August 28, 2007


Iran's people await their share of riches: Amid Ahmadinejad's promises, many find that the oil boom has failed to trickle down. (Kim Murphy, August 28, 2007, Los Angeles Times)

Hussein Alinejad earns just $217 a month selling fragrant kebabs of chicken and lamb in a steamy shop here, and he knew Iran's leader couldn't help but be moved by his plight.

So when President Mahmoud Ahmadinejad came to town in December, Alinejad wrote him a letter explaining his circumstances. He had three children, and a nice piece of land, but no money to build a house. Could he perhaps have a bank loan?

Twenty days later, he got a call from the Imam Khomeini Relief Committee, a charity linked to the government: "Come and get the answer to your letter." When he arrived, someone handed him an envelope with more than a week's salary inside, his to keep. And his loan application was under review.

But it's been eight months since the president came through, and Alinejad still hasn't heard anything about his loan. A friend got one, but couldn't afford to buy more than a small garden plot with the money.

Across this city and other areas of relatively prosperous Mazandaran province in northern Iran, one of many rural regions where Ahmadinejad has enjoyed enthusiastic support since his election in 2005, there are growing worries that the trickle-down oil revenue the president promised has trickled only so far. As the Islamic Republic increasingly struggles with deep-rooted economic problems, some here are starting to mutter about broken promises. [...]

In June, 57 economists issued an open letter warning that "government mismanagement is inflicting a huge cost on the economy," with the current high oil prices only "delaying the imminent economic crisis."

"What you need to understand is that every 1% increase in inflation means that 100,000 Iranian people go under the poverty line," said Saeed Leylaz, a Tehran-based business consultant. "And the most pressure of inflation is not over people in Tehran, it is over the poor people in the provinces. And they are much, much more under pressure than they were two or three years ago."

In his free-spending trips to the provinces, Leylaz said, "Mr. Ahmadinejad is trying to exchange the oil income of petrodollars into loyalty, in one sentence. But day by day, this is working less and less."

Ghaemshahr, a city of half a million people about 100 miles northeast of Tehran, was once one of Iran's most successful industrial towns. Its five textile mills once employed more than 6,000 people in decent-paying jobs, turning out fabrics, uniforms and industrial storage bags that were sold all over Iran.

The city's troubles long predate Iran's current government. Like those in failing textile towns around the world, Ghaemshahr's aging mills found themselves ill-equipped in a globalized world to compete with cheap labor and materials from farther east in Asia. Worse, eight years of war with Iraq in the 1980s saw much of the city's workforce deployed to the front; afterward, aging skilled workers were often laid off in favor of unskilled war veterans.

In the early years after the 1979 Islamic Revolution, the government was reluctant to import spare parts from Europe and the U.S. Instead, it insisted on manufacturing inferior replacements inside Iran and, later, on shutting down functioning equipment to provide spare parts for other machines.

Eventually, many of the remaining machines broke down too.

Now, only three of the original five factories are still open, and they are producing very little, said Aliasghar Moghaddesi, until recently manager of the Goni Bafi Bag Factory in Ghaemshahr.

"These factories need only two things, I can tell you. One, a healthy management, and two, to be updated," Moghaddesi said. "But politics and industry cannot be compatible, and slogans from politicians cannot do anything."

Posted by Orrin Judd at August 28, 2007 9:49 AM

It's Bombs vs. Butter, and Bombs are winning.

Posted by: PapayaSF at August 28, 2007 12:51 PM

Let them eat bombes.

Posted by: Genecis at August 28, 2007 4:07 PM