Economic Crisis Looms for Iran
06 December 1994
By Robin Wright
KORDEHNAVARD, Iran -- In 1980, a year after the overthrow of the shah, Iran's "construction jihad'' swept through this farming hamlet deep in the foothills of the spiny Elburz Mountains, bringing modernity in the form of electricity, running water, a public bath and a nearby school. With a corps of engineers and laborers, Ayatollah Khomeini's revolution had arrived.
"This was a lot more than we ever got from the shah,'' said Mohammed Hossein Miveh, 91, the village patriarch, as he sat cross-legged on the floor of his nephew's mud-brick and log-roof home.
But 14 years later, the small army of workers has not been back. And the wheat, potato and walnut farmers of Kordehnavard -- like many of the mostazafin, or "downtrodden,'' in whose name Iran's 1979 revolution was carried out -- are growing angry.
"We have no phones, no clinic and no roads,'' said Reza Miveh, the patriarch's nephew. "And everything is so expensive. Who can afford sugar anymore or cooking oil? The government should be doing much more. Sometimes we wonder whether it has forgotten us.''
The Islamic Republic of Iran, the world's only modern theocracy, has reached a crisis point. Many of its most ardent backers believe the revolution has left them behind. Some feel it has already begun to collapse.
"The nation is in poverty and the country is on the verge of an explosion,'' wrote former general, Azizollah Amir Rahimi, in a letter circulated in Tehran.
For all the controversy over the religious fervor that animated Iran's Islamic revolution, the force that is most threatening the government is not ideology but economics.
The mostazafin are not the only ones who have soured. Two other groups vital to the government's survival -- the young and the middle class -- are increasingly dissatisfied. With some 70 percent of Iran's population younger than 25 and roughly half younger than 15, the country's youth will be particularly important.
Meheri Fathi, 23, is one of a growing number of young people in south Tehran who are not happy. "I want this baby so badly," she said, rolling her hand over a fully-swollen abdomen. "But we don't know where we're going to find the 300,000 rials ($111) to have it or the money to raise it. I should be happy, but instead I'm sad and scared.''
Fathi and her husband, who earns $55 a month as a textile worker, live in a maze of crude single-room cement hovels at the foot of a power pylon, from which they are tapping electricity.
The older middle class has not fared much better, thanks to skyrocketing prices. Many standard household items are beyond reach of the typical family and cars are often out of the question.
The challenge facing Iran's Islamic revolution is ultimately the same one that finally forced the failure of the Soviet Union's Communist revolution. Despite its oil, Tehran is on a downward economic spiral.
And there is no relief in sight. Because its oil industry has not been modernized, Iran faces the prospect within the next two to five years of declining production, according to Western diplomats and economists in Tehran. Income from foreign sales is further crimped by the burgeoning population's domestic consumption, now growing by 3 to 5 percent annually.
As its foreign debt soars above $33 billion, analysts predict problems are coming for the Iranian leadership.
"The government either meets internal demand for imports or its foreign debt commitment. It can no longer do both," said one Western economist. "And either way, trouble lies ahead.''
There is no systematic way to compare conditions now with those that prevailed under the shah, whose government kept no accurate economic data. But here is a straw in the wind: Many Iranians, even in senior positions, have resorted to second and third jobs to make ends meet.
For all Iran's problems, vast numbers still enjoy a better lifestyle than their Third World counterparts, diplomats say.
"Most people are probably better off in some way,'' reflected a well-known Iranian journalist. "Very little is exclusive anymore. The mostazafin share the benefits of society."
"This was a lot more than we ever got from the shah,'' said Mohammed Hossein Miveh, 91, the village patriarch, as he sat cross-legged on the floor of his nephew's mud-brick and log-roof home.
But 14 years later, the small army of workers has not been back. And the wheat, potato and walnut farmers of Kordehnavard -- like many of the mostazafin, or "downtrodden,'' in whose name Iran's 1979 revolution was carried out -- are growing angry.
"We have no phones, no clinic and no roads,'' said Reza Miveh, the patriarch's nephew. "And everything is so expensive. Who can afford sugar anymore or cooking oil? The government should be doing much more. Sometimes we wonder whether it has forgotten us.''
The Islamic Republic of Iran, the world's only modern theocracy, has reached a crisis point. Many of its most ardent backers believe the revolution has left them behind. Some feel it has already begun to collapse.
"The nation is in poverty and the country is on the verge of an explosion,'' wrote former general, Azizollah Amir Rahimi, in a letter circulated in Tehran.
For all the controversy over the religious fervor that animated Iran's Islamic revolution, the force that is most threatening the government is not ideology but economics.
The mostazafin are not the only ones who have soured. Two other groups vital to the government's survival -- the young and the middle class -- are increasingly dissatisfied. With some 70 percent of Iran's population younger than 25 and roughly half younger than 15, the country's youth will be particularly important.
Meheri Fathi, 23, is one of a growing number of young people in south Tehran who are not happy. "I want this baby so badly," she said, rolling her hand over a fully-swollen abdomen. "But we don't know where we're going to find the 300,000 rials ($111) to have it or the money to raise it. I should be happy, but instead I'm sad and scared.''
Fathi and her husband, who earns $55 a month as a textile worker, live in a maze of crude single-room cement hovels at the foot of a power pylon, from which they are tapping electricity.
The older middle class has not fared much better, thanks to skyrocketing prices. Many standard household items are beyond reach of the typical family and cars are often out of the question.
The challenge facing Iran's Islamic revolution is ultimately the same one that finally forced the failure of the Soviet Union's Communist revolution. Despite its oil, Tehran is on a downward economic spiral.
And there is no relief in sight. Because its oil industry has not been modernized, Iran faces the prospect within the next two to five years of declining production, according to Western diplomats and economists in Tehran. Income from foreign sales is further crimped by the burgeoning population's domestic consumption, now growing by 3 to 5 percent annually.
As its foreign debt soars above $33 billion, analysts predict problems are coming for the Iranian leadership.
"The government either meets internal demand for imports or its foreign debt commitment. It can no longer do both," said one Western economist. "And either way, trouble lies ahead.''
There is no systematic way to compare conditions now with those that prevailed under the shah, whose government kept no accurate economic data. But here is a straw in the wind: Many Iranians, even in senior positions, have resorted to second and third jobs to make ends meet.
For all Iran's problems, vast numbers still enjoy a better lifestyle than their Third World counterparts, diplomats say.
"Most people are probably better off in some way,'' reflected a well-known Iranian journalist. "Very little is exclusive anymore. The mostazafin share the benefits of society."
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