Even as many Iran watchers stay focused on its nuclear talks with the US, the country itself has been gripped by a nationwide lorry drivers’ strike over the past week.
The unions organising the strike say it has spread to more than 125 cities, including large metros like Tehran, Isfahan and Shiraz. Independent news outlets based outside the country have published reports, images and interviews on the issue. While it hasn’t led to a total shutdown yet, the movement has grown considerably since it was announced last Thursday.
The unions have regularly put out statements calling for solidarity and reiterating their demands, which include making insurance, fuel and spare parts more affordable. Lorry drivers do receive subsidised fuel, but they say it is not enough to cover all the routes they take. They point to corrupt practices such as drivers with the right connections getting fuel beyond their quotas. They are also demanding better pay to help cover their costs.
The strike, in and of itself, might seem to many like a routine call to action. But it has potency when viewed in the context of the broader economic challenges that ordinary Iranians are currently dealing with, including high prices and endemic corruption. With more than 70 per cent of Iran’s goods being delivered by road, a prolonged strike could cripple the country.
Apart from the economic impact of these protests, authorities also worry about the widespread support lorry drivers have received so far. Narges Mohammadi, a human rights activist and Nobel laureate, has backed the strike – as has Tehran’s Bus Drivers Union, perhaps the most venerable trade union in Iran. On Sunday, a pensioners’ rally in the south-western city of Ahvaz featured chants such as “truckers, we support you”.
A crackdown is already in full swing. Many drivers have been arrested in Shiraz, with the city’s prosecutor making threats to anyone who joins the strike. There have been detentions in other regions as well; police in the southern province of Hormozgan arrested an individual for a call to strike on the internet. The drivers’ unions have condemned these arrests, saying they show desperation on the part of the authorities.
The strike has also exposed fissures within the establishment.
Some senior officials have pledged to look into the lorry drivers’ demands. But vague promises are unlikely to quell the strike
The hardliner daily Kayhan has blamed President Masoud Pezeshkian’s reformist government for the country’s economic problems. In an editorial on Monday, it said the fault for the strike lies with the ministries overseeing roads, industry, oil and agriculture. The editorial also singled out Farzaneh Sadegh, the only female member of Mr Pezeshkian’s cabinet, who has often been targeted by hardliners. It didn’t help that Ms Sadegh was on an official visit to Iraq just as the strike got under way, with her opponents accusing her of misplaced priorities.
But while targeting the current administration for Iran’s age-old structural problems might seem politically expedient, such blame games can backfire. In 2017, for instance, hardliners in the north-eastern city of Mashhad staged demonstrations against the centrist administration of Hassan Rouhani – ostensibly over high food prices – in the hope that it would weaken him politically. Instead, they ended up sparking nationwide protests against the broader establishment that is dominated by hardline figures.
Authorities, meanwhile, are using the time-tested tactic of pinning the strike on foreign provocations.
Some senior officials, such as Speaker of Parliament Mohammad Bagher Ghalibaf, have no doubt pledged to look into the lorry drivers’ demands. But vague promises are unlikely to quell the strike, particularly as many lorry drivers point to systemic corruption – including within the establishment – for their problems. Regardless, the government will need to act fast if it wants the strike to end.
The drivers’ demands won’t be easy to meet straightaway, hence a number of organisations both inside and outside government will need to work together. The Ministry of Petroleum will need to provide adequate fuel. The Ministry of Roads and Urban Development will need to make insurance fees more affordable – an onerous task given that increasing the fees has been codified into law. The state will also need to lean heavily on the private sector to raise the drivers’ pay.
Failing to do any of this could risk the strike getting bigger. One need only think back to 2018-2019, when a similar strike mushroomed into widespread protests before it was brutally suppressed. This time around, however, the government also has to contend with a weeks-long bakers’ strike over irregular electricity supply and the aforementioned pensioners’ protests.
All this leaves Iran’s establishment with little option but to act swiftly and positively. The last thing it needs right now, amid all the challenges it faces on so many fronts, is a broader workers’ revolt.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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