December 19,2013
WASHINGTON —While Iran’s nuclear program, presidential elections and new talks with the West got most of the attention this past year, the issue that hits closest to home for most Iranians is the economy, which has been battered by international sanctions. Many analysts say it was the growing anger over rising inflation and high unemployment that paved the way for Iran’s new diplomatic opening to the West and the world.
Back in March 2013, Iranian consumers were furious over nut prices that had jumped ten-fold.
"It is the first time in thirty years that we haven’t put nuts and pistachios on our Haft-Seen," said Tehran resident Hamid Pourmand.
"I can say we boycotted it or simply didn’t buy to protest the growing hike in nuts prices."
It was the latest in a series of economic blows to a nation that has seen inflation rise 40 percent over the previous year, with unemployment hitting more than 12 percent. For young people, the jobless rate was almost twice as high.
As the June presidential election approached, Iranians didn’t forget, demanding that the country’s next president find a way to circumvent or resolve the sanctions. Many took to the streets to celebrate when reformist-backed candidate Hassan Rouhani won on promises to revive an economy strangled by round after a round of international sanctions over Iran’s nuclear program.
As Iran’s new leadership prepared for talks in October in Geneva with Western powers on its nuclear program, sinking oil exports caused by the sanctions were costing Tehran an estimated $100 million a day. By late November, a breakthrough was made during talks in Geneva, in which a tentative deal between Iran and world powers over the country’s nuclear activities promised up to $7 billion in sanctions relief.
For normal Iranian like Tehran jewerly shop owner Ebrahimi, the deal gave rise to a newfound optimism.
"Thank God the deal that was made between them was to the benefit of the Iranian people," he said. "All Iranians dreamed of this. They are very happy."
But some Iranians remained skeptical. One Tehran resident who spoke with VOA Persian’s Straight Talk via Skype, who went by the name Mana, expressed only guarded optimism.
"I hope people’s daily lives get better, especially people around us and workers who have bad conditions in factories," he said. "Sanctions shut down many factories in Iran. I work with several factories and we see they laid off many workers."
According to Matthew Levitt, a scholar with the Washington Institute for Near East Policy, there is good reason for caution.
"This will get Iran over the next six months, perhaps. But just as likely it’s going to create a crisis of rising expectations among Iranians who expect that a deal means huge relief and the removal of sanctions."
As the U.S. Treasury Department’s David Cohen warns, unless Iran finalizes a deal, the economic pain will continue.
"Foreign banks and businesses still face a choice," Cohen said. "They can do business with Iran or they can do business with the U.S. — just not both."
Which means the fate of the Iranian economy likely hinges on how the Geneva accord plays out.