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Iran Facing Economic Uncertainty

- MIDDLE EAST FORUM - Seth J. Frantzman - The Jerusalem Post - MAY 17, 2022 -

Iran's economy is particularly vulnerable to supply chain problems because of its reliance on China.

Iranian media are admitting the country has severe economic hurdles ahead. This is an issue that affects the whole world and not just Iran.

Supply-chain problems have become the norm during the pandemic. China, which has lockdowns in the key city of Shanghai, is spreading global economic chaos.

Iran is vulnerable because it is already under sanctions and also because Tehran signed a 25-year deal with Beijing and relies on China.

Iran's regime believes that China is the future, and it wants to be untethered from relying on the West. But the West is perhaps weathering the economic storm better and also has different pandemic policies geared to opening up, while China is closing down. Iran didn't count on this, and now it is facing real troubles.

Video of clashes and protests over the past week are only one part of the Iranian economic problem. Because Iran crushes dissent, it is hard to know if the videos reflect widespread discontent. What we can measure is that even Iranian media outlets, especially those affiliated with the IRGC, are no longer talking about missiles and drones but are droning on about economic issues. For instance, the semi-official Fars News Agency published an article about subsidies for basic products such as oil and eggs.

When major media that usually champions "martyrs" are talking about eggs, butter, oil and chicken prices, that is because there is a huge problem. The media don't say there is a huge problem, but why put articles about subsidies at the top of the pro-government propaganda media website unless this is a serious issue. People don't need subsidies when they can afford basic goods.

Tasnim News Agency published articles about a new program to build 100,000 housing units and help people buy cars. An article about cars said the system was working to create more "transparency" and "fairer supply." That sounds like the system is breaking down. Another article seemed to reflect inflation fears, noting a desire by the government not to have rents and housing increase more than 25% in the near term.

Other articles promised that Iranians would get more subsidies and deposits in their accounts. Another article even touched on the price of bread and more talk of subsidies. "What about the subsidies?" asked an article at Tasnim. Solat Mortazavi, vice president for executive affairs, said bread and other basic goods would not become more expensive, Fars reported.


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