Iran battles economic pain ahead of presidential vote, World News
When the Iranians vote for a new president next week, they will do so in the depths of an economic crisis sparked by crippling sanctions and made worse by the pandemic.
After years of international isolation, the 83 million Iranians are suffering as jobs are scarce, prices rise and hopes for a better future fade for many.
“We’re not doing any plans, we’re just living day to day,” said Mahnaz, a 30-year-old saleswoman at a Tehran cosmetics store, summing up the gloomy mood.
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Supreme Leader Ayatollah Ali Khamenei acknowledged last month that “the main (problems) of the people” are youth unemployment and “the hardships … of the underprivileged”.
An ultra-conservative candidate, the head of the judiciary Ebrahim Raisi, is likely to win the June 18 elections, in another setback for moderate and reformist camps who have long hoped for greater re-engagement with the world.
“We are facing the most serious macroeconomic crisis that Iran has known since the revolution of 1979,” said Thierry Coville of the Institute of International and Strategic Relations in Paris.
Iran is plunged into a “deep social crisis” and “the collapse of the purchasing power” of a large part of the population, he said, estimating that unemployment has “exploded” to 20% of the working population.
The rial currency has collapsed and prices have skyrocketed amid inflation that the IMF is forecasting at 39% for this year.
Families are struggling to make ends meet, and on the streets of Tehran, everyone is talking about soaring prices, especially for meat, eggs and milk.
In his shop selling scarves in Tehran’s Grand Bazaar, 80-year-old Fakhreddine said things were so bad now that he was almost missing the 1980s-88s era. Iran-The war in Iraq, because at the time at least “we had worked”.
– ‘Maximum pressure’ –
The dire situation stands in stark contrast to the high expectations after the Islamic Republic struck its 2015 nuclear deal with world powers which promised the lifting of some international sanctions in exchange for limits on Tehran’s nuclear program.
There were high hopes for an influx of foreign investment after Iran pledged not to build or acquire nuclear weapons – a goal it has consistently denied pursuing.
But those hopes were dashed in 2018 when then-President Donald Trump withdrew the United States from the deal and launched or reimposed crippling sanctions as part of a broad campaign of “maximum pressure” .
Foreign companies fled, fearing US sanctions, as Iran lost billions in crucial oil revenues and was shut out of the international financial system.
Iran has been plunged into a deep recession and has seen repeated episodes of street protests, as well as backlash against moderates and reformists around President Hassan Rouhani who negotiated the deal.
The International Monetary Fund says Iran’s GDP fell more than 6% in 2018 and 2019 and only returned to modest growth last year.
When the Covid-19 pandemic struck, Iran quickly became the worst-affected country in the region. According to official figures, which are widely believed to underestimate the true toll, some three million people have been infected, of which more than 81,000 have died.
– Descent into poverty –
Iran has been worn down by a decade of intermittent sanctions, analysts say.
“Since 2011, about eight million people have descended from the middle class to the lower middle class strata, while the ranks of the poor (have) swelled by more than four million,” wrote economist Djavad Salehi- Isfahani in a recent study. published by Johns Hopkins University.
“The problem has been compounded by the arrival of the Covid pandemic in 2020. In addition to lacking the resources to help those who have lost their jobs, the government has not been able to easily reach the majority of Iranian workers who occupy informal jobs.
The crisis has also sharply reduced government investment in infrastructure, said Coville, who added that “it is no coincidence that we are starting to see blackouts in Iran,” referring to recent blackouts in Iran. ‘electricity.
The conservative Iranian camp has long criticized reformists for naively trusting the West to agree on the nuclear deal – but Rouhani on Wednesday defended the historic achievement of his eight years in power.
“It was the nuclear deal that put the country on the path to (economic) development, and today the solution to the country’s problem is for everyone to come back to the deal,” he said. -he declares.
“We don’t know of any other way.”
The seven presidential candidates, including the five ultra-conservatives who have repeatedly criticized the deal, now agree that Iran’s top priority is to have the sanctions lifted by the United States.