Iran is making headlines all around the world, as the international news media focuses on the country’s deepening political, social and economic crisis. The German newspaper Suddeutsche Zeitung’s Middle East correspondent Paul-Anton Kruger recently produced a report on Iran titled: “End of the Line.”
The report monitors the mood and concerns of merchants in Tehran’s Grand Bazaar, which has historically been a barometer for the political climate in Iran. Mr. Kruger speaks at length with Hassan Sadeghi, a jeans manufacturer and wholesaler in Tehran’s Grand Bazaar, about the current economic environment in the country. The following are excerpts from the report:
Mr. Sadeghi says: “Selling jeans is a lucrative business. However, we’ve never faced a crisis like this before. We hardly sell anything. We spend our days drinking tea and killing time. But I’m also afraid of selling my stock, because I don’t know if I can afford to replenish it.”
The Grand Bazaar is already reacting to the new wave of U.S. sanctions due to take effect in early November. Wholesale and retail businesses are not the only ones feeling the squeeze. The Iranian rial has fallen sharply against the U.S. dollar in recent months. Iran’s central bank announced in March that it would conduct all future business transactions in euros. However, that has not eased the economic pressure on Iran. The U.S. dollar is the dominant global currency, and most international transactions are conducted in dollars.
The Iranian government set a new single foreign-exchange rate in April to prevent the rial from falling any lower against the dollar and other currencies. The Central Bank’s official rate was 42,000 rials to a dollar. At the time, the bank said that the lower rate was only available to top importers. So it is no surprise that Sadeghi and other small business owners have not benefited from the government’s move to stabilize the rial.
Sadeghi says: “My two brothers are my business partners. We buy all the raw materials including fabrics, threads, buttons and other items from abroad. We have to pay our suppliers with dollars. The problem is that we cannot get the dollar at the lower official rate from the government. The dollar has continuously increased in value in the past few weeks.”
“We are not going to sell our jeans until the government stabilizes the foreign exchange rate. Contrary to the rial, jeans retain their value. We stopped selling our jeans three months ago. The currency exchanges continually adjust their rates. It is a volatile and unpredictable market,” Sadeqi notes. “Everyone knows what it means when merchants bring down shutters in the Bazaar. The merchants in the Grand Bazzar provided political and financial support to the 1979 Islamic Revolution which brought down the Shah.”
Sadeghi explains: “We’ve used our savings to pay the workers. We had enough raw material until three months ago. However, we’ll have to fire our workforce and shut down our operation if the current trend continues.” He adds: “Iran sells billions of dollars worth of oil. Where does this money go? It’s not Donald Trump and his withdrawal from the nuclear deal, but rather decades of mismanagement that have created the current crisis.”
The government has put banners up all over Tehran, urging people to buy domestic products. The Ministry of Commerce has banned the import of 1,339 products it considers to be luxury items, including sofas, houseware, leather, shoes, and machinery. These are some of the items that Sadeghi needs to operate his business.
The growing discontent with the situation and anger towards the regime is not limited to the merchant class. Workers, teachers, pensioners and even prominent artists have voiced their concerns about the current social, political and economic climate in the country. The cost of goods including domestic products continues to rise. Iranian cigarettes, for instance, have doubled in price. Life-saving medical supplies and equipment are very scarce. That’s why Sadeghi is reluctant to sell his jeans. He doesn’t know if he can afford to replace his inventory.
Many Iranians question the regime’s motive for squandering the country’s wealth on proxy wars. During the recent unrest, many protesters were chanting “Get out of Syria, take care of us instead.” People are also concerned about the regime’s regional ambitions and the Islamic Revolutionary Guards Corps’ (IRGC) support for militia groups in Iraq, Yemen, and Palestine. Protesters in Tehran were chanting “Death to the dictator,” an apparent reference to Iran’s Supreme Leader Ayatollah Ali Khamenei.
Many people in Washington hope that the unrest will ultimately lead to the downfall of the Islamic Republic. U.S. Secretary of State Mike Pompeo has denied that regime change is on the administration’s agenda. Trump, however, believes that tearing up the nuclear deal has dramatically changed the situation in Iran. He has even said: “Iran is not the same country as it was a few months ago.”
People are demoralized. There are now daily protests over unpaid salaries, water shortages, power cuts, the high cost of goods and numerous other issues. Many young Iranians we spoke to told us that they had nothing to lose.
Sadeghi says: “My wife made a big mistake by voting for President Hassan Rouhani in the last two elections. I don’t know of any politician in Iran who can solve our problems.”
The Iranian regime will mark the 40th anniversary of the Islamic Revolution in February 2019. Sadeghi knows that a lot can happen between now and then. For now, however, he pulls down the shutters and goes home to his family.
[Translated from Persian by Fardine Hamidi]