In the working-class neighborhood of Tehran surrounding Imam Hussein Square, the side streets and alleys are lined with secondhand stores and small repair shops for refurbishing all manner of household goods. But with little to do, most shopkeepers idle in front of their stores.
A 60-year-old man named Abbas and his son Asgar, 32, lounged in two of the secondhand, faux brocaded armchairs that they sell. Asked about their business, Abbas, who did not want his surname used for fear of drawing the government’s attention, looked incredulous.
“Just look down the street,” he said. “Business is awful. there are no customers, people are economically weak now, they don’t have money.”
After years of crippling U.S. sanctions that generated chronic inflation, made worse by Iran’s economic mismanagement and corruption, Iranians increasingly feel trapped in a downward economic spiral.
Virtually every person interviewed during six days of reporting in the Iranian capital described a pervasive sense of losing ground economically, of becoming window shoppers rather than buyers, of patching machinery used in factories because replacements are too expensive, of substituting lentils for lamb.
Even in the upscale Pasdaran neighborhood of Tehran, where chic cafes serve croissants and cappuccino and the avenues are lined with grand, Art Deco apartment buildings, most Iranians, regardless of their political views, have one demand for their next president, who will be chosen in a runoff election on Friday: Fix the economy.
When asked how her business was doing, Roya, a 25-year old woman with a warm smile, who runs a small cosmetics shop in a bazaar in the north of Tehran, had a one-word response: “Less.”
Yet, with shelves crammed with moisturizers, mascaras, blushes and serums, the shop appears to be flourishing. So what is missing?
“There is less, less of everything: fewer customers, they buy less, and the imported cosmetics come from fewer places,” she said, after asking that her surname not be used because she feared reprisals from her boss or the government.
The French and German brands prized by sophisticated Iranians have become too costly for all but the very rich, she said.
Also missing on Iran’s gridlocked streets is much variety in the cars. Some are the aging products of joint ventures with European and Japanese manufacturers after sanctions were eased, or domestically produced copies of them.
When President Donald J. Trump unilaterally withdrew the United States from the 2015 nuclear agreement Iran had negotiated with Western powers and reimposed sanctions on banking and oil sales, much foreign investment went, too.
At the same time, the trappings of wealth are still readily visible. Fancy consumer goods, including iPhones and designer clothes; Italian kitchenware and the latest in German lamps are for sale in North Tehran’s malls and boutiques. Building projects are underway in many neighborhoods. And despite relentless sanctions, the government has managed to expand its sophisticated uranium enrichment program.
Iranians’ sense of their diminished economic circumstances stems in part from the contrast with the period of the 1990s until 2010, when the middle class could count on seeing their real incomes rise every year.
Since then, outside of a small group of well connected clerical and military people, along with an elite of industrialists, developers and high-ranking professionals, who dominate the heights of the economy, Iranians’ incomes and assets have been dragged down by inflation and the weak currency.
While there were about 8,000 Iranian rials to the dollar in 2000, that number is now around 42,000 at the official rate and closer to 60,000 on the street. Inflation has leveled off, but it is still running at about 37 percent annually, according to the International Monetary Fund — a rate that would be unimaginable in the United States or Europe.
Despite the severe headwinds, the country has managed to eke out economic growth of about 1.7 percent per year since 2010, when the Obama administration stiffened sanctions over Iran’s nuclear program. Economists say that growth is attributable to increasing oil production and sales, primarily to a growing market in China, according to the Congressional Research Service.
“Sanctions have cast a long shadow on Iran’s economy, but they have not led to an economic collapse,” said Esfandyar Batmanghelij, the head of the Bourse and Bazaar Foundation, an economic think tank focused on the Middle East and Central Asia. But achieving slender growth despite the sanctions, he added, is little comfort for Iranians who are painfully aware of “how much is being left on the table.”
The currency depreciation is so severe that when foreigners exchange, say, $100 for Iranian rials, they are handed multiple thick wads of bills so bulky and heavy that they have to be carried in a briefcase or backpack. The government has begun to introduce a new currency, the tomam, officially equal to 10 rials.
“Only those who have dollars are comfortable,” said Vahid Arafati, 36, as he sat in a cobbled square outside his small café, drinking espresso and fresh-squeezed carrot juice with friends.
While middle-class people talk about housing costs and how young people postpone marriages because they cannot afford to buy homes, less fortunate Iranians, who live month to month on meager salaries and spend on average 70 percent of their income in rent, face a far worse situation.
During the presidential voting last Friday at Masjid Lorzadeh, a mosque in a less affluent neighborhood in south Tehran, many people spoke angrily about the U.S. sanctions and what they had done to Iran, but also pleaded that the next Iranian president hear their distress.
“I want the president to listen to my problems,” said Mina, a 62-year old woman who, like most women there, was dressed in a black, head-to-toe chador. “I live in a basement, I have children, they cannot find work, I need surgery, but I have come to vote anyway,” she said, wincing as she moved forward toward the ballot box.
There is no limit enforced on how much landlords can increase rents, leaving people like Mina in a constant state of anxiety over whether they will be priced out of their homes.
The woman next to her, Fatima, 48, a homemaker, was bitterly angry, especially at the United States for the sanctions, which she blames for Iran’s economic problems. “These problems, the sanctions they are created by our enemies but they will not be successful,” she said. “We will stab our enemies’ eyes.”
Abbas, the chair salesman, has a different take on the economy. “Look, Iran is a rich country, but that wealth doesn’t go into the hands of the people” he said. “I don’t know where it goes, I am not the government, maybe they know where it goes, but every year it gets worse.”
“No president will help,” he added. “The last president, when he came to power three years ago, a kilo of meat was 100,000 tomams. Now it is 600,000 tomams.”
A few doors down, in the workshop where the chairs Abbas sells are refurbished, the mood is even bleaker.
In the back, two workers sweated over the cushions they were recovering, working swiftly and wordlessly. They were educated, they said, but after years of declining fortunes, their families were unable to make ends meet, and they had been forced to take any jobs they could find.
A third man, Mohamed Reza Moharan Zahre, 36, said he had finished high school and was ready to go to college, hoping to become a pilot. But his father’s carpet store was facing bankruptcy, so he left his studies to help out.
Now he says his only hope is to emigrate to Germany.
“Many of my friends have left the country. Going legally is difficult, but what choice do we have?” he said. “I earn by the piece, maybe $220 a month, and $180 goes to rent. I am single, how can I marry? Iran is not a good place for earning money.”
Seddighe Boroumand, 62, a school janitor even though she is barely over four feet tall, was driven close to tears describing how her dwindling ability to afford anything beyond shelter and food has torn into the fabric of her life.
“My daughter died eight months ago because I did not have the money to buy the medicines she needed,” Ms. Boroumand said. “She had a lung problem and couldn’t breathe, I watched her gasping. And my first son had a heart problem and he died, too. He had a baby, and I pay money to support his baby.”
“My third son was a conscript but he had some physical disability and we take care of him,” she added, nodding to her husband, who works in the same school as she does.
“We ask the politicians to end the suffering.”
