Candidates in the Iranian presidential election on Friday have vowed to revive the flagging economy. However, Reuters is reporting that voters see little prospect of relief from a cost of living squeeze without an end to sanctions and an easing of Iran’s international isolation. The daily struggle of ordinary Iranians to make ends meet is a persistent challenge for Iran’s ruling clerics, who fear a revival of protests that have erupted periodically by lower and middle-income communities angry at enduring hardship.
Most candidates seeking to replace Ebrahim Raisi following his death in a helicopter crash last month say they plan to emulate his policy of economic self-reliance and more business ties to Asia. Iran’s Statistical Center says that during Raisi’s three years in power, the country’s economy re-emerged from a 2018-19 slump caused by the 2018 reimposition of sanctions, and growth peaked at 5.7% for the year ending in March.
Yet most of this expansion was driven by the energy sector, as the country experienced a 70% rise in oil output, now running at about 3.5 million barrels per day. Oil exports exceeding 1.4 million barrels per day, and mainly going to China. Without hydrocarbons, Iran’s growth last year would have been just 3.4% and its trade balance would have hit a deficit of $16.8 billion. The World Bank says unemployment in the country is running at about 7.6% – compared to 9.6% when Raisi was elected.
Yet Reuters reports that many formal jobs pay a pittance, meaning the true figure of people without adequate work to live on is probably far higher. Iranians’ purchasing power also continued to shrink during Raisi’s presidency. Prices for basic goods like dairy, rice and meat have skyrocketed in recent months. The subsidised price of lavash bread, the most popular for Iranian households, shot up by at least 230% in the last three years, while red meat has become too expensive for many, its price rising by 440% to $10 per kg.
A teacher’s monthly salary is about $180 and many construction workers earn little more than $10 a day. Candidates have promised to implement the country’s seventh development plan approved last year by parliament. It aims to curb inflation and develop exports and sets out ambitious targets of achieving 8% annual growth under sanctions. The snap ballot has given candidates little time to develop detailed economic plans.
Most say the economy should become more self-reliant before Iran tries to end sanctions, imposed over Tehran’s disputed nuclear programme, while low-key moderate Masoud Pezeshkian and hardline cleric Mostafa Pourmohammadi were more vocal on the need to open up relations to help the economy. Election debates have mainly focused on fiscal imbalances, mismanagement of resources and graft, domestic issues which many Iranians believe are deep-rooted and resistant to reform.
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