Iranian Crackdown on Protests Imposes Economic Toll
By Sune Engel Rasmussen, Oct. 20, 2022, WSJ

The Iranian government’s crackdown on the weekslong protest movement is taking a growing toll on the country’s sanctions-pummeled economy, hitting a broad swath of ordinary citizens, as authorities’ slowdown of the internet has choked vital payment
channels for businesses.

So far, Iran’s internet restrictions have cost the IT industry and businesses around $24 billion, according to a member of the Tehran Chamber of Commerce, Farzin Fardis, cited by the reformist-affiliated news outlet Entekhab. Mr. Fardis also said that
over the past month, up to 700,000 shops selling goods through the social-media app Instagram had closed down.

Since the unrest erupted in September, Iranian authorities have shut down the internet in certain areas, and slowed down the speed in others, a tactic the government has used in recent years to prevent protesters from organizing through social media and
spreading information to the outside world about the crackdown by security forces.

Sparked by the death of a young woman arrested for allegedly violating the country’s dress code for women, the protests are propelled by young Iranians, particularly women and girls, some as young as high-school students who have called for more
freedoms and an end of the country’s Islamic system of governance.

The economic damage wrought by the government’s own suppression of dissidents undermines promises by President Ebrahim Raisi who during his election campaign last year pledged to create one million jobs to improve Iran’s economy. Coupled with
domestic mismanagement, American sanctions have severely battered Iran’s economy, slashed its GDP, driven up its public debt and helped undermine the national currency, the rial.

Lawmaker Jalal Mahmoudzadeh on Wednesday criticized Mr. Raisi for not delivering on his election promises and called for the ouster of the telecommunications minister for the internet shutdowns.

“One of Mr. Raisi’s electoral slogans was: ‘We won’t let people face internet problems,’” Mr. Mahmoudzadeh said, according to the Jamaran news site. “The telecommunication minister should have been impeached.”

Middle-class Iranians and businesspeople are likely to bear the brunt of the economic damage.

The deputy head of Iran’s chamber of commerce, Hossein Selahvarzi, warned last week that the filtering of internet services would lead more Iranians to leave the country and decrease investment, according to the reformist newspaper Mardomsalari.

“If the government decides that providing economic welfare for a majority of Iranians is not a political priority, then the threshold for this kind of economic cost that the state is willing to tolerate is going to be much higher,” said Esfandyar
Batmanghelidj, chief executive officer of Bourse & Bazaar Foundation, a London-based think tank focused on the Iranian economy. “That also means that the protests need to be much larger and sustain for longer to impose the cost necessary to achieve
their goals,” he said.

Mr. Raisi on Wednesday called on authorities to promote Iran’s domestic internet, which only allows access to national websites. His communications minister, Issa Zarepour, proposed criminalizing the use of virtual private networks, which many Iranians�
��including officials—use to access blocked websites. State media later amended Mr. Zarepour’s remarks, saying he had meant that the sale of VPNs, not the use of them, should be subject to prosecution.

Either way, previous experience indicates that moving Iranians onto the national internet is unlikely to solve the economic problems for businesses.

In November 2019, when Iranian authorities disconnected the country from the global internet for a week and forced Iranians to use only the national internet, the country lost roughly $3 billion in internet payments compared with the month before,
according to calculations based on statistics from Iran’s central bank. A total internet shutdown costs Iran an estimated $37 million a day, according to internet monitor Netblocks.

The closures of online trade in particular affect women who only make up about 14% of the country’s official labor force, according to the United Nations, but have gravitated toward informal jobs in internet businesses, such as online shops and
language teaching.

https://www.wsj.com/articles/iranian-crackdown-on-protests-imposes-economic-toll-11666286910

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