Tehran Bazaar Strike Enters Second Week
by DAN GEIST in New York
14 Jul 2010 18:26
Tax protest significant blow to government agenda, says scholar.A 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."
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