Iran tries economic reforms as protests spread across the country

The Iranian government is attempting risky economic reforms as it tries to meet the escalating demands of protesters who are seeking fundamental political change, a clampdown on corruption and an easing of the squeeze on living standards.

- Patrick Wintour

Entering their ninth day yesterday, the protests spread to 26 of Iran’s 31 provinces, with a US-based human rights group claiming that the death toll had passed 20 with nearly 1,000 arrests.

A switch in the system of foreign exchange subsidies announced by Iran’s president, Masoud Pezeshkian, may lead to a short-term rise in food prices but is intended to be ameliorated by a new system of direct subsidies to consumers. Previously these were given to those importing products from abroad through exchange rate subsidies. But the decade-old system was wide open to corruption and leakage.

Official figures released yesterday showed that inflation had reached 52.6% in December. Inflation, and a collapse in the value of the rial, sparked the protests that began in Tehran’s bazaar but have now spread to more than 100 towns and cities, including many smaller towns.