Kevan Harris's Blog

The Drama of Iran’s Erratic Rial

August 16, 2012 | 9:28am

Kevan Harris

What are the primary reasons that the Iranian rial has lost half of its value against the U.S. dollar in just one year? Iran’s currency was valued at about 10,000 rials to the dollar in the summer of 2011. It plummeted to more than 20,000 to the dollar in the summer of 2012.

Inflation in Iran’s economy has not been this bad since the end of the Iran-Iraq War or the economic crisis of the early 1990s, which also caused high inflation. The rial’s value began to slide rapidly at the beginning of 2012 after the United States announced new sanctions above and beyond the latest U.N. sanctions. The slide was due partly to the psychology of sanctions.

In that sense, a certain percentage of the public—and their expectations--helped cause the more rapid slide. They don’t think the Central Bank can stabilize the rial in the medium term. People who have money are buying gold, dollars, and real estate to protect their wealth. Everybody is making individual decisions that are pushing the rial down because everyone is holding onto foreign currencies.

What is the impact on the Iranian public?

With increased sanctions, the demand went up for gold, foreign currency and anything independent of the rial. In fact, the real estate market in Tehran has been growing over the last six months. It had slowed in previous years due to a housing crash just like everywhere else. People are even putting money into real estate in poorer neighborhoods, which means people are continuing to take money out of the banks and invest it in housing.

What has happened in the last six months is very similar to what happened to the Russian middle class in 1999 and Argentine middle class in 2001. The Iranian middle class is going through the same process. They are seeing the value of their money in the bank erode. It is a shock.

After the Russian and Argentine financial crises, both countries ended up with more nationalist leaders in power--Vladimir Putin and Nestor Kirchner. Policymakers in the United States might want to remember that. Financial crises do not always produce what you want or expect.

What is the Iranian government’s response?

The government is trying to respond with various short-term measures. For example, the price of rice has gone up only slightly compared to the price of chicken partly because the government has exchanged oil for stockpiled rice with India. Everybody eats rice in Iran and not everyone can afford chicken, so the government is attempting to prioritize those goods which have the widest consumption.

The government also went back to a tiered currency regime similar to what it had in the 1980s, during the Iraq-Iran War, and through the 1990s. Various types of imports and transactions had different exchange rates. Today, the official exchange rate is used for strategic imports such as food and medicine. That is another reason the price of rice did not go up a lot.

The price of chicken went up a lot, however, because Iran is not a socialist country. It cannot control the price of everything. Chicken farmers and wholesale buyers respond to market prices. The government capped the store price of chicken, but the price of chicken feed was going up because much of it is imported.

Along with cutbacks in subsidies, which also caused domestic inflation, the chicken farmers’ costs became so high that they could not make a profit. So they basically stopped selling. Chicken prices went up drastically because there was no chicken on the market. The government was slow to respond—and then did what it always does. It found a place in the world with something cheap to sell. Iran imported frozen chicken from Latin America, just as it now imports beef from Brazil. Each of the goods has its own story, but the rice-and-chicken dynamic is illustrative of the government’s strategy for dealing with inflationary shocks.

The state also stopped its phased subsidy reductions. It had planned to further cut longstanding subsidies for electricity, gasoline and utilities, but parliament told the president in the spring to continue the current level of subsidies. The president initially refused, but under parliamentary pressure has deferred any new price hikes. So U.S. and E.U. sanctions have forced the Islamic Republic to stop the subsidy reduction program that the International Monetary Fund and the Ahmadinejad government had been working on for years.

What roles have U.S. and international sanctions played in Iran’s currency drama? In July 2012, Parliamentary Speaker Ali Larijani said that only 20 percent of Iran’s economic problems were due to international sanctions. What is your assessment?

It is hard to put a number on what percentage U.S. and E.U. sanctions have on currency devaluation and inflation because both are produced by a combination of factors-- what individuals do based on future uncertainty and the sometimes contradictory policies of the government.

The Central Bank has suggested that it may change the official exchange rate. What impact will that have? Will it solve the problem? Are there any side effects or dangers?

Some economists, including many in Iran, say the country needs a single rate. People make money playing the official and unofficial currency rates off each other. But the state does not have the luxury of unifying the rial’s value. So it is trying all sorts of stop-gap measures, which in the long term are harmful. They create opportunities for speculation. But the state, which is dealing in the short term, is in a double bind. Letting the official rate devalue would lead to such an inflationary burst that prices could go up even more.

The other option is what the state is doing now, prioritizing who gets money. It is giving money to strategic sectors and industries that it cannot let slide, like the auto industry, the oil sector and businesses related to petroleum. It gives them the better exchange rate. Yet these are short-term solutions to big problems.

In the 1980s, the government also tried to plan what food and consumer goods came into the country. The government had to basically take over the market, and this is what they are doing again--only for those items or industries that it feels are strategic, like rice, as opposed to chicken. Politically, you cannot have a whole town without rice; it is impossible.

What will happen if the rial continues to lose value?

People will probably continue to “euro-ize” and dollarize their transactions if the value falls. But Iran will always find another country to make a deal with. There is a long list of countries that will pursue their national interests and deal with Iran. The whole world economy is slowing down, so everyone is looking for cheaper deals. There will probably be more smuggling as well, as people turn to the black market for goods which may be in short supply.

Read Kevan Harris' chapter on the bazaar in "The Iran Primer"

Kevan Harris is a postdoctoral research associate at Princeton University. He is a 2011-12 USIP Jennings Randolph Peace Fellow. He writes a weblog called “The Thirsty Fish."

Tags: Currency, Economy, Iran, Rial, Sanctions

Iran’s Massive Banking Scandal

October 16, 2011 | 10:16pm

Kevan Harris

What’s the origin of the Islamic Republic’s biggest banking scandal?

The financial conglomerate Amir Mansour Arya Investment Development Company allegedly procured several letters of credit from domestic banks totaling $2.8 billion--far above the company’s available collateral. The Arya Group, founded by Amir Mansour Khosravi and now controlled by his son Mah-Afarid, controlled around $3.8 billion in assets, including 52 companies with 20,000 workers.

After obtaining falsified letters of credit from a branch of Saderat (Export) Bank in Ahvaz, the Arya Group allegedly used them to obtain even more financing from several other banks including Saman, Sepah, and Melli Bank; Melli is Iran’s oldest national bank. Arya Group is also accused of using its own companies as shell organizations to misrepresent the value of the entire Group. It reportedly then used the promised loans from multiple banks to bid on recently privatized companies as well as set up its own financial institution, Arya Bank.

There are several layers of alleged corruption, embezzlement and fraud in this case. The original letters of credit from Saderat Bank were issued without a required waiting and evaluation period; bank officials allegedly may have been taking bribes. Melli Bank and other banks reportedly did not check the validity of the letters when issuing their own loans to the Arya Group. The government’s Money and Credit Council was either lax in oversight or overtly supportive of the loans. Critics of President Mahmoud Ahmadinejad claim the council was packed with supporters of the president’s closest aide, Rashim Esfandiar Mashaei. Finally, the Central Bank allegedly failed to monitor these transactions and prevent abuse.

The government took possession of Arya Group’s assets and companies in September, which at least temporarily prevented the layoff of 20,000 workers. But full recovery of the $2.8 billion, just under one percent of Iran’s annual GDP, is still uncertain.

What impact will this have on Iranian politics, especially Present Ahmadinejad and his inner circle?

The political fallout increases almost daily. The directors of Saderat Bank and Melli Bank resigned in late September. Melli’s director, who has dual citizenship, fled to Canada. Dozens of banking officials have been arrested and questioned. Members of parliament discussed the possible impeachment of Minister of Economy Shamsoddin Hosseini. Central Bank Governor Mahmoud Bahmani cannot be impeached since he has a presidential appointment, but members of parliament have called for his resignation.

But even if Ahmadinejad contains the short-term damage, the scale of this scandal dwarfs all earlier corruption scandals during the presidencies of Akbar Hashemi Rafsanjani and Mohammad Khatami. It also stains the president’s attempt to portray himself as an incorruptible politician fighting a crooked system.

What role has Supreme Leader Ali Khamenei played in the reaction to the scandal?

Ayatollah Khamenei is once again stuck arbitrating deep factional strife among Iran’s political elite. He has publicly vowed that the perpetrators would be tracked down and severely punished. But he has also demanded an end to the mud-slinging among conservative critics and the president’s supporters.

Since the presidential election in 2009, Iranian has been plagued by an unrelenting cycle: clashes among conservatives, Khamenei calls for unity, temporary lulls in the battle, and then renewed discord at more intense levels. For all the supreme leader’s powers, he has been unable to get supposedly loyal followers to fall into line.

What are the economic implications of this bank scandal?

The Arya Group’s purported scam is a perfect storm for Iran’s economy for two reasons:

First, Ahmadinejad forced domestic banks to offer certain types of loans at interest rates lower than the rate of inflation—an unusual but not unwarranted practice under some circumstances for developing countries. But without oversight, the practice can produce speculation and fraud, since people with connections can procure money essentially for free and spend it on profitable activities outside the formal banking system.

Banks were eager to lend money to the Arya Group without much oversight because it promised higher profits in an economic climate where banks are forced to hand out loans that are technically guaranteed to lose money. As a result, Ahmadinejad’s recent loan policy has indirectly produced usury and wasteful speculation by middlemen – both supposedly illegal in the Islamic Republic.

Second, Iran’s government has been selling off public enterprises at fire-sale prices over the past four years. Profitable companies have often been sold to big pension funds, conglomerates with government ties, and other institutional investors. Ahmadinejad boasts that his privatization program succeeded in shrinking government, but the practice has actually increased corruption through murky transfer of these companies.

Corruption linked to privatization is not unique to Iran. In the 1990s, Russia and China transferred many public companies to former government officials. Similarly, Iran’s privatization program under Ahmadinejad is producing a new class of owners who, while often dependent on government connections, pursue profit largely by gaming the system. The Arya Group would not have been able to build up 52 companies so quickly over the past several years if not for these opportunities.

The Islamic Republic will pay a price whatever course the government takes. If the Iranian judiciary actually exposes the full details of high-level corruption, the government stands to lose further legitimacy even among loyal cadres. Yet if the state does nothing, strife among political factions could deepen, undermining attempts to implement policy changes that could address the country’s many social and economic ills.

Kevan Harris, who last visited Iran in June, is a 2011-12 Jennings Randolph Peace Scholar at the U.S. Institute of Peace. He also blogs at “The Thirsty Fish."

Online news media are welcome to republish original blog postings from this website in full, with a citation and link back to The Iran Primer website (www.iranprimer.com) as the original source. Any edits must be authorized by the author. Permission to reprint excerpts from The Iran Primer book should be directed to permissions@usip.org

Tags: Bank scandal, Corruption

Youth Game-Changers in Elections

September 26, 2011 | 7:11am

Kevan Harris

This is the eighth in a series on parliamentary elections due in March 2012:

What role does Iran’s youth play in elections?

After the 1979 revolution, the voting age was lowered to 15 which automatically made youth important in elections. But since the mid-1990s, Iranian youth have been particularly pivotal to both the campaigns and turnout in major elections. Student organizations were critical to the birth of the reform movement, symbolized by the 1997 election of Mohammad Khatami as president. They operated as de facto campaign staffs in towns outside of Tehran, where Khatami was basically unknown.

The 1999 student protests in Tehran and elsewhere were sparked by the closure of a popular reformist newspaper. But they reflected widespread frustration, especially among new students in the expanded public and private university system, at the slow pace of political reform. The demonstrations were quelled but student activism laid the seeds for a national opposition movement a decade later.

In 2005, some student organizations called for a boycott of the presidential election, which was won by President Mahmoud Ahmadinejad in a second round of voting. In 2009, however, young Iranians were widely visible in the campaigns of reform candidates Mir Hossein Mousavi and Mehdi Karroubi — and in six months of street protests after the government announced Ahmadinejad had been reelected.

Iran does not have a system of political parties, so endorsements by student organizations with a nationwide network can be immensely important to any candidate.

What role is Iranian youth or the activist generation likely to play in the 2012 parliamentary elections?

Iran’s young are not homogenous in their views or level of activism. On one end of the spectrum, many youth in the Basij militia supported Ahmadinejad in the 2009 election because they believed he represented their national interests. On the other end, young members of the Green Movement supported Mousavi for the same reasons. There are both engaged and apathetic youth—with the majority both, depending on the month. During the 2009 post-election protests, it was mostly young people that were beating up and shooting at other young people.

The debate for the 2012 parliamentary elections is largely about participation versus boycott. A central issue is whether voting in the election in turn bestows legitimacy on the entire political system. It is the subject of many conversations at dinner tables, coffee houses, and hookah bars all over Iran. People generally make up their minds about whether or not to vote right before the elections.

What is the origin of the youth factor in Iran's politics?

The numerical importance of young Iranians dates from the early years of the revolution. During the monarchy’s final decade in the 1970s, Iran’s birth rate decreased moderately. But under Ayatollah Ruhollah Khomeini, the Islamic Republic regarded population control as a sort of Western conspiracy and encouraged large families in the early 1980s. The new government also viewed an expanding population as good for defense of the nation and the revolution, especially during the eight-year war with Iraq.

By 1980, the average number of children per family had risen to seven children. In 1986, the ratio of Iranians aged 0-4 to the rest of the population was the highest it had been in 30 years.

The growing numbers, particularly data in the 1986 Iranian census conducted while Mousavi was prime minister, began to alarm the political elite. The war- ravaged economy could not easily cover the costs of feeding, educating, housing and eventually employing the new baby boomers. With the voting age at 15, the young also loomed as a disproportionately decisive political factor in the post-war era.

After a vigorous public debate, the regime introduced an innovative family planning program in the late 1980s that included religious fatwas encouraging contraception and a lower family size. Family planning services, which covered prenatal health and marriage counseling, quickly expanded in Iran through the construction of village clinics and urban community centers. Growing literacy among females also contributed to raising the average age of marriage which also limited family sizes.

Iran's average birth rate witnessed an astounding decline down to two children by 2000. As a result, the demographic bulge from the 1980s has not been repeated. In 2007, the regime raised the voting age to 18. Yet that baby boom generation—now between its mid-twenties and early thirties in age— is in its prime in terms of education and jobs. (Many young Iranians enter university later than their Western counterparts.)

How have political and economic issues evolved for Iran’s baby boom generation in ways that could impact elections?

Iran’s economy has not been able to absorb the baby boom generation, which is more educated and skilled than any previous Iranian generation. The Ahmadinejad government frequently discusses the issue of youth unemployment, but the large numbers of new jobs it promised have failed to materialize. And an already bloated public sector cannot hire all of the jobless youth either.

Iran's baby boom generation is well connected to global culture and technology. They are in turn transforming Iranian society. Religious music stores in Tehran offer hundreds of low-budget CDs and DVDs featuring famous devout young male singers. Several New Age styled self-help books have been translated from English into Persian. These are popular among young and educated individuals who reject heavy public displays of religiosity but want to retain spiritual ideas as part of their identity. The newly opened concert hall attached to Tehran's Milad Tower recently had its first heavy metal show, which sold out.

As this generation ages, Iran faces problems down the road of social security and health care. Iran’s major health issues are no longer tuberculosis or cholera but diseases of the elderly - high blood pressure, depression, diabetes and obesity. Although Iranians are living longer, the country's public health care system is not set up to handle these kinds of diseases, which are costlier to treat and require a more efficient and universal social safety net. These concerns are not far beneath the surface of Iranian politics already—and are likely to become more important with each future election.

Kevan Harris, who visited Iran in June, is a Ph.D. candidate in sociology at Johns Hopkins University and a 2011-12 USIP Jennings Randolph Peace Fellow. He writes a weblog called “The Thirsty Fish."

Online news media are welcome to republish original blog postings from this website (www.iranprimer.com) in full, with a citation and link back to The Iran Primer website (www.iranprimer.com) as the original source. Any edits must be authorized by the author. Permission to reprint excerpts from The Iran Primer book should be directed to permissions@usip.org

Tags: Election, Kevan Harris, Parliament, Youth

Iran’s New Economic Slump

June 21, 2011 | 10:07am

Kevan Harris

Iran’s biggest economic problem is the growing production slump at its factories and workshops. For both workers and the business elite, Iran's domestic industrial troubles are far more pressing--and generating far more public anxiety--than international sanctions.

The biggest danger for Iran in 2011 is the combination of higher unemployment and inflation produced by government inaction, unintended consequences of subsidy reform, and dwindling foreign capital caused by banking sanctions. The issue has been described as rokood-tavarom, or “stagflation,” by Iran’s leading financial newspaper Donya-ye Eqtesad.

To stimulate the economy, Iran’s Central Bank devalued the international exchange rate of its currency by 11 percent on June 8—a sharp reversal after years of propping up the rial. The exchange rate fell abruptly to 11,750 rials to the dollar. The bank’s action is intended to help Iran’s large industrial sector increase non-oil exports to its neighbors. The devaluation makes Iranian exports of cement, copper, petrochemical and agricultural products cheaper for other countries.

Yet the Central Bank’s move may in fact only compound problems for Iranian businesses. Iran’s industrial sector also needs to import machinery and raw materials, so decreasing the rial’s value may “hurt the economy and the nation’s industry” as imported goods become more expensive, noted parliamentarian Hamid Reza Fooladghar.

The government’s failure to support industry after reforms in energy subsidies last year is a central cause of the slump. For the general population, the regime promised 45 dollars per person monthly to offset increased prices of basic goods, fuel and utilities. But the government of President Mahmoud Ahmadinejad did little to aid industries. It promised the Chamber of Commerce, Industries and Mines to make loans and credits available to alleviate increased costs, but it offered no cash. It also banned business from increasing prices for a long list of household goods to prevent inflation. So, Iranian industries were squeezed on both sides: The government provided no tangible aid as industrial costs soared, but companies were barred from raising prices to cover those costs.

Under these conditions, Iran faces a looming crisis in an already ailing industrial sector. The irony is that subsidy reforms were designed to rejuvenate the economy. Instead, public concern is growing about just maintaining modest levels of employment and business activity, especially in provinces outside of Tehran. In June, the Food Industries Syndicate Chief in wealthy Fars province complained, “Our capable private sector is not afraid of quality or price competition. But the targeted subsidies law, which was supposed to help the private sector achieve quality and price competitiveness, has instead been spent on helping the consumers.” He essentially implied that the government is more worried about its citizenry than its industry.

But if industries continue to stagnate, unemployment is likely to increase, as businesses cut costs by laying off more employees, forego paying overdue wages and pensions to workers, and close down production lines. In an interview, a government official in Tehran explained, “I’ve visited industrial zones near the capital and some are now producing at 40 percent capacity because of cost increases for business after the subsidy reforms.”

In a recent assessment, the International Monetary Fund warned that Iran’s main challenge will be “restructuring of enterprises through the adoption of more energy-efficient technologies, and the broader reorientation of the economy towards less energy-intensive products and services, and production technologies.” Yet even as other emerging economies--such as Brazil, India and China--are successfully retooling industries for a competitive global market, Iran’s approach is decidedly hands-off. Officials are not dealing with basic questions, including what industries will be viable without subsidies.

Sanctions by the United States and Europe--targeted at Iranian government banks, the Revolutionary Guards, and large official institutions--are also now trickling down to small entrepreneurs and industrial workers by further raising the costs of doing business. As a result, Iran is less able to compete with other developing economies in international markets. Despite a vow to help Iranian businesses upgrade infrastructure to become more energy-efficient, the government seems unaware or unsure of how to confront the growing challenges.

Read Kevan Harris' chapter on the bazaar in "The Iran Primer"

Tags: Central Bank, Exchange Rate, Industry, Sanctions, Stagflation, Subsidy

Iran’s labor flashpoint

February 17, 2011 | 9:33am

Kevan Harris

Iran’s labor movement and working class have been pivotal political actors for more than a century, with one of the longest records in the Middle East. Iran has witnessed hundreds of strikes in major industries over the past two decades. And thousands of workers participated in the opposition Green Movement demonstrations during the post-election unrest in 2009.

Workers and young middle-class activists have not yet created the kind of coalitions visible in the Egyptian and Tunisian uprisings. But labor is a key factor to watch because of its deep grievances.

Wages, working conditions and benefits for many Iranians have deteriorated as Iran has shifted from a mostly state-run economy to a mixed economy, with many semi-public and private sector actors. As in other developing countries, such as China, Iran is undergoing “de-industrialization” as older factories are liquidated and shuttered instead of upgraded.

Iranian labor activists have also long demanded the right to form independent trade unions. The Islamic Republic allows only state-run local unions, organized by the official Workers’ House, which erratically deal with issues such as layoffs, nonpayment of wages, pension cuts, and illegal use of temporary contract labor.

Workers’ poverty

Iran has less absolute poverty than Egypt, countries with comparable population size. In 2005, eight percent of Iranians lived below an international poverty line of two dollars a day, while 18.5 percent of Egyptians under this poverty line, according to the World Bank.

But the gap between social classes in Iranian society is wider than in Egyptian society. The Gini index of income inequality scales countries from 1 to 100, from equal to unequal. Iran scored 38 in 2005, while Egypt scored 32. As a result, Iranian laborers and the unemployed poor believe they face acute relative poverty compared to the rich and even the educated middle class.

Labor divisions

As in most developing countries, Iran’s labor force includes both formal and informal sectors. Formal sector jobs—notably in industries such as steel, automobiles, and oil and gas as well as in education and the civil service—are government regulated and subject to wage and benefit contracts.

Informal sector jobs are unregulated. They have no labor contracts. And they are often associated with the underground economy, even though their activities are legal. Informal employment tends to be found in construction, agriculture, transportation, retail, and the textile industry. Many informal workers are considered “self-employed,” since they make their living through piecework in multiple jobs with little security. In 2002, the Statistical Center of Iran reported that the informal sector, depending on the source of measurement, ranged between 33 percent and 49 percent of the urban labor force.

Public Face

Some Iranian labor activists have expressed conditional backing for the Green Movement. But they have also pressed the opposition to emphasize labor grievances among its top demands. Green Movement leaders, including presidential candidate and former prime minister Mir Hossein Mousavi, eventually included concern for workers’ living standards and labor rights in their public statements.

Two important Iranians who speak out on labor issues are:

• Mansour Osanloo, who has been repeatedly imprisoned for helping to establish an independent trade union for transportation workers called the Vahed Bus Workers Syndicate. He is currently in jail and reportedly suffering serious health problems.

• Ali Reza Mahjoub, a member of parliament who also heads the Workers’ House in Tehran. Among law-makers, he has been one of the most critical of President Mahmoud Ahmadinejad’s decision to reduce subsidies for fuel, food and other basic necessities because of the impact on workers.

A long history

Iran’s labor movement has a long and courageous history. Tehran printing workers formed the country’s first trade union in 1906 during the Constitutional Revolution, and leather factory workers carried out Iran’s first industrial strike.

In 1946, 100,000 workers rallied in Tehran for increased wages, while the socialist Tudeh Party mobilized a three-day strike by oil workers demanding better housing and work conditions that lasted three days. It was the largest strike in the Middle East to date. The labor unrest, which endangered British oil interests in the country, prompted the young Shah to declare that growing class antagonism “poison our social attitudes and political life.” He then asserted, “The best way to alleviate them is to apply the laws of Islam.”

Although the shah suppressed independent trade unions, labor activism increased in the 1970s. More than 800 workers went on strike in a Tabriz machinery factory, and deadly clashes took place between workers and police in textile factories in Karaj. Workers were then represented by state-created trade unions, which channeled labor grievances into negotiation, often backed by coercive threats.

Workers joined the 1979 revolution only in its final phase, but their impact was pivotal. The widespread and often spontaneous protests by workers in large enterprises were fatal for the Pahlavi dynasty. General strikes by public servants and oil workers shut down the flow of oil, electricity, and most government offices.

Despite labor’s key role in the revolution, the Islamic Republic clamped down on independent unions. Independent labor councils and left-leaning worker organizations were disbanded, often violently, and replaced with state-controlled Islamic workers’ boards. These organizations policed dissent and directed worker grievances into more manageable forms.

The popular mobilization of workers in the revolution, however, had long-term effects. In 1990, parliament passed a worker-friendly labor law that made layoffs in large enterprises more difficult, reduced the workweek, and stipulated equal pay for men and women. Many provisions are selectively enforced, apply only to formal sector workers, and economic liberalizers have pressed for more business-friendly regulations. The law has gradually been watered down over the past two decades, including under President Ahmadinejad.

Future potential

Tunisia and Egypt’s uprisings succeeded because of a broad coalition of social actors that included strong labor organizations. General strikes by workers in key industries and locations undermined lingering support for President Hosni Mubarak among top military officials, particularly in the final days. Intellectuals and students may launch revolutions, but workers often are the tipping point because of their leverage over a nation’s economy.

Iran has the same potential for broader coalitions between young organizers and the wider community of workers. But historically, formal cooperation between different social actors does not happen automatically. In Egypt and Tunisia, outreach by networks of young activists was pivotal in generating the support from labor organizations that finally forced their presidents to step down.

Read Kevan Harris' chapter on the bazaar in “The Iran Primer”

Listen to Kevan Harris speak on Iran's economy at the Woodrow Wilson International Center for Scholars.

Kevan Harris, who frequently travels to Iran, is a doctoral candidate in sociology at Johns Hopkins University. He recently traveled throughout Iran for a year doing research. He writes a weblog called “The Thirsty Fish."

Tags: Economy, Green Movement, Iran, Jobs, Labor, Poverty, Strikes

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