Iran signals caution amid uncertain Gaza truce talks

"I invited [Abbas] Salehi (the proposed minister for culture), but he kept refusing. When I told Khamenei that Salehi wouldn’t come, he picked up the phone and told me to tell him to accept,” Pezeshkian confessed. The admission revealed the control the Supreme Leader exercises over the supposedly independent branches of government in Iran, where loyalty to Khamenei trumps any other metric for government selection process, eclipsing merit-based selection.

The parliament, which many view as a mere formality, voted to confirm all 19 of Pezeshkian’s proposed ministers on Wednesday. The votes were overwhelmingly in favor, with figures like Defense Minister Aziz Nasirzadeh winning 281 and Education Minister Alireza Kazemi and Communications Minister Sattar Hashemi receiving as many as 268 and 264 votes out of a total of 290, respectively. Even the least supported nominee, Mohammad Reza Zafarghandi for Health Minister, still secured 163 votes.

Pezeshkian also revealed that ministers like Abbas Araghchi (Foreign Affairs) and Farzaneh Sadegh (Roads and Urban Development) were personally vetted and endorsed by Khamenei.

“I gave the entire list to Khamenei. Everyone came with coordination and consensus,” Pezeshkian admitted.

He urged the MPs "not to disrupt the harmony and unity within his team" and said, "I'm not saying these people are without flaws or that we are ideal, but we have reached an agreement on them."

The president further emphasized, "I had ideals in mind, but when I saw there was no agreement or consensus, I stepped back from them because consensus is more important to me. I compromised, and I will continue to compromise for the sake of unity."

Pezeshkian added, "We reached an agreement with the security organizations, the IRGC, and the intelligence agencies, and together we presented this cabinet list."

The disparity between the system's frequent boasts of democratic principles and its observed practices has led observers to question the authenticity of the system's institutions.

Many believe that the Wednesday parliamentary session was less about debate and decision-making, and more about rubber-stamping the will of Iran’s ultimate authority. The overwhelming vote counts—such as 272 votes for Abbas Salehi—highlight the absence of genuine opposition within the parliament, where Khamenei’s word is law.

Nurses in 50 hospitals are leading the charge in terms of the number of strikes, followed by telecom retirees in five provinces, retirees from the banking and social security sectors, and workers from the oil and gas industries. Additionally, farmers in Isfahan have staged a sit-in. The nurses have garnered support from retirees, teachers, and the truckers' union, further amplifying their cause.

When examining the recent history of trade union and non-union protests, a stark contrast emerges between the periods before and after 2017. Since December 2017, labor protests in Iran have evolved from spontaneous, uncoordinated street demonstrations into continuous, well-organized movements characterized by networked communication among similar professions. While various factors—economic, political, social, environmental, and legal—have influenced these protests, economic hardship has played the most significant role.

Amid these street protests, certain recurring slogans resonate: "Our problem is here, yet they blame America," "Retirees, shout for your rights!" "Only in the streets can we claim our rights," "We’ve seen no justice, only lies," and "When it’s our turn, the treasury runs dry."

This piece zeroes in on a single aspect of Iran's socio-economic landscape: why don’t these expressions of discontent coalesce into larger waves of protest against the government, thereby lowering the cost of dissent? The backdrop to this question is the harsh living conditions in Iran, particularly for those dependent on monthly salaries. While annual salary increases hover around 10-20%, inflation rates soar above 40 percent.

Three key factors contribute to this situation: 1) the ongoing cat-and-mouse game between the government and protesters, 2) the lack of strong, comprehensive trade unions and the severe political repercussions for activism—including the threat of imprisonment and even execution—faced by union and labor leaders, and 3) the government’s monopoly over the labor market, which drastically limits opportunities for re-employment.

Unions long disbanded

After shutting down all labor unions in the 1980s, the Islamic government introduced state-funded Islamic labor councils. However, these councils did little for workers, given their reliance on the state. As a result, in the 1990s, some workers and employees began establishing their own unofficial unions. During the last three decades, the government has arrested and imprisoned thousands of union activists for their participation in the establishment of trade unions and even issued a death sentence for some of them, such as the recent death sentence for Sharifeh Mohammadi. The most famous and powerful of these unions are the Drivers' Union of the Tehran Public Transportation, Haft Tappeh Sugar Cane Mill Labor Syndicate, and the Teachers' Union Council.

For this reason, organizing a strike and holding a protest rally in Iran is very difficult and risky. However, between 2020 and 2021, more than 2,500 gatherings (mostly held without permit) were held throughout the country. According to a former Ministry of Interior's spokesperson, during the first term of the Rouhani administration (2013-2017), people in different cities of Iran held about 43 thousand gatherings "with or without permission" to pursue their demands in various fields. Even if this number seems unreal, Iranians’ grievances are limitless.

Livelihood issues are deteriorating the quality of life and placing such unbearable pressure on wage earners that workers and employees are willing to endure the risks of repression to take to the streets in protest.

Carrot and stick

One of the Islamic Republic's common tactics for dealing with union and profession-based protests when they spill into the streets involves a combination of harsh threats, such as dismissal and imprisonment, alongside small concessions to placate some protesters. For instance, during the pensioners' protests coinciding with the presidential election, the government paid 3 million tomans ($50) into their accounts—far short of the additional salary they legally demanded. This tactic appeased a portion of the protesters, causing the movement to lose momentum. The widespread teachers' protests in recent months were handled similarly, with mass arrests and the payment of one month’s extra salary to retiring teachers and assistant teachers, which helped to quell the unrest.

Risk of permanent unemployment

The government in Iran is the largest employer, with about eighty percent of the economy controlled by three powerful economic entities under the supervision of the Leader’s office, the IRGC, and state-owned companies. Beyond these, public resources are managed by the government, and most public services are state-owned. In this environment, anyone dismissed for organizing or participating in a trade union must effectively say goodbye to the public sector—and likely to stable employment as well. The government and these economic empires act like a giant gatekeeper, monopolizing the job market, enforcing ideological hiring practices, and making intimidation easy.

Lawmaker Hamidreza Goudarzi described the ongoing energy shortfall and frequent water and electricity outages as a "critical crisis for the Islamic Republic." He warned that this issue is on the verge of inflicting serious damage on the industrial sector and further fueling public discontent.

Mansour Alimardani, the representative from Abhar, referred to the frequent power outages in industrial zones, "The power cuts have devastated many industrialists."

The main reason for lack of power in a country that has the second largest natural gas reserves in the world is lack of investments and inefficiency in management. Iran is deprived of foreign investments due to its confrontational foreign policy and a nuclear program deemed dangerous by many countries. The government also fails to invest in infrastructure, prioritizing the military and foreign adventures.

MP Mohsen Biglari observed, "Throughout this sweltering summer, we have endured consistent household power outages, with agricultural electricity being disrupted for five to six hours daily. Given these circumstances, can we genuinely expect a surge in agricultural production? Furthermore, 40% of our villages lack access to household water supply networks; even among those connected, more than half rely on severely outdated plumbing systems."

Abbas Aliabadi, the proposed Minister of Energy, also identified electricity and water shortages as a fundamental governance issue, asserting that it transcends the mere effects of seasonal heat. He projected that, based on current estimates, the annual shortfall in electricity could surpass 18,000 megawatts.

Aliabadi also highlighted that the National Development Fund has deprioritized investments in the electricity sector, noting that the Ministry of Energy's accumulated obligations have led to significant losses for previous investors, deterring new investments.

The ministerial nominee opposed the "burdensome government bureaucracy," underscoring that "the government should not, and cannot, serve as the primary executor."

On the issue of water, Aliabadi pointed out that the current negative water balance stands at six billion cubic meters annually. He issued a stern warning: "The water situation is critical. We are at a tipping point, and continuing this trajectory is untenable."

Despite the discussions, no substantive solutions were proposed. The only measure presented as a remedy was Aliabadi’s pledge to "empower citizens to sell their electricity quotas in a competitive market." He explained that individuals would have the option to either consume their electricity or sell it at premium international or industrial rates, thereby realizing the true value of their assets. However, this presupposes a reliable supply of electricity—a currently unmet condition.

In recent years, the Islamic government has consistently struggled to meet the nation's electricity demands, with recurrent failures plunging hundreds of cities and villages into darkness each summer. This year, however, the situation has reached a critical inflection point, as the frequency and duration of blackouts have escalated, reflecting an increasingly stark disparity between supply and demand.

This mode of defense has become central to the parliamentary hearings, where legislators are tasked with ratifying the ministerial appointments made by the newly elected president, Masoud Pezeshkian.

In theory, the president and his cabinet are required to present a comprehensive governance agenda. In practice, however, the discourse has largely bypassed substantive policy discussions, focusing instead on the ministers' loyalty and compliance, especially their willingness to align with Ali Khamenei's directives.

Contrary to parliamentary expectations, Pezeshkian has not presented a detailed road map for his administration. Instead, he has merely cited the Seventh Development Plan—a continuation of the framework approved during Ebrahim Raisi's tenure in November 2023—and reiterated his commitment to the policies endorsed by Khamenei. Critics say that the Seventh Plan itself is an unrealistic document, full of economic wishes that simply cannot be realized. It is the continuation of the previous failed plan.

Iran's Sixth Five-Year National Development Plan, originally slated to conclude in 2021, was extended to mid-2024 due to its failure to achieve its intended economic objectives. According to an analysis by the Parliament Research Center, only 30% of the plan was partially implemented, 40% remained unaddressed, and the remaining 30% could not be accurately assessed. Despite its formal approval, the parliament has deemed the latest plan deficient.

Pezeshkian's strategy appears to be a mere perpetuation of this existing plan, coupled with a vague adherence to Khamenei’s orders, devoid of any substantive detail. MPs defending the proposed ministers similarly lean on this rationale, equating loyalty to the establishment with a sound governance strategy, effectively rebranding familiar rhetoric as policy.

While the overwhelming majority of the proposed ministers are expected to receive parliament’s endorsement—dominated as it is by hardline factions—there have nonetheless been murmurs of discontent within the legislative body.

In their addresses, a few dissenting MPs expressed concerns that Pezeshkian has failed to present an independent policy framework separate from the Seventh Development Plan, limiting the scope for meaningful debate or opposition.

Alireza Salimi, a Tehran representative, took issue with Pezeshkian's approach, noting that he has merely reiterated the Seventh Development Plan as his own rather than offering a novel or detailed strategy. Salimi emphasized, "The Guardian Council has already approved the Seventh Development Plan. Thus, debating support or opposition to it is a futile exercise."

Another parliamentarian, Mehdi Kouchakzadeh, raised a procedural objection, underscoring that the primary objective of the session was to "examine the government’s program." Addressing Mohammad Bagher Ghalibaf, the Speaker of the Parliament, the lawmaker, inquired, "Has Pezeshkian’s plan been submitted to you for dissemination among us?"

He further highlighted that Pezeshkian has claimed his agenda is grounded in the Nahj al-Balagha—a centuries-old compilation of sermons, letters, and sayings attributed to the first Shia Imam, Ali, which Pezeshkian often recites in Arabic—and the vision of the Supreme Leader. Kouchakzadeh then provocatively questioned, "Are the dissenting MPs opposing the Nahj al-Balagha and the Seventh Development Plan?"

"Today, we are selling oil under deplorable conditions—at low prices with steep discounts—and in return, we are importing substandard Chinese goods at best," Morteza Behrouzifar from the Institute of International Energy Studies remarked in a candid discussion with a local website about the ongoing challenges facing Iran’s oil industry.

In an interview with ILNA, Behrouzifar further highlighted that Iran's current situation leaves it heavily reliant on China, which poses significant risks to the nation's economic sovereignty. This starkly contrasts with official claims that Iran sells crude oil to 17 nations, including some in Europe.

The expert also criticized the broader strategic missteps within the oil sector, describing them as rooted in "showmanship" rather than substantive achievements.

Over the past three years, he said there have been claims of massive foreign economic contracts—exceeding $100 billion—but these were often mere memorandums of understanding presented as binding agreements.

He argued that this has led to the depletion of national resources, including the National Development Fund (NDF), without any significant return on investment. "We did not achieve any results proportionate to the money invested," he noted, underscoring the inefficacy of these deals.

NDF, Iran's national wealth fund, is intended to reserve around 30% of oil profits for future generations. However, due to international sanctions and an inefficient economy that have perpetually strained the government's budget, the majority of the over $100 billion in savings has already been depleted.

The most recent instance that could be inferred from his remarks is the May agreement, in which Tehran Municipality discreetly finalized a two-billion-euro contract with a Chinese firm for the import of transport and traffic surveillance equipment, including electric buses. This clandestine deal sparked significant backlash, even among members of the city council.

"The president of the 14th government [Masoud Pezeshkian] must understand that if these conditions continue, the oil industry will not be able to survive," Behrouzifar warned.

Despite US sanctions reinstated in 2018 over Iran's nuclear program, China has continued to purchase Iranian oil, but under conditions that are far from favorable to Iran.

Last July, The Wall Street Journal reported that Iran's crude oil exports had surged to their highest levels in five years, albeit at steep discounts of up to $30 per barrel. The report corroborated estimates indicating that Iran exported 1.6 million barrels per day in May and June, a significant increase from the 250,000 barrels per day recorded in 2019 and 2020, shortly after the US reimposed comprehensive sanctions.

In addition to discounts, China apparently does not pay in cash for most of the oil, because Iran is also under US banking sanctions. Although on paper Iran annual oil revenues reach $35 billion, it is not clear how much hard currency Tehran receives.

China imports Iranian oil through tankers, which avoid detection by operating without transponders. Known as "ghost ships" or "dark fleets," these vessels employ sophisticated methods to conceal their ownership and movements, enabling them to circumvent international sanctions. They partake in high-risk operations such as ship-to-ship transfers in open waters and deactivate Automatic Identification System (AIS) transponders to mask their identities and evade detection.

Once they reach Chinese shores, the oil is rebranded as Malaysian or Middle Eastern crude. It is primarily bought by "teapots," small independent refineries that have absorbed the bulk of Iran's oil exports since larger state-owned refineries withdrew due to sanction fears.

As the Atlantic Council reports, China’s payments to Iran are made in renminbi through smaller, US-sanctioned financial institutions like the Bank of Kunlun. This minimizes exposure for China’s larger banks but leaves Iran with limited options for using the currency.