December 21, 2013

JUST SKIP STRAIGHT TO THE FREE TRADE AGREEMENT:

Iran copes with sanctions but wants to bloom (David Ignatius, December 20, 2013, Washington Post)

The true burden of sanctions is that this economy is a shadow of what it might be. This cost in lost opportunity will only grow if Iran can't make a nuclear deal that would ease the squeeze on oil sales and banking. And Iranians know it: Many told me during a visit here last week that their economy could be booming if the country weren't so isolated.

"The situation from the economic point of view is very bad, this is no secret," says Saeed Laylaz, an economic commentator and analyst who advises Iran's domestic automobile industry. Car production has plummeted the past two years, he says, after rising from 6,000 vehicles annually when he started working with the automakers in 1989 to 1.5 million in 2011.

Mohammad Khoshchehreh, an economics professor at Tehran University, told me that economic output overall has fallen by about 6 percent over the past year. That's close to the estimate of a 5.6 percent drop released Thursday by the Institute of International Finance in Washington.

The middle class here is especially squeezed. An apartment for a family of four in central Tehran costs at least $500 a month. Feeding the family adds another $700. So that's $1,200 a month -- more than many jobs pay -- before the family even begins paying for other necessities and incidentals. Typically, both husband and wife must work, often at two jobs, to pay the bills.

Frustration about poor economic performance seems to center on hard-liners such as former president Mahmoud Ahmadinejad and his allies in the Iranian Revolutionary Guard Corps. 
Posted by at December 21, 2013 9:59 AM
  
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