Iran protests a microcosm of corruption-fueled discontent in wider region

Liz IvyLiz Ivy | Updated: 27-10-2022 12:11 IST | Created: 27-10-2022 12:07 IST
Iran protests a microcosm of corruption-fueled discontent in wider region
Representative Image. (Photo Credit - Reuters) Image Credit: ANI

Over one month in, the wave of protests washing over Iran since 22-year-old Mahsa Amini's death at the hands of Iran's "morality police" shows no signs of abating. The Iranian regime has unleashed a brutal crackdown to curb the most significant challenge to its authority since the 2009 Green Movement, killing 244 people to date, including 32 children, among them, 15-year-old Asra Panahi and 17-year-old Abolfazl Adinezedah. But the regime's cowardly acts of barbarism have failed to break the spirit of an Iranian people united by a drive for change.

While triggered by its persecution of women, the scale of this popular uprising reflects broader public grievances, most notably the deeply entrenched corruption that has torpedoed the economy. Beyond Iran, corruption has long driven poverty and unrest in the wider region, particularly in Iraq and Syria, where citizens languish in the ruins of war while their leaders thrive.

A revolution gone awry

Since Iran's Islamic Revolution of 1979, systemic corruption has been the foundation on which the regime has consolidated its grip on power and enriched its elites.

A particularly egregious example is the $3 billion corruption scandal within Mobarakeh Steel Company, one of Iran's largest companies, an investigation of which has linked the administration of former president Hassan Rohani to accepting bribes and diverting illicit funds to the military. According to investigative journalist Saba Azarpeik, grand ayatollahs, the Intelligence Ministry, and state media outlets were allegedly on the company's payroll. Given Mobarakeh's "semi-public" status, government-appointed management, and state majority ownership, the regime is ideally positioned to plunder this key asset of the Iranian economy, as it does with "even the smallest private companies," according to economist Ahmad Alavi.

State corruption in the post-revolution era has fueled a long-term economic free fall, with anywhere from 52% to 80% of the population living below the poverty line, the middle-class hollowing out, youth unemployment exceeding 16%, and runaway inflation pushing small businesses to the cliff edge. What's more, economists expect that corruption will inhibit an economic rebound even in the event of international sanctions relief.

It is in this dire economic context that the current protests have ignited. Not satisfied with crushing dissent domestically, Iran's Revolutionary Guard Corps has recently shelled Kurdish opposition groups based in Iraqi Kurdistan that the regime accuses of fueling protests, killing 16 people and injuring over 50.

Sowing seeds of instability in Iraq

Iran's attacks on Iraq's Kurdistan province are compounding the hardship already facing these communities, who suffer greatly from the corruption of the ruling Barzani dynasty that has pillaged the region for years while leaving its people in poverty.

The signs of Barzani's flagrant corruption are plentiful: dissenting journalists and activists silenced by a weaponized judiciary, poor public services, patronage networks, and high unemployment for those without regime connections. This situation has prompted many citizens to take to the streets – protests that authorities have ruthlessly suppressed.

The Barzani's mafia tactics were on full display in the misappropriation saga involving French telco Orange and Kuwaiti logistics firm Agility. Back in 2011, Orange and Agility invested $810 million for a 44% stake in Korek Telecom, a mobile phone company founded by Sirwan Barzani – a first cousin of both the Prime Minister and President. While the local telecom regulator approved an option for the foreign duo to assume eventual majority control, the venture soon went south.

In 2013, CMC suddenly informed Agility and Orange that the company's ownership structure would return to its pre-2011 state, putting Korek under fully local ownership, with a 75% stake for Barzani and no compensation for their seized investments. Such blatant misappropriation cases severely weaken investor confidence in the region, sacrificing the economic opportunities of its people while enriching its corrupt leaders.

Syria's twin plague

As in Iraqi Kurdistan, war-linked devastation has been exacerbated by the rampant corruption of the Assad regime and its network of business elites. An over decade-long civil war has left a stunning 90% of Syrians in poverty and 60% in food insecurity, while the economy has shrunk by 60% and inflation has risen above 300%. But President Bashar al-Assad has capitalized on their misery to enrich himself and his cronies, diverting tens of millions in humanitarian aid funds and confiscating food aid to sell on the black market during a devastating bread crisis.

What's more, his regime has launched a parasitic offensive on businesses in Syria, plundering or even seizing dozens as part of a ruthless cash grab. One of the most notable victims has been MTN Syria – the country's second biggest mobile operator – whose executives were arrested by the regime's secret police and subsequently demanded to pay the authorities millions while facing threats to have its license revoked. What's more, the courts appointed an Assad ally as the company's head, prompting MTN, a South African company, to announce its exit from an "intolerable" Syrian market. Not limiting itself to corporations, the Assad regime further funds itself through the arbitrary arrest and extortion of its citizens.

And to maintain his grip on power, Assad has unleashed an almost unbelievably hypocritical anti-corruption crusade, which has served the twin purpose of purging potential rivals – including loyal family members – and quelling deep public frustration and protests over corruption and appalling living conditions.

Deep-seated corruption in the volatile Middle East is undermining economic prospects while sowing the seeds of further instability. The Iranian people, as well as those of Iraq and Syria, have long endured political repression and economic misery while their leaders have shamelessly enriched themselves through illicit means. The international community must therefore do everything in its power to help keep alight the flame of popular uprisings that bring the hope of a better future.

(Disclaimer: The opinions expressed are the personal views of the author. The facts and opinions appearing in the article do not reflect the views of Devdiscourse and Devdiscourse does not claim any responsibility for the same.)

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