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Sunday
Mar112012

Iran 1st-Hand: "People Here Are Boiling, But Don't Make A Sound" (Spindle)

Photo: ReutersAllowed into Iran to cover the Parliamentary election on 2 March, Bill Spindle of The Wall Street Journal seized the opportunity to highlight an arguably more important story --- the impact of the economic situation on those in Tehran:

Western powers and Iran's leaders have presented mirror images of the country's plight over the past month. In the vast middle ground between these poles are millions of Iranians, many of whom profess little use for either stand.

For the West, which has loaded up new sanctions touted to be the toughest yet, Iran's economy has started to buckle. It will only grow worse, the U.S. and others argue, until something gives, perhaps the regime itself. To Iran's leaders, who used a parliamentary election last week to rally their considerable political base, the new sanctions are another chance to thumb their noses at the West. Their defiant message: Sanctions may hurt, but that only makes us stronger.

A week in Tehran, where 12 million of Iran's 75 million people live, offered a rare view from ordinary Iranians. From the hilly upscale environs of the city's north to the gritty working-class districts in the south, Iranian lives are lived between these two stark caricatures.

Faced with a dispiriting economy, they are finding ways to get along, usually with difficulty. Some thrive. But few boast about their resilience. Fewer still see themselves taking to the streets, even if things get much worse.

"We have to keep going," says one merchant in a neighborhood shopping district. "People here are boiling, but don't make a sound."

Iran's economy has hit a rough patch, even by its own fitful performance standards. The most acute problem now is relentlessly rising prices—brought on in part by tightening sanctions, but also decades of economic mismanagement by Iran's own government.

The inflation rate, officially pegged at 20% annually, is probably more like 50%, according to Farhad Khorrami, an economist at Allameh-Tabatie University in Tehran. The most recent spur to prices has been a sharp fall in Iran's currency, triggered largely by fears about the newest round of sanctions announced by the U.S. and Europe.

The result for working-class Iranians like 40-year-old Reza, married with two daughters, has been struggle.

The weaker currency has pushed up the price of the many imported goods that Iranians have grown fond of (bootlegged iPhones) and dependent on (gasoline).

Reza used to scrape by as an unlicensed taxi driver. But fuel prices rose when the government reduced its subsidy on gasoline last year. His customers switched to public transportation or walked.

So Reza rented a small storefront on a pedestrian mall along the route to a popular shrine in Tehran's working-class southern fringe. He hawks T-shirts, souvenirs, incense and, with the Iranian New Year approaching, fireworks. He says business conditions are "rubbish." He sells little.

Chicken and beef have almost doubled in price in the past few weeks, he says. His family has all but stopped eating those. His wife buys chicken livers. They're cheaper.

He has tried raising prices in his own store. Playing cards just went to 1,500 rials from 1,000—or to about seven cents, from five cents. Sales fell. "People just don't have the money," he says.

A world away from the pious, poor districts of the city's south, the affluent neighborhoods of northern Tehran seem to be burgeoning.

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