Geopolitical Risk in the Middle East – Spotlight Iran: Social Media Crackdown and Civil Unrest

Iran Geopolitical Risk

 

Iran in the context of the Middle East’s geopolitical situation has long provided both political risks and business opportunities. The oil and gas sector, service and agriculture sectors, and a “noticeable state presence in manufacturing and finance services” dominate Iran’s economy. Aiming to move Iran away from a heavily oil-dependent economy, Iranian authorities have implemented a new comprehensive strategy surrounding market-based reforms. The goal is to pivot to high-tech solutions, manufacturing, and boost a knowledge-based economy, along with strengthening privately held Iranian companies’ “innovation and competitiveness.” While this may provide new business opportunities, there is also increased risk in Iran with its highly volatile political situation. Internet outages, social media suppression, and social unrest are ongoing issues, and it’s support of Hamas and Hezbollah terrorism across the Middle East and particularly against Israel creates additional risk and uncertainty for international business. 

IRAN

September 16th marks the 1-year anniversary of the death of Masha Amini. Amini was a young Iranian Kurdish woman who died while in Iranian police custody after being arrested and taken to an “education” center in Tehran for purportedly violating the country’s strict hijab, headscarf laws. Her death prompted a backlash of demonstration, many of which were led by women. Protestors burned hijabs in the street and clashed with police, who used firearms loaded with mettle pellets, batons, tear gas, and water cannon to clear the crowds. Authorities restricted the internet to try to prevent the spread of protests and curbed access to Instagram and WhatsApp, the two most popular social media apps in Iran. Protestors included students, teachers, middle-class professionals, farmers, and others who added their voices, also decrying the state of the economy and shouting for change in the government. Reports from social media showed protests had spread to the energy sector, with images of workers at oil refineries and a petrochemical plant. Human right groups reported 500 people were killed, including 71 minors, hundreds wounded, and thousands were arrested and three people executed in connection with the protests. A September 2023 update claims the situation was even worse.

In the days leading to the upcoming death anniversary, Human Rights Activist News Agency (HRNA) reports Amini's uncle Safa Aeli, a resident of the Kurdish city of Saqqez, was arrested at his home on September 5, 2023 by 10 intelligence agents. Reasons for his arrest have not been given. 

Reuters reports claims that the Iranian authorities are clamping down hard to prevent further unrest by intimidation and instilling fear, “arresting, summoning for questioning, threating or firing people connected to the protests.” Officials of the Iranian government are blaming the arrest on “foreign foes, notably the U.S. and Israel.” According to the Associated Press, snap check points, internet disruption, and university purges are also taking place. Just on September 13th, the Iran Ministry of Intelligence detained three Iranians living abroad under accusations of “leading protests.” These arrests, HRHNA reports, “follow a recent prisoner swap deal between Iran and Western countries…and precede the imminent release of Iran’s frozen assets.” It is believed by many, the report further states, “that the Iranian government detains foreign and dual nationals to exert leverage in negotiations with Western countries of for political purposes.”  Further protests are said to be planned for September 16th.

Companies have numerous geopolitical risks to consider. Iran has a rich cultural heritage and many business opportunities, but human rights issues, social unrest, and Iran’s active financial and military support of terrorism, among other issues are in play. The current social turbulence has led to the U.S. and Australia enacting further sanctions. 

A new stricter hijab bill that is being put forth in Iran has raised alarm; it includes the use of AI, internet, surveillance, and sets up a Basij organization tasked with virtual and physical education of women in “good behavior.” 

In May 2023, the United Nations Human Rights Council’s Social Forum, in a worldwide controversial move, appointed as chair the representative of Iran, disregarding the country’s long standing human rights issues. 

August 24th 2023 also saw Iran’s admission into BRICS, whose anti-US policy and goal is to weaken or replace the US dollar as the world’s default currency

Iran’s recent financial support of the Hamas terrorist attacks against Israel have further increased global concerns, increased regional instability, and have led to re-freezing of the $6 billion prisoner swap deal (for the release of 5 American hostages held by Iran), according to the White House.

For a more in-depth analysis or further information contact Infortal.

            

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