U.S. sanctions hitting Iran hard

by WorldTribune Staff, November 20, 2018

U.S. sanctions are exacting a heavy toll on an already angry Iranian citizenry.

The Iranian rial has fallen to record lows, economic activity has slowed dramatically and hundreds of companies have suspended production and laid off thousands of workers since U.S. sanctions were re-imposed on the Islamic Republic, Reuters reported on Nov. 20.

Official projections indicate unrest could flare up again in Iran as U.S. sanctions make the economic crisis worse.

U.S. President Donald Trump, after withdrawing from the nuclear deal in May, imposed sanctions directed at purchases of U.S. dollars, gold trading, and the automotive industry in August. This month, Iran’s vital oil and banking sectors were hit.

Iran has already been hit by widespread unrest this year, with young protesters angered by unemployment and high prices clashing with security forces.

Official projections indicate unrest could flare up again as sanctions make the economic crisis worse, the Reuters report said.

A parliamentary report in September warned that rising unemployment could threaten the stability of the Islamic Republic.

“If we believe that the country’s economic situation was the main driver for the recent protests, and that an inflation rate of 10 percent and an unemployment rate of 12 percent caused the protests, we cannot imagine the intensity of reactions caused by the sharp rise of inflation rate and unemployment.”

The report said if Iran’s economic growth remains below 5 percent in coming years, unemployment could hit 26 percent.

An Iranian company that makes fizzy drinks, Tamnoush, told Reuters that it has shut down its production line after 16 years and laid off dozens of workers. It was facing massive losses as U.S. sanctions pushed up the price of imported raw materials.

“All our 45 workers are jobless now. The men are driving taxis and women are back to being housewives,” said CEO Farzad Rashidi. “We have lost around five billion rials ($120,000 at the official rate) in the last few months, so the board decided to suspend all activities for as long as the fluctuations in the currency market continue. It is stupid to keep driving when you see it’s a dead end.”

The International Monetary Fund has forecast that Iran’s economy will contract by 1.5 percent this year and by 3.6 percent in 2019 due in large part to dwindling oil revenues.

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