Faced with an economic crisis, Iranians find little New Year’s cheer

DUBAI, United Arab Emirates — Iran’s bazaars are packed ahead of next week’s Persian New Year, but there is little festive cheer as shoppers examine soaring prices of meat and festive delicacies to see if they can afford them. Others are there to sell goods on the sidewalks for a living.

Paralyzing Western sanctions, in addition to decades of poor economic management, plunged the country into a serious crisis. Iran’s currency, the rial, has recently fallen to record lows, essentially wiping out people’s life savings and making some basic goods unaffordable.

Months of anti-government protests have failed to dislodge ruling clerics and sparked a crackdown that has further dented hopes of returning to the 2015 nuclear deal with world powers that lifted sanctions in exchange for curbs on Iran’s nuclear program.

Saying goodbye to a trying year, Iranians hardly expect the next one to be better.

“People are on the streets, shopping, but no one is happy in their hearts,” said Azar, a 58-year-old housewife. “I have nothing to do (with politics), but I can totally relate to that feeling. I understand this when I look at the faces of our children and young people.”

He and other Iranians only gave their first names out of fear of reprisals.

Reza worked as a day laborer, but had to stop due to an injury. Now the 33-year-old sells clothes on the sidewalk. “I got into sales out of frustration,” he said. “I work outdoors in hot and cold weather because I have to.”

“The market is not good at all this year,” he said. – We hoped that the last days of the year would be better.

The rial fell to an all-time low of $600,000 last month, having been reduced to $32,000 when the nuclear deal was signed.

Then-President Donald Trump pulled the United States out of the deal in 2018 and reinstated heavy sanctions, including on Iran’s vital oil industry. In response, Iran has openly exceeded the deal’s limits on uranium enrichment and is now closer than ever to producing nuclear weapons if it chooses.

His decision to supply armed drones to Russia’s war on Ukraine and his crackdown on Iranian protests sparked by the death of a young woman in moral police custody in September further alienated him from the West. Negotiations to restore the 2015 agreement reached an impasse last summer.

The strange wave of suspected poisonings in girls’ schools across the country added to the sense of crisis. Almost four months after the first incidents were reported, it remains unclear who may be behind them, or even what, if any, chemical was used. Iranian officials suggest that at least some of the reported incidents are the result of mass hysteria.

A Chinese-brokered deal last week to restore diplomatic ties with regional rival Saudi Arabia raised hopes of a broader rapprochement with wealthy Gulf Arab states that have long viewed Iran with suspicion. However, the deal is unlikely to provide immediate relief to Iran’s economic woes.

Iranian officials admit inflation is between 40% and 50%, but some economists believe the real rate is even higher. That makes nuts, sweets and other staples for the New Year holiday known as Nowruz unaffordable for the growing ranks of low-income Iranians.

Iranian authorities blamed the crisis on the war in Ukraine, global inflation and a “currency war” by the country’s enemies.

But Iran’s financial crisis began long before Russia invaded Ukraine, and it’s not just the sanctions that are dragging down the economy.

Iran’s state-controlled government and paramilitary Revolutionary Guard have long played an outsized role in the economy, crowding out the private sector and stifling growth. The country is heavily dependent on oil exports, which have been decimated by sanctions.

“The price of everything has gone up many times over, even products that have nothing to do with the dollar,” said Azar, the housewife. “Many people cannot afford this, they are in trouble.”

Mahnaz, a retired civil servant, said the decline in the local currency had reduced the pensions he and others were counting on.

“Are people gathering and celebrating? Everyone has to stay at home, they have nothing to spend and they can’t go anywhere. We traveled in the past, but now we can’t. Because we don’t have money,” he said.

“What can you do with $73 a month?” asked. “What can I do? Can I buy more chicken and meat?”