Ordinary Iranians paying a heavy price for sanctions

(TEHERAN) Marjan Hamidi turned away from the butcher's shop in a crowded area of Teheran's sprawling bazaar. Her quest to buy reasonably priced groceries was not going well.

Official inflation rate is 21% but some say it is actually 50%.

'Everything's become so expensive in the past few weeks,' she said with disappointment. 'But my husband's income stays the same. How am I going to live like this?'

 

Tightening international sanctions against Iran over its disputed nuclear programme, combined with rampant inflation, have drastically restricted the ability of working-class Iranians to feed themselves and their families.

 

Uncertainty and financial hardship form the backdrop to a parliamentary election on March 2. The official inflation rate stands at 21 per cent but critics of President Mahmoud Ahmadinejad and his handling of the economy say such figures are falsified and real inflation is around 50 per cent.

 

'My purchasing power declines almost every day and the prices of basic foods are soaring overnight,' said the 52-year-old. 'My bank savings are shrinking. I can't afford the unbearable cost of living by only relying on my husband's pension,' Hamidi said, as she pointed out the price of meat. At US$25 per kilo, it is increasingly beyond the reach of many Iranians. Three months ago it was US$10 cheaper.

 

Maryam Bakhshian had come to the bazaar to buy fabric. Like most, her thoughts were occupied with the soaring prices. 'It is ironic,' she said with a smile. 'While I can hardly meet my daily needs, some people are stockpiling goods, fearing a possible shortage in the future.' Last month many in Teheran flocked to supermarkets and grocery stores, emptying shelves in anticipation of bad news. The rush was sparked by mounting speculation that Israel and the US would launch military strikes against Iran's atomic sites.

 

Across the city, 60-year-old Mojtaba, a retired government employee, was stocking up at an upscale supermarket.

 

'Forget perishable items like meat. If anything were to happen to the electricity, you'd be forced to throw everything out,' he said, discussing his contingency plans for shortages.

 

'It's better to buy rice, canned foods, macaroni, pasta and cooking oil,' he said, adding that to date he had bought 400 kg of rice, boxes of tinned food and other essentials.

 

While sanctions against Iran are not new, the most recent rounds have targeted the Islamic Republic's oil industry and financial institutions in the latest attempts to force its leadership to abandon what the West believes is a nuclear weapons programme. Teheran maintains its nuclear activities are peaceful.

 

The government says sanctions are having little effect but the plummeting value of the Iranian currency, the rial, is traumatising Iranians. Despite measures by Iran's central bank to prop it up, the rial has lost half its value against the US dollar since December.

Iranians are desperate to find safe havens for their savings and have been clamouring to buy hard currencies or gold.

 

While many blame the sanctions for causing the spiral in prices, there is also much anger against the government for implementing economic reforms that withdrew subsidies on fuel and basic foods at the end of 2010.