Gloomy observations from Iran
One of the criticisms of Iran analysts often thrown around social media is that they haven’t lived in the country, visited it for a long time or speak the language.
While not as well-known as some other analysts, this author speaks the language, lived in Iran for 28 years, until two years ago, and recently visited the country for 40 days -- fortunately without any problems entering or leaving.
The purpose of this article is to share what I saw and heard, with one disclaimer: These are my personal observations and when I refer to “Iranians,” I mean the people I talked and interacted with, not the entire population of 80 million.
Since the United States quit the Iran nuclear deal last year, there have been constant fluctuations in the value of the Iranian rial versus the US dollar and a sharp increase in prices. There have been many figures thrown around regarding point-to-point or yearly inflation but they are not always the reality that people face on the streets.
Pretty much everything in Iran has doubled or tripled in price since two years ago but salaries have risen 20%-25%. Consumption is way down and many people are only buying the necessities. Closed shops are a frequent sight on streets and in shopping malls.
Essentially, what has happened is that the country’s middle class is becoming poorer and poorer and those who were below the poverty line are sinking lower. The revolutionary slogan, “enqelab mustazafin” -- the revolution of the downtrodden and poor -- has turned out to mean that everyone should become poor and not rise to the middle class.
With the economic crash, the morale of the Iranian people has sunk as well. Because of rising prices and a weak rial, Iranians who did not convert their money into gold or US dollars have lost their life savings and are left with few options.
A friend who had saved around 50 million tomans -- at that time about $12,500 but now worth only $4,200 -- to buy a Peugeot 207 with an automatic transmission was 5 million tomans short in August 2018. That same person is now 55 million tomans short to buy the same automobile because the price of cars jumped while the value of the currency has sunk. Two years ago, 13 million tomans would buy a second-hand car; now that’s the price of an iPhone.
Security has been another victim of the economic crisis. Official statistics are hard to come by and aren’t always accurate but there appear to be many more thefts and burglaries than in the past. It has become so bad that friends recommended that I not flaunt my cell phone in public, carry gold or wear rings because the chance of getting robbed is pretty high. This sense of insecurity is another factor causing people’s low morale and sense of hopelessness.
Unfortunately, the government hasn’t been doing much to improve the situation. As someone who tried to gather votes for Iranian President Hassan Rohani, I, as well as many of his other supporters, are very disappointed at his performance.
Essentially, Rohani has been acting like an opposition leader making promises in lectures and talks as though he hadn’t been elected president twice and is still a candidate for that office. His staff hasn’t been doing very well on the public relations front, either, with Mohammad Bagher Nobakht, a top adviser to the president, grating on Iranians’ nerves by just talking on national television.
Many of the people I talked to blame Rohani for the currency crash, believing it was done to improve government finances after he was forced to bail out the Samen al-Hojaj financial institution, one of many such outfits that are essentially Ponzi schemes.
Rohani and his minister of Industry have also shown themselves incapable of dealing with rising car prices, Manufacturers, profiting from protectionist rules, have been regularly increasing prices, irrespective of the value of the rial, and selling products on the black market.
Concerns are rising that Iranians are so unhappy with Rohani’s performance that they will not turn out to vote in parliamentary and presidential elections in 2020 and 2021, respectively. If that happens, it will be easier for more hard-line candidates to win, such as happened it the 2005 presidential election that led to the presidency of Mahmoud Ahmadinejad.
The situation inside Iran is very tense and dangerous. Embezzlement, fraud, corruption, government mismanagement, economic pressures and ham-handed attempts at censorship by religious authorities are building popular pressure and resentment in a way I have not seen before.
If nothing changes, I am frightened for the future of my country. Admittedly, I gave similar warnings around a year ago during an outburst of popular protests but the situation has only worsened.
I hope this time the system realises the depth of the crisis and reforms the way Iran is run to give people more freedom, fight corruption and improve management.
This piece originally appeared on the Atlantic Council’s IranSource blog.