Since the 12-day war between Iran and Israel last June, during which the US carried out air strikes on key Iranian nuclear facilities, the Iranian economy has remained in a state of suspense, and many think that it is not a question of “if” but “when” hostilities will flare up again.
The resumption of talks on a new deal between Iran and the US in February, with Trump threatening military action if the Iranian government does not agree to his demands, has not helped the business sentiment much either.
“Investors are not thinking of expansion or creating jobs. They are only thinking of saving their business,” says a spokesman for Iran’s private sector.
Farshid Shokrekhodaei, head of investment and financing at the Iran Chamber of Commerce told Ilna news agency that because of these conditions “the capital is going towards investing in assets such as foreign currency and gold”, instead of investing in productive businesses.
This is in addition to other crises that had been adversely affecting businesses and people.
Iran is facing a serious shortage of electricity, natural gas and water, as a result of years of underinvestment in infrastructure and the government’s failure to manage consumption.
Every winter, factories have their gas supply cut off for days, even weeks, at a time. In the warmer months, their electricity is cut off. People also have to endure regular blackouts at home, as well as their drinking water supply being shut off in larger cities.
But all those problems are overshadowed by the “not war, not peace” situation – as Supreme Leader Ali Khamenei put it – between Iran and the US.
Many people, like Parham, a 26-year-old from Tehran, do not think that it can “continue for much longer – not for us, nor for the US.”
“Given that people are getting poorer and poorer, we’re going to see a wave of social instability,” he says.
