Iran’s contested election: Populism and youth power
By Djavad Salehi-Isfahani, professor of economics, Virginia Tech
During summer 2009, young protestors filled Tehran’s long avenues asking for their “votes back.” They were protesting the outcome of the presidential election of June 12 that pitted the soft-spoken reformist candidate, Mir-Hossein Mousavi, against the firebrand incumbent candidate, President Mahmoud Ahmdinejad. The New York Times reported that one protest march attracted 3 million people, most of them young. Three million is probably an exaggeration — Tehran’s population is 9 million — but in one demonstration that I watched there were lots and lots of people. The strength of the demonstrations took everyone, not least of all Mousavi himself, by surprise. After serving as prime minister in the 1980s he had quit politics in favor of a quiet life in architecture and the arts. What ignited the crowds that turned him from a has-been politician into an instant political hero?
On the surface the protests were all about election fraud, but beneath the surface lay important social and economic issues that deeply concern Iran’s young voters. In the protest march that I watched, I did not see a single banner with a specific social or economic demand. Marchers walked in silence bearing placards saying, “Give us back our vote!” and “Where is my vote?” The announcement on June 13 that Ahmadinejad had scored a sweeping victory with more than 63 percent of the vote came as a complete shock to young voters whose green ribbons had filled the streets of Tehran and other large cities providing visual cues for a reformist electoral sweep. Rumors of large-scale vote fraud spread like wild- fire, bringing Mousavi’s supporters into Tehran’s streets, risking beatings, arrest, and even death. Once the violence erupted, the protest movement took on a life of its own and the hard facts of police brutality and killings of demonstrators overshadowed charges of election fraud.
Youth discontent
No movement of this size and determination can be attributed to a single cause. As an immediate factor, the election was no doubt very important, but the roots of the dissatisfaction of Iran’s youth and a large section of its middle class should be sought in the country’s peculiar demography and its economics. My research at Virginia Tech and at the Brookings Institution in recent years has focused precisely on understanding the changing demography and economics of Iran.
Economic factors have played a large role in the current political crisis in Iran, but not in the way most people think. It is common to read in the Western press about economic malaise in Iran or its “teetering economy,” as in a recent influential Brookings Institution book on Iran, but the fact is that in the past four years of the Ahmadinejad government Iranians have received about $300 billion in oil revenues, a gift of nature that few other developing countries have been able to enjoy. The oil boom has lifted the standard of living for the average Iranian and lowered the poverty rate to one-fourth that of Pakistan and India. In 2007 the economy grew by a respectable 7 percent and poverty was in the single digits.
In addition to rising living standards, there have been impressive improvements in health and education. At the time of the Islamic Revolution in 1979, rural Iranian women had lives not too dissimilar from their Afghan sisters today: most were illiterate, married by the age of 18, and had on average given birth more than seven times. Today, thanks to an innovative primary health care program, the average young rural woman marries at age 23, has about eight years of education, and expects to have only two children. Between 1985 and 2005, the government built about 15,000 rural health houses that have dramatically lowered fertility and child mortality, as I and colleagues Abbasi-Shavazi and Hosseini-Chavoshi documented in our research, supported by the Global Development Network.
This shifting fertility behavior is at the root of Iran’s peculiar demography. The high fertility of the 1980s has created Iran’s largest-ever cohort of young people. Nearly 35 percent of Iran’s population is now between the ages of 15 and 29, compared to 28 percent in Iran of the 1980s and 21 percent in the U.S. in 2000. Youth bulges are often associated with faster economic growth — a demographic gift — such as in East Asia, but in Iran this unusually large cohort of young people has been unable to contribute much to economic growth.
It takes a very dynamic economy to employ a labor force that is growing at more than twice the rate of population increase. Iran’s economy provides a decent standard of living for its citizens but lacks dynamism. Thanks to heavy government regulation, Iran’s labor market provides jobs for 95 percent of its workers aged 30 and above, but keeps its younger workers, especially young women, waiting for several years before they find their first real job. Worldwide, youth unemployment rates are twice as high as for adults; in Iran they are four times as large. In 2006, as usual, the overall unemployment rate was high at 12.4 percent, but for young people it was in excess of 20 percent, while for older workers it was only 5 percent. Seven out of 10 unemployed persons are under age 30. The irony of this inefficient and rigid arrangement is that the young people who are excluded from the labor market are more educated than the older workers who enjoy lifetime tenure.
Education was once considered to be the key to success for Iran’s youth. But with unemployment rates for college graduates in double digits, it is no longer regarded as such. Nevertheless, children work hard in grade school to be able to enter college because without a college degree their chances of success in the job market are even more remote.
An additional complication for young people is what demographers call a “marriage squeeze.” Because of the traditional age difference of about five years between the bride and the groom, the large cohorts of women born during the baby boom of the early years of the revolution reached marriage age a few years ahead of the large cohort of men. As a result, marriage-age women outnumber marriage-age men by about 25 percent. This has played its own part in the delay of marriage in a society that bars commingling of unmarried men and women. Today, nearly 50 percent of youth in their late 20s live with their parents, even those who are married. This is twice the proportion two decades ago.
Changes in health, fertility, and marriage have had the greatest impact on the lives of women. Women in urban areas are now on average more educated than men. Being more educated and having many fewer children than their mothers, their role in the society has changed from procreation a generation ago to educators of the next generation. Yet the society has failed to adapt to this new role. Family laws have failed to keep pace with women’s new social roles. Women still need their husband’s permission to travel abroad and to work.
The labor market is also highly unwelcoming of women. While they outnumber men two to one in entering the highly competitive public universities, they have twice the unemployment rate of men once they graduate. It is therefore no surprise that urban women were at the forefront of the protest movement this past summer.
Growing up in Iran was not always this difficult. Children followed in the footsteps of their parents. The extended family helped with arranging marriages and the community helped with sons following their fathers’ professions. Today, the transitions to work and to family formation are mediated by larger social institutions, and the state plays a particularly large role. Instead of families and communities enforcing youth behavior, the state enforces how they dress and whom they can walk and talk with. No wonder that Mousavi’s campaign, which was rather mute on the economic problems facing youth, ignited only weeks before the election when he announced on television that he would remove the morality police that roam the streets of large cities to enforce the Islamic code for dress and behavior.
Populist revival
While the reformers sent implicit and explicit messages to their supporters about how they would make it easier for Iran’s better-off half to enjoy their economic gains, the conservatives, led by President Ahmadinejad, made promises to the other half. Ahmadinejad won his first election in 2005 by promising to make the Islamic government responsive to the needs of the poor (the original egalitarian promises of early days of the Islamic Revolution), rather than to the needs of the new middle class. The middle class has grown in size considerably in the last two decades. Based on $10 per day per person of income, a basic education, and ownership of assets, I have calculated that the middle class is twice as large as it was 10 years ago and now close to 50 percent of the population. At the same time, the poor, though they have shrunk in numbers, have become more frustrated with their status and more assertive in politics. They heavily supported the revolution against the Shah and the war against Iraq, and were promised a radical change in their economic status. Ayatollah Khomeini, the leader of the Islamic Revolution, always referred to the poor as the revolution’s base. Ahmadinejad, with full backing from Supreme Leader Ali Khamenei, has revived Khomeini’s populism.
While the revolution has improved the lot of the poor in absolute terms, it has not done so relative to others. Inequality has remained stubbornly high throughout the past three decades of Islamic rule. Inequality of incomes in Iran is high by the standards of many developing countries but not unusually high. The Gini index that is used to measure inequality (between zero for perfect inequality and one for perfect equality) has stayed above 0.40 despite all the rhetoric for empowering the poor. This is about the level of inequality in the U.S. and Turkey, much lower than Brazil (0.60), but higher than in Egypt and India (0.35). To the people on the lower end of the economic ladder it seems very much as if after the revolution different people occupy its higher rungs while the ladder itself is the same as it ever was. Populism is thriving again on the promise that this can change, but ideas and plans for making it happen are not clear. For the moment what seems clear is that the government has to remove the political opposition that stands in its way.
No one knows how deep is the popular desire for radical change in the economic system. Most Iranians satisfy themselves by thinking of change as a mere redistribution of the oil wealth. No need to socialize the means of production, as populists all over the developing world promised half a century ago; only distribute the oil bounty in a more fair way. This was the essence of Ahmadinejad’s slogan of taking the “oil money to people’s dinner table,” which many credit for having won him the first election. The problem Ahmadinejad faced in this election was to explain why he was not able to do this, having presided over the distribution of nearly $300 billion of oil revenues in the past four years. Most people who poured into the streets after the election believe that he simply rigged the election. But there is no conclusive evidence of large-scale cheating. A few studies of the official voting data, such as by Walter Robert Mebane of the University of Michigan and from the Chatham House, suggest fraud may have been a factor but do not report any sign of obvious irregularity.
What is more plausible to me is that his populist message continues to resonate with many people in Iran for two reasons. First, President Ahmadinejad was able to revive his old charge — stunningly on national television — that a corrupt economic oligarchy, led by the former president Akbar Hashemi Rafsanjani, had stood in his way. Second, he charged that both reformist candidates, Mehdi Karoubi and Mousavi, were supported by Rafsanjani and this oligarchy, thus giving the voters a choice between a candidate (himself) who had failed to deliver fully on the promise of redistribution and the reformists who had actually opposed it. I came across many Iranians who thought this was a real choice.
In the last few months before the election, Ahmadinejad managed to deliver the first installments on some of his new redistributive policies. The government began the distribution to rural families of Justice Shares. These shares offer equal ownership of the publicly owned enterprises to every Iranian. An initial cash dividend ranging from $70 to $500, depending on family size, paid out in the months before the election seemed to have driven the populist message home. Millions are now in line to receive these shares. Most reformist candidates dismissed this plan, offering instead to privatize the public enterprises. Privatization has had mixed results in Iran with charges of corruption. (Similar anti-capitalist sentiments that arose as a result of botched privatization in the post-Soviet era have fueled Vladimir Putin’s rise in Russia.)
One thing that Ahmadinejad has going for him is his modest background. He still lives in his home in Tehran’s lower-middle-class neighborhood, which few western reporters visited when they reported on Iran’s Green Revolution. Two-thirds of Iranians whose incomes fall below the national average probably trust him more than Rafsanjani to redistribute the oil money. Millions are hoping to benefit from his subsidized loans to small enterprises and mortgages for middle-class housing.
However, there are at least three serious problems with this populist agenda. First, oil prices are now well below the price at the time these promises were made, and delivering on them will be very difficult in the coming years. Second, even if oil prices partially recover, there is simply not enough money to raise the incomes of two-thirds of the population by much. Oil income per person amounts to only 10 percent of the GDP per capita. Third, redistribution does not create jobs and will not help Iran’s educated youth to find work, get married, and complete their transition to adulthood. With a lack of trust between the government and youth deepened, it is hard to imagine to whom populism will appeal in this critical social group.
Whatever one may think of Ahmadinejad’s re-election, it has one advantage – it gives Iranians a chance to test populism for four more years and decide if it is in fact capable of solving their complex social and economic problems.
