Iran sanctions

The regime in Tehran has had to admit that the sanctions are painful. President Mahmoud Ahmadinejad called the measures "the most severe and strictest sanctions ever imposed on a country."

Ahmadinejad added that the sanctions gave the country an "opportunity to eliminate the country's current reliance on oil revenue." The regime has called on the population to be patient. Vice president Reza Rahimi appealed to the Iranian people to support the government in fighting the impact of the sanctions.

The costs for basic foods such as bread, milk and meat have increased sharply since the beginning of the year. At the same time, the Iranian currency is losing value. One US dollar is currently trading at some 20,000 Rial on the black market. Just one-and-a-half years ago, it was half that figure.

"The Iranians are well aware that the high prices are tied to the sanctions," a retiree from the province Khuzestan told DW. "We have to do without expensive food and cook fish or legumes, which are cheaper, instead of meat." Another Iranian woman even sees a direct connection between international diplomacy and the increase in costs in Iran.

"Following the inconclusive nuclear talks between the 5-plus-1 group of countries and Iran, the people immediately see the impact in the price hikes, which sometimes increase further with each hour that passes," she said. The 5-plus-1 group is made up of the five permanent members of the United Nations Security Council plus Germany.

Insufficient support

The owner of a foundry in Tehran, who had to shut down his business because of the economic crisis, refuses to blame the West and views the situation realistically.

"If our income does not match our expenditures, then of course we have to go without many things we are used to having," he said. "In order to save, a lot of Iranians don't go shopping as much as they used to. Some normal products have become luxury goods. Many restaurants, which used to be full all the time, hardly have customers anymore."

The Iranian government has established a nationwide basic income scheme to help its citizens cover their food costs. But the Paris-based economist and analyst Fereydoun Khavand said this cash subsidy was not sufficient for members of the middle class.

"For these people, the exchange value is relevant," Khavand said. "The Iranian currency has lost almost half of its value since the beginning of the year. That means that the citizen's income it receives from the government has also in comparison lost half of its value since the beginning of the year."

The population is suffering under the inflation and the cash subsidy is not sufficient. So how do Iranians deal with the high prices? A teacher from Tehran told DW that she hardly buys shoes and clothing anymore.

"I don't buy things as often as I used to so that enough money is left over for my children," said the mother of two. "They have to eat healthily. I don't want to do without that."

Reducing needs

Khavand said the Iranians have developed a strategy for survival.

"Most people have to take on several jobs," he said. "The black market and bartering are becoming more important. As a whole, they have to reduce their quality of life and their needs in order to get by." Some Iranians are considering gaining additional income by hoarding government-subsidized goods in order to sell them at a later date on the free market for hard currency.

Another option for those who have some money left over is to invest the funds in private banks, which pay higher interest rates than government institutions. In the meantime, pressure is growing on the economically weaker majority in the population.

Author: Kaveh Bahrami / sac
Editor: Rob Mudge