Iran poor remain loyal to Tehran as wealth gap widens in crisis

Masoumeh, a 47-year-old resident of a farming community near the Iranian town of Borujerd, 400km southwest of Tehran, says she feels much poorer than she did a year ago.

The housewife says she does not know why the prices of basic commodities have been rocketing but she is “miserable” that her family of 12 – with three generations sharing a modest house – is losing work and becoming poorer.

As well as being adversely affected by drought, her province of Lorestan, one of the poorest in Iran, has the country’s highest unemployment rate at 20.6 per cent – compared to 11.2 per cent nationally.

“A 10kg bag of rice was 25,000 tomans [250,000 rials, $20] last year, but it is 50,000 tomans this year. [Red] meat was 12,000 tomans per kilo, but it is 30,000 tomans now,” she said. “Our life is much more difficult compared to one year ago and we eat far less food.”

Although outgoing president Mahmoud Ahmadi-Nejad swept to power in 2005 as a champion of the poor, his combination of economic populism and a hardline foreign policy that has resulted in nuclear stalemate and the tightening of international sanctions has seen poverty increase.

As the country prepares for the presidential election on Friday, all seven candidates are promising to mend the economy and help curb the impact of sanctions.

Iran’s economy has tipped into downward spiral since the US and EU imposed banking and oil sanctions on Iran last year. Inflation – officially at 32.2 per cent but believed to be much higher – has jumped and the national currency, the rial, has lost more than 50 per cent of its value.

Unofficial data suggest that 40 per cent of Iranians now live below the poverty line, up from about 22 per cent in 2005. The government disputes these figures and insists the gap between the rich and the poor has narrowed.

Despite their increasingly difficult economic situation, Masoumeh and her family – like many of Iran’s poor – remain loyal to the Islamic regime. For her, voting is sacrosanct, for religious and nationalist reasons. “Of course we vote,” she said.

Most urban middle-class voters question the process by which the regime allegedly decides in advance who should be president and expect the poll to be rigged as they claim it was when Mr Ahmadi-Nejad won a second term in 2009.

Masoumeh regretted that Mr Ahmadi-Nejad, whom she described as “a good man”, was leaving office. She said she would be voting for Mohsen Rezaei, a former senior commander in the elite Revolutionary Guards. But she hoped that whoever won would continue the monthly cash payments that each Iranian can receive in compensation for reductions in subsidies on energy and basic commodities.

The payment, which was initially worth $45 but is now worth just $18, made a big difference to rural families. But Masoumeh said the monthly payouts should at least double to make up for the stagnation of her husband’s wages of about 1.5m rials ($120) per week, which have not increased for more than a year.

Mr Ahmadi-Nejad recently promised to increase the monthly payments but was defeated by parliamentarians fearing they would further fuel inflation.

Iran’s election is expected to go to a second round as voters appear divided and none of the candidates is likely to win an outright 50 per cent of the ballots.

Masoumeh’s sons, Behnam and Behzad, say they will vote but have bigger worries than the election.

Behnam recently lost his job as a gardener in one of Borujerd’s few factories and Behzad, a truck driver, is worried that his work would soon be cut as his employer receives fewer orders to transfer goods due to declining business.

Both blame their lack of job security on corruption by those who have connections to the political and religious elite. They said the only mine in their village is exploited by the son of a cleric in the holy city of Qom who was originally from the village but now refuses to hire local workers.

“My nightmare is that my family may soon begin to starve,” Behzad said. “We are even happy not to receive cash [for subsidies] any more if prices of goods go back to two years ago. Now it feels like we are fighting a war but this is a war for bread.”

Copyright The Financial Times Limited 2013.