Iranian official says basic foods exported while Iranians tolerate scarcity

The Director General of Iran’s Office of Commerce affiliated with the Ministry of Industry, Mine and Trade said yesterday that some food items are exported out of the country, despite scarcity inside Iran. Sadif Beikzadeh said despite an export ban on basic food items such as cooking oil and poultry, some items do leave the borders.

“In the free market, the exchange rate is five times the government exchange rate (4,200 tomans) which is allocated to these basic foods. This means that the domestic price of these items is around one fifth of the price outside the border and under these conditions, the tendency to smuggle these items increases,” Sadif Bikzadeh said in an interview with the state-run ILNA News Agency.

The Iranian official also implied that a change in prices relies on the “extent and demands of the smuggling” of the food items.

The government exchange rate in Iran is 4,200 tomans to the US dollar, while the free exchange rate is 24,680 tomans.

In January, Amir Hossein Ghazizadeh, an Iranian MP, said that the difference between the government exchange rate and the free exchange rate is “the main factor behind economic corruption and abuse”.

This is while Iranians waiting in long lines for government subsidized poultry, cooking oil and bread have increased in several cities across Iran in the past months.

Poverty and decrease in food demand

On March 13, the Secretary of Tehran’s Food Wholesaler’s Union told the state-run ILNA that the purchasing power of Iranians had decreased since their wages have not been raised in accordance with inflation.

“It does not feel like Nowruz in the bazaar. The demand for food items has decreased sharply. There is 35% less demand than last year. This is due to the decrease of the purchasing power of Iranians,” Ghasemali Hassani said in the interview.

An Iranian economist, Sohrab Bakhtiyar, wrote in a state-run website yesterday that last year, 40% of Iranians lived under the poverty line, while this year, nearly 70% are living under the poverty line, and 80% are in the “deprived” classes. He said this meant that from every five persons, only one was living above the poverty line.

In September 2020, another Iranian economist, Ibrahim Razaghi said there were 30 million unemployed people and 60 million Iranians living below the poverty line. He said the reason behind the sharp increase in prices was the “government’s lack of supervision over the economy” and that the regime had “practically abandoned the economy”.

In the last three years, Iran has experienced economic growth of negative 5% and inflation above 30%, which is the highest and longest inflationary recession in the economic history of Iran.

A report published by the Statistical Center of Iran in November 2020 said Iranians were not able to buy basic groceries. Average Iranians eat 52% less red meat, while those with lower incomes eat 65% less red meat compared to last year. Iranians are also eating 34% less rice, the country’s staple food.

Lack of economic stability, dual exchange rate, inflation and recession, lack of a clear picture of the current state of the economy have led to public discontent. Most Iranians no longer trust regime leaders and hold daily protests to express their economic grievances.

Source » irannewswire

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