x Abu Dhabi, UAESaturday 22 July 2017

Economic pressures are pushing Iranians to the brink

Many ordinary Iranians are beginning to share a belief that they are being used as pawns in a larger political game. Beyond their economic impact, sanctions have also created a sense of isolation.

As Iranians brace for a long-awaited government plan to remove subsidies on fuel, electricity and bread, they also risk being squeezed by a set of economic sanctions that increasingly seem to be lacking clarity on the part of the US administration.
Despite the premise that sanctions were meant to deter Iran's development of a covert nuclear weapons programme, the United States has been rather vague about its intentions. What does seem apparent, however (and the US president, Barack Obama, alluded to it in an unprecedented interview with the BBC Persian Service late last month) is that the sanctions have already had the effect of raising prices on goods and services, dramatically impacting the lives of many people in Iran.
"This is not a matter of us choosing to impose punishment on the Iranians," Mr Obama said. "This is a matter of the Iranians' government ultimately betraying the interests of its own people by isolating it further."
Iranian officials have responded to the impact of sanctions with mixed messages.
At an International Monetary Fund meeting in Washington, DC earlier this month, Iran's finance minister, Shamseddin Hosseini, said: "After these sanctions we are a much stronger country," adding that although sanctions caused some difficulties "when people solve problems, they get stronger. Today, we are much stronger".
But last month, the former Iranian president Ayatollah Ali Hashemi Rafsanjani told the Assembly of Experts, one of the country's most influential clerical bodies, that "we have never been faced with so many sanctions. I would like to ask you and all the country's officials to take the sanctions seriously and not as a joke."
Mr Rafsanjani's message about who is to blame for the sanctions and their effects was characteristically ambiguous, but many Iranians are beginning to share a belief that they are being used as pawns in a larger political game.
Particularly, a new ban on the import of luxury goods to the US has made many feel the sting. The embargo includes Iranian pistachios, caviar and, most significantly, handmade rugs - one of Iran's most important industries that employs millions. "We're wondering why the American government would do this," said Mohammad Mehdizadeh, an exhibitor from the city of Kerman, one of Iran's oldest weaving centres. "These sanctions will only affect people in the trade. What connection does the rug business have with politics?"
In response to such sweeping prohibitions, the Iranian rial fell 22 per cent against the dollar earlier this month before Iran's central bank infused large amounts of dollars into the economy to help to stabilise the currency. Most observers agree that this is only a temporary fix and that the rial will face more trouble in the coming months.
Meanwhile, the price of goods is quickly on the rise, with a kilogram of meat selling for approximately $20 (Dh74) in Tehran, a city where the average monthly salary is under $500. Transportation costs have also risen. Subsidies on consumer goods and utilities, most notably on petrol, which has helped to create one of the most energy-wasteful societies on earth, cost the Iranian government an estimated $100 billion each year.
Plans have been in the works since last year to replace several of the subsidies with cash payments to Iran's poorest citizens. But the subsidy lift on petrol has been particularly contentious, as there has been little agreement among the executive and lawmaking branches of the Iranian government as to what the public reaction will be, with many fearing it could lead to further discontent.
At the moment, drivers are given a ration of 60 litres a month at approximately $.10 a litre; beyond that allotment, prices are about $.40 a litre. If the rationing system is lifted, the price is expected to increase to $.80 a litre, more than the price of gasoline in most of the US. Prices at the pump have as much to do with Iran's long-standing inability to refine domestic petroleum as they do with new sanctions.
Beyond their economic impact, sanctions have also created a sense of isolation among Iranians. As one Tehran-based photojournalist said: "Our connections with the outside world are diminishing every day. It feels like we're being made into another North Korea, and it's not just our leaders doing this. It's the rest of the world, too."
Although Iran has been walled off from the world over the past three decades, trade and the movement of people have integrated elements of Iran internationally. But this too has suffered. "Apart from the obvious impact on prices, the sanctions have other side effects," said a travel agency manager who asked to be identified only as Morteza. "The end result is that people think that there is something wrong with our country. Usually we have many foreign tourists this time of year, but I think many potential clients have been scared away."
Worryingly, while inbound tourism has suffered, outbound operations are booming. The country's historic brain drain is on the rise thanks to worsening conditions associated with sanctions. "Anyone who can afford to is leaving," said Shabnam, a 26-year old graduate student. "Before, people only wanted to go to the US or Europe. Now they'll go anywhere they can."
Jason Rezaian is a freelance writer based in Tehran