, 2010 10:40 PM

can't have it both ways: Can't complain the country depends on oil for its revenues, then oppose the very taxes that are designed to shift the government's source of income away from oil.

Personally I am against taxes. The US proves that high taxes are never the solution. But the problem is not the taxes themselves, the problem is what are the taxes for. Take good old USA, we have an immense tax collection, far more than any nation in human history, yet we are one trillion dollars in debt per year.

Therefore, taxes are necessary if one does not want to be a nation like Iran that depends on one product to balance all the books. On the other hand, the US teaches us that if the size of government is not checked, all the taxes in the world won't solve the problems.

If people want their government to take care of their problems (education, social security, healthcare, etc.) then they should be willing to pay taxes. On the otherhand, if they don't want to pay taxes, like the bazaaris, then they should expect the minimum and never complain (economically speaking).

I wish the Iranian government would become the only government in the world that would never tax income or place a sales tax. I think the fairest tax is on capital gains and a mandatory minimal on gross income of medium to large size corporation. That way you tax those incomes that are as a consequence of economic gains. Income-tax taxes money that was produced by labor rather than money that is produced from economic activity. Sales tax discourages economic activity.

pouya / July 19, 2010 12:03 PM

Pouya,

Taxes only on capital gains would not provide the money any government craves. And large sized corporations just pass the cost of their taxes to the poor consumers in higher prices.

But it will never happen. Governments desire much more money than can be collected by these means. And you are right. Most people in democracies think they can vote for "their guy" to tax others(not themselves)to pay for their basic living expenses. It's theft, or maybe more realistically a pyramid scheme.

What I'd like, which is definately never, ever, going to happen, is voluntary funding of governments. Lotteries, trust funds, charitable contributions. In this way people can live at peace with their neighbors.

muhammad billy bob / July 20, 2010 12:04 AM

M. Billy bob

That would be nice, but as you clearly understand no one is going to voluntarily give up money.

You are also right that the US is no longer a capitalistic society. Taxation is used to carve out money to corporate sponsors. Which is why we can't get enough of the wars-for-profit, and can't cut the deficit, can't pass a healthcare bill that don't benefit the fat cats, etc. It is called "crony capitalism." (do I need a spell check?)

More importantly, what is really of essense is whether taxes are spent on people. That is where I agree with others that the scandinavian countries succeed because their dollars go to benefit people, albeit they have smaller and more managable population. We have a huge government, huge tax base, and no basic services. Just look at LA, terrible schools, no transportation, dirty streets, no local small parks in each neighborhood (as Europeans do), yet, LA County (to my supprise) is ranked 9th economy on earth. I am sure many will debate this, but it is true and it make sense when you think about it, that the county is in a state that is ranked 5th largest economy on earth (where else the money would be but LA). I lived in Paris for 2 years, they even picked up our garbage for free. We never even worried about what would happen if we got sick. I don't recommend France for many other reasons.

The US needs a small government, not because that's what we need, but because they are too inefficient and waste money on wars and their crony buddies. The war, the deficit, the lack of any and all social services, are symptoms of a corrupt system that can't stop itself.

What surprises me is the lack of outrage by the general public to all these issues, in this country. As if they are on a heavy dose of anesthesia after the banks took their homes, got their tax-payer backed bail-out, and gave themselves a raise. this is why I am proud of the Bazaaris and their strike(even though I believe Iran needs taxation reform). At least they are showing some cojones, and are letting the world know how they feel. And all of that under the regime of the IR. The one that is suposedly ruled but the IRGC (perhaps this is proof that their control is exagerated). Nevertheless, that is cojones. Good for them.

Pouya / July 20, 2010 11:03 AM

Billy Bob,

I cannot agree with your statement with regard to Monarchs since the very same statement applies to Presidents, Prime Ministers and the cabinets. How much does it cost to move the President around, pay for the up keep, the White house and the staff etc. etc. etc.
That kind of expense always exists no matter what. Do they represent a government of the people is the principle question one should consider. The rest is icing on the cake. Norway and Sweden are monarchies and representatives of some of the best democracies and economies in the world however, Finland is a Republic and yet in the same class as the other two. Let us not look at the label, but the content.

Niloofar / July 20, 2010 11:10 PM

Pouya,

There are millions of people everyday that voluntarily give to governments. It's called the lotteries.

muhammad billy bob / July 21, 2010 7:28 AM

M Billy Bob

Good point

Pouya / July 22, 2010 11:41 AM

please dont even compare Iran with Scandinavian countries. Those are free democratic advanced states. Iran should be compared with North Korea and Burma. That theocratic repressive state and its Mafia economy are rapidly going down the abyss.

Arash / July 25, 2010 2:08 AM