Advertisement
YOU ARE HERE: LAT HomeCollectionsPrices

Iranians feeling pain of higher prices

The traditionally slow period known as Black Spring is expected to be even bleaker as the government trims subsidies and shoppers stay home.

May 07, 2012|By Ramin Mostaghim and Alexandra Sandels, Los Angeles Times

TEHRAN — On a recent trip to a city on the Persian Gulf, Iranian President Mahmoud Ahmadinejad stood in the back of a pickup as it made its way through a thick crowd clamoring for his attention when an older, disheveled man began to shout at him.

"Ahmadinejad, I am hungry, Ahmadinejad, I am hungry," he pleaded desperately. The man banged on the pickup's front window to get the notice of the president, who leaned forward as the two exchanged a few words. A young woman then climbed onto the hood of the vehicle and told the leader, "I have problems."

The video of the incident in Bandar Abbas was widely circulated on social media among those who saw it as a symbol of the struggle of everyday Iranians trying to cope with soaring prices and high living costs.

There are stirrings of discontent here as the cash-strapped government trims longtime subsidies on fuel and staple goods. Recent U.S. and European Union sanctions on Iran's central bank and oil industry, in response to the country's disputed nuclear program, have aggravated the dire situation by weakening the currency, the rial.

The period following the Persian New Year is jokingly referred to as Black Spring by business owners and shopkeepers because it is characterized by slow business as Iranians pinch their pocketbooks after the lavish spending of the holiday. But this year, the Black Spring is expected to be even bleaker and to last longer than usual, probably through the end of June.

"This year the business is so doomed that we can say it is blacker than the expected black and slack spring," 40-year-old Majid said as he sat in his cramped west Tehran dry cleaning shop waiting for customers.

Majid, who like others in this report didn't want his last name used for fear of reprisals, says often he doesn't even bother showing up. He spends his days working out at the gym or drinking with friends.

Hasan Tabrizian, whose tiny shop sells imported kitchenware, passes the time by watching religious soap operas and swapping local soccer news and statistics with other idle shopkeepers. His routine is rarely interrupted by a customer walking into his shop, and those who do only browse.

"My customers in the retail market are diminishing.... People [want] to save money for basic goods," said Tabrizian, 45.

It is not only members of the public who are complaining. Some in the government and clergy have joined the chorus of grievances, sympathizing with the citizens or perhaps worried that the situation could lead to social unrest.

Ayatollah Mohammad Yazdi, a leading clergy member who heads a seminary society in the holy city of Qom, wrote a rare open letter recently to Ahmadinejad in which he complained about high prices and people becoming increasingly discouraged over the economy.

"Obviously if this continues, then the vulnerable people of our Islamic society, who are the real owners of the revolution, will face serious problems," Yazdi wrote in the letter published on an Iranian news site.

He urged Ahmadinejad to consult with economists and finance experts on how to solve the problem.

The next day the front page of the daily newspaper Shargh read, "The clergy cry out against soaring prices."

In the Islamic Republic, clergy play an influential role in politics and are able to pressure the government to take action to ease hardship on the public.

It would seem that the rial's devaluation on top of the nation's existing financial problems could have been an impetus to negotiate with Western powers to ease sanctions. But instead Iranian leaders have claimed that the sanctions have had no impact.

Iran's central bank and economists put the annual rate of inflation at between 20% and 40%, and one expert said the purchasing power of Iranians has fallen by as much as half.

For decades, the Islamic Republic spent nearly $100 billion a year on subsidizing staple goods and commodities, including flour and fuel. Economists and government officials have long warned that the policy was not sustainable, putting a strain on the national economy and hindering growth. In 2010, in an attempt to cut government spending and rejuvenate the economy, Iran launched a plan aimed at slashing the subsidies.

Since the initial reforms were introduced, food and energy costs have spiraled out of control and left millions of Iranians in financial straits. The cost of heating gas and electricity has gone up several-fold, and dairy products and vegetables have gone up 100%.

The parliament is debating whether to allow a second phase to go forward, which would cut cash handouts for 1.6 million households that are considered well off but would add a monthly stipend for low-income earners.

Meanwhile, frustration over the price increases are growing among ordinary Iranians, and some have begun to speak up in protest.

Advertisement
Los Angeles Times Articles
|
|
|