TEHRAN – Nearly six years ago, Iranians took to the streets to celebrate Tehran’s nuclear deal with world powers. They saw it as an opportunity for the Islamic Republic to re-enter the world economy and create opportunities such as buying aircraft and selling oil on the international market.
Today, the dream has disappeared into a daily crippling nightmare of high inflation, an ever-weakening national currency and high unemployment exacerbated by the coronavirus pandemic.
The West considers Iran’s nuclear program and tensions in the Middle East to be the most important issues facing Tehran, but those living in the Islamic Republic repeatedly point to the economy as the most important issue it faces ahead of the June 18 presidential election. come to a standstill.
Whoever takes the presidency after the relatively moderate President Hassan Rouhani will face the unenviable task of trying to reform Iran’s largely state-controlled economy. Attempts to privatize it have turned corruption accusations around while many are losing their life savings and raging nationwide protests.
“One day they said the nuclear deal had been accepted, everyone was happy, the dollar fell more than one day,” said Mohammad Molaei, a 50-year-old trader. “Then things start to happen. Missiles are fired. The nuclear deal is in the works. One tears it apart, the other burns it. Only the people lose. ‘
Iran’s economic freefall accelerated when then-President Donald Trump unilaterally withdrew America from Tehran’s nuclear deal with world powers in 2018. As a result, crushing sanctions were imposed on Iran, harming the already struggling economy.
Perhaps nothing illustrates the crisis gripping Iran’s economy, as well as the fall of its currency, the rial. In July 2015, amid the fierce celebration of nuclear deals, $ 1,300 bought rials. Today buys $ 1,238,000 rials.
The weakening of the rial has led to the value of the money that Iranians are collapsing in the bank, as well as the reduction of benefits for retirees. The price of milk rose by 90%, while the cost of imported foreign goods such as cellphones and electronics soared.
Iranians who can exchange their interest for foreign currency have bought precious metals such as gold or invested in real estate. These property purchases have fueled an increase in household value and priced people out of the market.
“In the past, buying a home was a dream for the people,” said Salimi, a 48-year-old man who did not want to give his first name to freely associate with Associated Press journalists in the Grand Bazaar of Tehran. do not speak. “But … renting a house has unfortunately also become a dream because of the inefficiency of the officials, especially the president, who gave empty promises and misled the people.”
Salimi added: “Why is this? Are land, housing materials and workers under sanctions?”
The Tehran Stock Exchange has become another haven sought by investors, raising its value to 2 million points in August 2020 when the government encouraged the public to buy. But values have dropped by almost half and are now around 1.1 million points, as some investors are stuck with stocks they cannot sell.
“The biggest challenge for the next president is to restore confidence in the stock market,” said Mahdi Samavati, a leading economic analyst who runs his own investment firm. “It is very difficult to restore confidence in the market. People have been seeing their money melt away for nine to ten months. The longer the accident lasts, the longer it will take to put things right and restore confidence.”
It is not immediately clear how the next Iranian president will handle the economy, especially if runners take over and if Tehran does not reach an agreement on the return to the nuclear deal, which limits the nuclear program and restores sanctions easing. President Joe Biden says he is ready to return to the US, but public negotiations in Vienna have not yet progressed.
Iranian leaders have relied on populist programs in the past, such as cash distributions and subsidized housing. Without the hard oil sales, Iran is likely to have to push for more rials to fund the programs, which in turn will lower the value of the rial. This will fuel Iran’s high inflation, making goods even more expensive.
“If the [next] “If the government pushes money to keep its promises, we will undoubtedly have an unleashed growth in inflation,” Samavati said.
Former central bank governor Abdolnasser Hemmati warned during Iran’s first televised presidential debate that he, as an economist, saw no way to finance the “colorful and fascinating promises” of his opponents.
“These friends are not talking about spreading wealth, but about spreading poverty,” he said.
Hemmati, who is considered the only replacement for the outgoing Rouhani during the election, has disappeared from large parts of the field critically. The exception was the harsh justice chief, Ebrahim Raisi, the alleged forerunner, who wanted to appear above the fight.
“Different classes of people started shouting about inefficiency, cruelty, poverty, discrimination and corruption.” Raisi said.
Former Revolutionary Guards commander Mohsen Rezaei described Iran’s dire economy by repeatedly referring to the desperate poor who “eat out of trash cans.” But none of the candidates except Hemmati had any specific thoughts on economic policy other than to promise more help to the poor.
Salimi, the man in the bazaar, said he would continue to vote for runners and support the Theocracy of Iran, regardless of the challenges ahead. He blamed Rouhani for the misery of the country and said he would vote for Raisi.
“I have no worries for my children … They are the children of the revolution,” he said. “They will not bow to problems.”
Molaei, the trader in commodities, said he hopes to send his children abroad for a better life like many other Iranians have.
“We are wasted. When I opened my eyes [after birth] there was the revolution, and then came the [Iran-Iraq]war and murder and bloodshed, “he said. I have been working ever since. ”