Iran’s failed economy will lead to major protests in Iran

Out-of-control inflation, financial problems, a new surge in Coronavirus cases and deaths, and a slew of other social and economic shortfalls have accumulated in Iran, paving the way for major protests. And the sparks of widespread protests and social unrest have ignited across Iran.

In the spring of 2018, before the U.S. withdrawal from the Iran nuclear deal, the Iranian regime interfered with the exchange market and pocketed a huge profit to make up for its budget deficit by selling the dollar at 20,000 tomans in the black market.

Since then, the toman has been fluctuating, and in recent weeks, the dollar was trading at around 26,000 tomans.

Although the majority of the population in Iran may not be dealing with the exchange market directly, just as gas price hikes result in general price hikes, rising currency prices directly affect the price of basic goods and the livelihood of ordinary Iranians.

One of the factors that have played a role in staggering food prices is the removal of the standard 4,200 tomans to the dollar benchmark for importing food-related commodities.

Qassem Nodeh Farahani, the Chainman of the Tehran Chamber of Guilds, announced the removal of the benchmark in May.

“From now on, importers will not be able to take advantage of (the 4,200 toman benchmark). This will lead to an increase in the price of food in the market.”

The new exchange benchmark for the import of food items and medication was set at 16,000 tomans to the dollar, almost four times higher than the previous benchmark. This sudden increase dealt a devastating blow to people’s livelihood conditions.

A look at the staggering prices of goods confirms the fact that the Iranian regime has neither the power nor the intention to control and regulate prices.

In late June, the Ministry of Housing, Roads and Urban Development announced that real estate prices in Iran’s capital Tehran had risen by 23% in the past month.

With the coronavirus outbreak in Iran, many workers, employees, and vendors lost their jobs or businesses. Many of those who still have jobs cannot afford their basic needs due to price hikes.

Iran’s Ministry of Cooperatives, Labor, and Social Welfare recently announced that “more than 800,000 people have registered for unemployment”.

The Ministry said that at least 30 percent of businesses had laid off at least one employee in the past two months.”

Many Iranians live under the line of poverty which is currently around 9 million Tomans. This puts workers, teachers, pensioners, and most government employees under the line of poverty.

Vahid Shaghaghi-Shahri, an economist and a member of Kharazmi University’s faculty, said in early July that “Iran’s economy experienced a 27% inflation in 2018 and a 38% inflation in 2019.”

“This year, although the Central Bank has a 22% target inflation rate, there are indications that we will be facing a 40% inflation rate. In other words, we had a 100% cumulative inflation for a total of three years.”

“Housing rates have quadrupled since 2018, car prices have quadrupled, and rents have almost quadrupled,” the economist added.

The Chairman of Iran’s Chamber of Commerce said on July 21 that considering the 5.2-fold increase in the US dollar to the toman, Iran would “likely face hyperinflation”.

Iran’s crumbling economy and the regime’s mismanagement have angered Iranians, who can barely make ends meet.

Iranian officials and Iranian media alike agree that this will mean angry riots in the near future.

In mid-July, a large number of protesters in the southwestern city of Behbahan chanted against the regime. Despite the regime’s vigilance to prevent protests, the gathering was called on from before against death sentences issued for protesters, the grave state of the economy, and the China-Iran deal which Iranians call “traitorous”.

Source » iran news wire

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