Tehran’s municipal markets were notorious for their long queues as shoppers lined up to buy meat, vegetables and fruit in bulk at discounted prices. Yet today there are far fewer customers. Those buying goods carefully select just enough to meet their daily needs, as soaring prices mean low-income families are struggling to make ends meet.
“God damn this regime and its corrupt rulers,” one middle-aged Iranian woman cursed as she paid for a lettuce and a cabbage. “They have sent their children to the US and Canada while making us poorer every day.”
Such complaints have become common in Iran, highlighting the acute domestic pressures building on the leadership as the US imposes new sanctions on the Islamic republic. Measures targeting cars, gold and other metals trading, and the government’s ability to buy US dollars came into force today.
The decision in May by Donald Trump, US president, to withdraw from the 2015 nuclear accord Tehran signed with world powers exacerbated a slump in the rial, with the currency losing more than half its value against the US dollar on the unofficial market this year. The price of food such as fruit and vegetables are up to 50 per cent higher since the start of 2018, according to official figures, adding to the mounting anger many Iranians feel towards political leaders they blame for economic mismanagement and corruption.
Analysts say the disconnection between the people and the regime has never been wider since the 1979 revolution. Iran has been plagued by sporadic protests since thousands took to the streets at the turn of the year. Most of the demonstrations have been small and have erupted over a range of issues, from water shortages to joblessness. But often they have taken on an anti-regime tone. They have added to the concerns of Iranian politicians, who view the US sanctions as part of a plot to escalate public anger by squeezing the republic financially to the point where Iranians rise up against their leaders. The top commander of Iran’s Revolutionary Guard acknowledged recently that the regime was more concerned about its challenges at home than foreign military threats. Tehran could respond to the latter, said Major General Mohammad Ali Jafari, “but domestic weaknesses and threats are more serious”.
A main cause of the public anger relates to allegations of corruption within the regime and a politically connected business elite. Reformist and hardline politicians locked in an intense struggle for power have repeatedly accused each other of fraud and mismanagement.
The currency crisis has added to concerns about corruption, with allegations that some businessmen have illegally profited from the government’s currency controls after receiving euros at subsidised rates to import goods.
The judiciary said last month that it had arrested several businessmen in relation to alleged graft involving the import of cars and smartphones. In one case, it said more than 10,000 phones had been imported at low prices by a “dead person” to be sold at a higher rate on the open market.
Such claims have infuriated ordinary Iranians struggling not only with rising prices, but also with water scarcity and electricity power cuts in a hot summer.
“Corruption is so high that it has penetrated everywhere,” said Ali, 61, a former member of the Revolutionary Guard in the city of Amol.
“Why should we struggle with daily issues and risk our lives to fill the pockets of corrupt people?”
President Hassan Rouhani last month dismissed the central bank governor who was blamed for mismanaging the crisis as he sought to show his government was taking action. On Sunday, the government said it was relaxing its foreign exchange rules and would reopen currency markets.
But the economic situation is expected to deteriorate further when the US imposes sanctions on Iran’s oil exports, the government’s vital source of income, and transactions with the central bank in November.
Wealthier Iranians are already stockpiling basic commodities and have been buying up assets such as gold and cars in an effort to protect the value of their savings. But the poor do not have the means to follow suit and consider themselves the victims of an unjust system.