Monday, 2 July 2012

The Latest from Iran (2 July): Winners and Losers in the Economic Crisis

0530 GMT: On the day after the imposition of new economic restrictions on Iran, we begin with a snapshot from Thomas Erdbrink, the Tehran correspondent of The New York Times:

Bedeviled by government mismanagement of the economy and international sanctions over its nuclear programIran is in the grip of spiraling inflation. Just ask Ali, a fruit vendor in the capital whose business has been slow for months.

People hurried by his lavish displays of red grapes, dark blue figs and ginger last week, with few stopping to make a purchase. “Who in Iran can afford to buy a pineapple costing $15?” he asked. “Nobody.”

But Ali is not complaining, because he is making a killing in his other line of work: currency speculation. “At least the dollars I bought are making a profit for me,” he said....

Some, like Ali the fruit seller, who would not give his full name, exchange their rials for dollars and other foreign currencies as fast as they can. More sophisticated investors invest their cash in land, apartments, art, cars and other assets that will rise in value as the rial plunges.

For those on the losing end, however, every day brings more bad news. The steep price rises are turning visits by Tehran homemakers to their neighborhood supermarkets into nerve-racking experiences, with the price of bread, for example, increasing 16-fold since the withdrawal of state subsidies in 2010.

“My life feels like I’m trying to swim up a waterfall,” said Dariush Namazi, 50, the manager of a bookstore. Having saved for years to buy a small apartment, he has found the value of his savings cut in half by the inflation, and still falling. “I had moved some strokes up the waterfall, but now I fell down and am spinning in the water.”


from EA WorldView: EA Iran

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