One of our very first pieces – Is the Middle East the new Eastern Europe?, published way back on January 22nd 2011 with the backdrop of an Arab world in convulsion – addressed the ostensibly mundane topic of the price of staple goods in Iran. While the world’s was collectively staring open-mouthed at the removal of dictators previously thought invincible in Tunis and Cairo, we at Mediolana – while also publishing extensively on the rapidly unfolding and still ongoing regional political turbulence – noted that the barely noticed but staggering overnight rises in the cost of automobile fuel, natural gas and lavash flatbread under the paradoxical rubric of the Smart Subsidy Plan could have serious consequences for the existing order in oil-rich Persia: ‘The Iranian government estimates that eliminating these will save $100bn annually, but in a country which in 2009 entered the bottom ten nations in the Transparency International Corruption Perception Index and in which unemployment and inflation are already significant problems, this program does not seem to be the most obvious way of encouraging loyalty to the existing system.’
Fast-forward twenty months or so, factor in further price hikes for meat products, and what Mediolana hinted at seems to be coming to pass: the last 48 hours have seen riot police clash with demonstrators and money changers in Teheran’s historic and labyrinthine Grand Bazaar as the mood on the street – not helped by a drastic fall in the value of the rial against the US dollar – has ostensibly reached a new level of dissatisfaction. The confrontation between the riot police and the bazaar denizens is of particular symbolic significance as the bazaari class has traditionally been a bulwark of support for Iran’s revolutionary regime: in an otherwise largely statist economy characterised by layers of bureaucracy, bazaar traders are lightly taxed and scarcely regulated.
One of the many phenomena that the global economic crisis is richly illustrating is that every kind of political and socio-economic system is being confronted with the basic question not merely of prosperity but dignity: ensuring that the basics of meaningful economic participation are in place for an overwhelming majority of the citizenry. The Iranian example clearly evinces that states where rampant structural corruption is the norm will not be cushioned even by abundant valuable natural resources; in the absence of greater transparency and technocratic insulation, further multi-level fragmentation seems all but assured.