Four years on, Iran's Khatami inherits his own ailing economy

Published July 17th, 2001 - 02:00 GMT

Reformist Iranian President Mohammad Khatami must appoint a new cabinet by August 15 before entering his second four-year term in office, amid a furor over economic woes as laborers take to the street in protest. 


When Khatami first came to office in 1997, the moderate head of state and his reformist supporters appeared confident that the shaky economy wracked by spiraling inflation and chronic unemployment could be fixed with social and political reforms. 


Fours years on, the moderate cleric has not only seen major setbacks to his ambitious reform plans with what he once said was a "crisis every nine days," but he is now faced with rising public anger over the country's economic troubles. Laborers have taken to protest mass layoffs and defaults on payments by employers. 


"The parliament must put an end to these protests and inject funds in the industrial sector," reformist female MP Soheila Jelodarzadeh said on Sunday, July 15. She warned that "the workers' crises can have political consequences." 


Jelodarzadeh had addressed reporters while factory workers were protesting outside the parliament against a one-year non-payment of their wages and criticizing the government's privatization methods. The demonstrators complained that factories had been placed in the hands of "people who are not productive." 


The rally by hundreds of factory workers, the third in just four weeks, sparked clashes with police forces, leaving eight of the protestors injured according to the student ISNA news agency. 


"We ask ourselves whether the government is truly aware of the paralysis of our economy, or whether it will be able to control things from now on," said political analyst Daryush Abdali who warns that the nation's stagnant economy will widen the rift between conservatives and reformists. 


Claims by Khatami's opponents, the nation's powerful conservatives, that Khatami's political and social reforms were forcefully being pushed through at the expense of the nation's already feeble economy, appear more and more valid. 


According to official estimates, some 2,500 industries, notably in the textile sector, are facing closure because of high production and factory maintenance costs ― the majority of which are between 20 and 60 years old. 


"The machines are old, the taxes high, and production is threatened by uncontrolled imports," Jelodarzadeh said, adding that "workers are tired." Industrial workers, who represent some 25 percent of the nations' active workforce, and farmers count as the main victims of the sluggish economy. Tea and rice growers regularly organize protests in the hope of attracting the attention of officials. 


Meanwhile, the country's chronic unemployment is officially rated to be over 15 percent and widely believed to be much higher, while the 12 percent official inflation rate is believed by experts to be as high as 20 percent. 


Some 30 million of Iran's 62-million-strong population are under the age of 25, and an estimated one million are ready to enter the job market every year. 


Just after his landslide re-election on June 8 to a second four-year term in office, the maximum allowed under the Iranian constitution, Khatami promised to "priorities" the problem of unemployment ― notably for the nation's youth who count as his staunchest supporters and helped sweep him into office in May 1997 and again last month. 


But the reformist head of state who only reluctantly announced his decision to seek a second term in office in the face of stiff conservative opposition, also stressed that the fight would require the "cooperation of all the workings of power." 


The centrist Entekhab daily on Monday in a commentary on the rising number of labor demonstrations said: "Even though these protests do not appear to have a political character and are related to professional and economic problems, ignoring them can lead to their expansion in the near future and trouble the government." ― (AFP, Tehran) 


by Kianouche Dorranie 


© Agence France Presse 2001

© 2001 Mena Report (

You may also like