The Economic Crisis in Iran

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