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Masih Alinejad

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The Economic Crisis in Iran

Posted: 02/ 7/2012 2:52 pm

During the 10 years that the U.S. Army positioned itself next door to Iran, in neighboring Iraq, and Afghanistan, the people of Iran never seriously feared an attack. Despite President Bush's at times heated war rhetoric, the Iranians shrugged off fears of missile strikes or bunker-busting bombs. These days however, with the U.S. military evacuating Iraq amid plans for a withdrawal from Afghanistan, there is palpable fear of a possible attack. In the past three weeks or so, Iran has been been griped by a panic, which saw the Iranian currency, the rial, fall more than 50 percent against the dollar on the black market.

The governor of Iran's central bank, Mahmoud Bahmani, announced eight percent devaluation of the rial, from 11,300 to 12,260 to the dollar. Until 2010, the rial had been kept at a relatively stable 9,000 to the U.S. dollar for years. On the black market, where those without connection have to obtain Greenbacks, the rate had shot up to USD 23,000 last week. The collapse of the rial, and the additional economic sanctions placed on Iran by the international community has created such a frenzy among Iranians that out of fear of a famine, they have jammed supermarkets in order to stock pile the bare necessities.

The frenzy was such that the government had to step in to reassure the population. Hedayat Khatami, Executive Director of the Import and Export Regulations Department of the Iranian Trade Development Organization, told the Iranian news agency PANA that there was no need to panic. According to Khatami, there are no reports indicating the onset of a specific shortage, and so the people should not hoard basic foodstuff.

The reassurances have fallen on deaf ears. The Iranian people, reading the proverbial tea leaves, are anticipating a return to wartime conditions which prevailed in the 1980s during the eight-year war with Iraq.

The Islamic Republic's government-controlled media outlets publish and broadcast news reports favorable to the regime. The Iranians, for example, have had no or little information regarding the economic crisis and currency fluctuations. The Iranian government has gone so far as specifically prohibiting media outlets from publishing any news articles or broadcasting any information regarding the fiscal disaster. The secretariat of the National Security Assembly and the Office of the President say reporting on the current state of the country's economy is nothing more than mud-slinging and 'undermining national security.'

There are ways around the heavy hand of the censors. Some journalists are posting photos and publishing items on Facebook. Some of these photos clearly show the throngs of people at supermarkets and shops, hoarding items and wholesale buying essential goods. Reports in various independent Iranian media also confirm that shoppers are crowding stores throughout Iran to purchase items such as rice, oil, grains and cereals, detergents and soaps, cans of various kinds of food and water.

Maryam Shabani, a reporter who remains in Iran writes in her Facebook wall: "I am witness to a people who are preparing themselves for famine."

Political activist, Saeid Shariati who was arrested during the 2009 post-election protests, has just been released from prison. On his Facebook page, he argues that writing about the Iranians frenzied rush to shop cannot be construed as undermining national security.

A site entitled 'The Tehranis' has reported of the empty shelves in food stores: "People in the Sar-Cheshmeh area of Tehran bought everything there was to buy in stores and now Sar-Cheshmeh is as dead as a graveyard, devoid of all items and products."

Jahanbakhsh Amini, a member of the Islamic Parliament, is highly critical of the Ahmadinejad administration, and directly blames him for the crisis. "The administration itself is driving up the price of the currency and gold,'' Amini charges. "That is so that individuals who have bought gold and foreign currency end up going bankrupt."

Amini claims that Ahmadinejad who sees himself as above being answerable to the Parliament and he has driven the nation to a precipice.

One of Ahmadinejad's election slogans was to deliver the income from the sale of Iran's oil to the table of each Iranian. These days however, the economic situation is so dire that Ahmadinejad's own supporters and confidants have joined the ranks of his critics. Among those fervent supporters, Mohammad Khosh-Chehreh, a university professor who headed up the economic commission of the Islamic Parliament, now talks of a possible impeachment of Ahmadinejad.

On the other hand, the Supreme Leader, Ayatollah Khamenei, has stood by Ahmadinejad during the 2009 elections, announcing that his thinking was closer to Ahmadinejad than it was to any of the other candidates. It remains to be seen if any blame also attaches itself to Khamenei.

Ahmadinejad remains his bombastic self. Despite all the evidence to the contrary, Ahmadinejad said in a recent interview: "The country does not in any ways face economic problems." His Minister of Intelligence, Heydar Moslehi, made a more ominous announcement; His office had identified those 'operating behind the scenes' who were responsible for price gouging and currency speculation.

If the past is any indication, the U.S. will be blamed.

 
 
 
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02:31 PM on 02/08/2012
"Under a tightening grip of sanctions, the country of 74 million people is finding it increasingly difficult to repatriate the hard currency from its crude oil exports, its major foreign currency earner, that it needs to pay for shipments of food and other imports."

"The rice defaults could be the latest sign that those sanctions are biting as Iranian importers find it increasingly difficult to settle payments."

"The United States slapped fresh sanctions on Tehran from the start of this year, targeting financial institutions that deal with the central bank, hoping to stem oil revenues"

And I suppose these problems are supposed to make American happy!!

There is no mention of the fact that prior to the implementation of these life threatening sanctions, the Iranians were very good customers with a reputation of paying their bills as and when due. Which means if they were left alone there people wouldn't have to fear war and suffer from food shortages.
AllegroTroppo
Appeaser feeds crocodile hopes to be eaten last
02:47 AM on 02/09/2012
Iranians have a choice- depose the Supreme Leader oust the religious and military leader which lead down the path of suffering and destruction and then re-join your rightful place in the world community. Soviet people did it, so can you.
04:21 AM on 02/11/2012
Anyone who has gone to Iran will tell you that they have avery peaceful and contented society. If it's wasn't for these malicious un-necessary sanctions life in Iran would be even better. Why can't the Americans just leave them alone. That's all they've been asking since 1979. If you take time to read the hostage agreement you will see that the very first clause in the agreement states clearly that the US will never interfere, either directly or indirectly in the internal affairs of Iran. Recent events show clearly that the US is incapable of keeping to any international agreement that doesn't suit their fancy.
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anton123
01:09 PM on 02/08/2012
Very good article that shows how dare the situation is for regular Iranians. And in the same time shows ignorance of Iranian "leadership".
12:30 PM on 02/08/2012
I am not defending the regime in Iran, its true that mismanagement of the economy and illogical system of the Islamic republic denies creativity,freedom of thought along with most basic rights of individuals in the 21st century has provoked the brain draine among many other things, how ever its also true that the USA and its master(Israel) together with the western european powers does not wish to see a strong and independent Iran, since that would mean the end of their hegemony at least in that area.so during the last 30+ years they have done nothing but bullying Iran in every single field.
What would USA do if on all its borders hostile military buildup existed for the last 10 years??
or for that matter the western european powers ?
Lets not mention Israel, they already have plenty of atom bombs....
AllegroTroppo
Appeaser feeds crocodile hopes to be eaten last
02:44 AM on 02/09/2012
"I am not defending the regime in Iran..." followed by a lengthy defense of the Iranian regime with a few ancient Judeophobic canards thrown in.
Precious.
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becky bradshaw
"In a time of universal deceit, telling the truth
08:29 AM on 02/08/2012
Earlier this week, Iran defaulted on payments for about 200,000 ton of rice from India, worth about $144 million. Iran has exceeded the maximum 90 day window for payment. Vijay Setia, the head of the All India Rice Exporters' Association, is asking members to halt rice exports to Iran.

Iran relies on imports for about 45% of its annual rice consumption of 2.9 million ton. Five deliveries of grain to Iran have been diverted to new destinations because of payment problems. This was discovered by ship tracking data. Other ships are sitting offshore from Iran because of difficulty with payments.

http://www.chicagotribune.com/news/sns-rt-us-india-ricetre8160cx-20120206,0,1134788.story
02:55 PM on 02/08/2012
Meanwhile the Iranians are sending scarce resources to Syria to bolster the Assad regime. hey, maybe they can do like the Americans and borrow from China and pay for the rice that way.
02:03 AM on 02/08/2012
Good article. One thing seems clear, the true power is with Khamenei.
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Richard Pearce banned
Never let them tell you it can't be done.
08:08 PM on 02/07/2012
Once stripped of the usual anti-governmental and anti-presidential spin (the sort of thing that Republicans put on all news when Democrats are in power) it sounds an awful lot like the Iranian public sees another imposed war (that is, a war forced on them for their crime of independence from the US) in the near future.

They obviously understand that even if the US hasn't finally gone too far in its attempts to crush Iran for the Iranian government merely voice protests about, it will keep going further as fast as it can until it does cross that line, and also understand that the moment Iran does respond with something more than words, the US government and media will portray that as an unprovoked attack, like the European government that set out to rule the world last century, and rally its population to what it will term a war of self-defence (though all but those aligned to it will see it as what it is, a war of aggression)
02:53 PM on 02/08/2012
You might tell your Iranian bosses that they could save money by not diverting many resources to Syria where they are supporting Assad.
07:09 PM on 02/07/2012
Good analysis Ms. Alinejad. I agree with you that economical situation in Iran is worsening and at the end the regime will blame the U.S. and other western countries for the economical difficulties. There is no doubt that the international sanctions on Iran have weakened the Iranian economy but the mismanagement by this administration has made it worsen.
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Susan Shaffer
tell me from the beginning
06:45 PM on 02/07/2012
"If the past is any indication, the U.S. will be blamed."
10:08 AM on 02/08/2012
I wonder why?
Reminds me of one time when we were in a line at school and the guy behind me kept poking at me with is pencil, I took it for a while. but after so much I turned around and decked him, I got the strap and he got commended for not striking back. I waited for about two weeks so no one could relate my actions to that first incident and I poked at him until he tried to retaliate and gave me an opportunity to beat the snot out of him. I wonder what Iran will do when the time comes?
02:56 PM on 02/08/2012
Don't forget the Usurping Entity (which, of course, controls everything).