Iranians preparing for New Year in an atmosphere of economic crisis
Two weeks ahead of the Iranian New Year (1392), which will start on March 21, media in the country are reporting that for many the holiday mood is dampened by sharp increases in prices, an economic downturn, and the growing hardship faced by Iran’s workers.
Baztab, a website affiliated with the president’s critics in the conservative camp, reported on March 8 that, with Nowruz (the Iranian New Year) just around the corner, Iranians’ spirits are low. This holiday period has brought little joy and not much activity to a nation gripped by a severe economic crisis. The three last weeks of the Iranian year is usually a time of record economic and social activity in the country. Things are considerably different this year, however, and it’s clear that the economic activity of the Iranians has drastically declined.
The economic pressure, which has hit both the weaker sectors of society and the middle class, has made many fathers unhappy during the holiday season, and ashamed about not being able to provide for their family members’ holiday needs. This year, the joy that is characteristic of Iranian families on the eve of Nowruz has given place to concerns over the sharp increase in the prices of products, particularly the prices of clothing and food, two staples of holiday shopping.
Baztab discussed the payments recently transferred by the government to state employees and citizens for the holiday. The payments of 400 thousand tomans to state employees (about 325 dollars at the official exchange rate and 125 dollars at the free-market exchange rate) and 85 thousand tomans paid as “holiday allowance” to every Iranian citizen are not enough to cover the holiday expenses, which include serving food to guests during the holiday dinner, buying new clothes, and traveling, which is a custom during the Nowruz vacation. When meat costs 37,000 tomans, one kilogram of chicken costs 6,000 tomans, rice costs 6,000 tomans, and cereal and dairy have become significantly more expensive, there is nothing left from the money paid by the government to cover the other holiday expenses. Children in most families will experience a different holiday this year, the website said.
Baztab argued that, even during the Iran-Iraq War, when oil cost 8 dollars per barrel and Iran’s oil revenues amounted to just 6 billion dollars a year, half of which went towards covering the war expenses, there wasn’t as severe an economic crisis as there is now and the government was able to guarantee the minimal living conditions of its citizens. Now, after Ahmadinejad’s government has been in power for 8 years, despite record high oil and gas revenues and after only six months of tough sanctions, Iranian families are forced to welcome the new year in conditions of an unprecedented crisis.
The only sector of society that can be happy on the eve of Nowruz is the nouveau riche class—people who took advantage of the economic crisis to make profit while exploiting the market instability and their government connections. The nouveau riche can allow themselves to drive luxury cars imported from foreign countries, travel abroad during the vacation, and celebrate in their villas, while 60 million other Iranians are dealing with severe economic problems (Baztab, March 8).
The Mihan website, too, discussed the difficult economic situation facing Iranians on the eve of the New Year and the considerable difference between the holiday mood of the Iranian citizens this year compared to previous years. No one is looking forward to spring because of the sharp increase in prices, said an article posted on the website. The citizens are not feeling the excitement that is characteristic of the holiday eve, and few of them look forward to the spring as they once did due to concerns over satisfying their holiday needs.
Nowruz is usually a time of festivity and intensive shopping for the holiday, with families going from one shopping center to another and parents willingly fulfilling their children’s gift requests. Every year, many Iranians can be seen standing in line to buy dried fruit and candy and fill their shelves for the holiday. Things are different now, however, and this year’s Nowruz does not bring with it the same colors and scents as it did in previous years. The unprecedented increase in prices has many Iranians simply looking at the display windows.
The people of Iran, who had to deal with a foreign currency crisis and increasing prices this year, now have to buy one kilogram of rice for 7,000 tomans and pistachio nuts for a record price of 70,000 tomans. As 1391 is coming to an end, the citizens’ buying power is lower than ever before. A man from Tehran interviewed for the article said that people only buy the most necessary products for the holiday. He said that, even though prices were also high in the past, this year he is forced to give up on many products to avoid having to take loans. The economic situation this year makes it impossible to travel during the holiday vacation or have guests over for the holiday feast, he said. The holiday allowance paid by the government to the citizens is not enough for anything, since just the holiday dinner of an average family of four costs more than the sum which the government transferred. He noted that the government would have done better to control the prices or increase workers’ salaries to keep up with the increase in prices instead of paying holiday allowance (www.milhan.net, March 3).
In recent days a number of websites have reported on a considerable downturn in the markets ahead of the holiday, and posted pictures allegedly showing a smaller shopper turnout than usual, which is uncharacteristic for the last several weeks of the Iranian year. Vendors have reported a considerable decrease in sales compared to previous years.
Staying home due to the rising prices
The economic crisis and the increase in prices have had a significant effect on one of the most notable features of the New Year period: vacationing in Iran and abroad, a custom practiced by many Iranians. In recent weeks the media have reported an expected decrease in travel during the holiday vacation due to the sharp increase in the prices of vacation packages offered to Iranians.
The daily Ebtekar reported that Nowruz 1392 has become the most expensive Nowruz as far as travel is concerned, and that only a few families can afford to go on a vacation this year. While a worker’s minimum wage is less than 400 thousand tomans, a three-night stay at a hotel in Shiraz on Nowruz will cost 780 thousand tomans per person. A four-day vacation package to Esfahan will cost 559 thousand tomans per person, a vacation in Kerman will cost 759 thousand tomans, and a five-day vacation in Kurdistan and Kermanshah will cost 659 thousand dollars per person. The director of a travel agency said that the prices of vacation packages in Iran have gone up by 20-25 percent this year compared to last year, which reflects the increase in the costs of airline tickets and hotels.
The prices of vacation packages to other countries have gone up by an even higher rate of over 50 percent. An Iranian who wishes to travel to the United Arab Emirates this year will have to pay at least 1,600,000 tomans. A nine-day vacation in Malaysia and Singapore will cost 10,855,000 tomans per person, a ten-day vacation in China will cost 11,295,000 tomans, a six-day vacation in Greece will cost 8,545,000 tomans, an eight-day vacation in Switzerland will cost 15,345,000 tomans, eleven days in Italy and in France will cost one person 16,235,000 tomans, fourteen days in Italy and Spain will cost 21,825,000 tomans, and a vacation in Turkey, considered a popular tourist destination for many Iranians, will cost at least 1,900,000 tomans per person (Ebtekar, February 17). Given the sharp increases in prices, Mohammad Rasoulinejad, director of the Iranian Airports Company, estimated that the number of flights (both domestic and international) during this year’s Nowruz vacation will drop compared to last year, even though it will still be about 20 percent higher, compared to the usual number of flights.
It’s not just the flight ticket prices that have become considerably more expensive. With Nowruz just around the corner, it was reported that train ticket prices have also gone up by a sharp 31 percent. Nasser Bakhtiari, director of the Passenger Trains Company, told Mehr News Agency (February 18) that the price increase decided by the company reflects only part of its growing expenses, which require an even higher increase.
Workers’ crisis deepens ahead of the holiday
In addition to the price increases and the downturn in economic activity, several news websites affiliated with government critics have reported ongoing delays in the payment of salaries and a further exacerbation of the crisis at Iran’s industry factories, which has led to lay-offs on the eve of the New Year. ILNA News Agency has reported in recent days that 2,300 workers at two factories that produce pipes and metal in the city of Saveh, about 100 km (60 miles) southwest of Tehran, have not received their salaries for three months. The workers’ representative said that, as the New Year is approaching, the workers find themselves under increasing economic pressure due to the price increases and the wage delay (ILNA, March 8).
An Iranian website for workers reported a wave of lay-offs at factories across the country. The report, titled “Factory closures and worker lay-offs increase ahead of the holiday”, said that the growing hardship facing the factories has caused many of them to close down or lay off workers, and that hundreds of workers have been fired recently (www.irankargar.com, February 21).