IT WAS the first time in 15 months that Iranian envoys had met the five permanent members of the UN Security Council plus Germany. Their talks in Istanbul on April 14th were cordial, though the sole agreement was to carry on talking. No one said they would ease, any time soon, the crippling economic sanctions aimed at thwarting Iran’s nuclear ambitions.
To currency dealers in the bazaar of the Iranian desert city of Yazd, that hardly mattered. On the eve of the talks one American dollar bought 19,000 rials. The next morning it bought 16,000, a 15% jump for Iran’s currency. “I don’t know when I last walked home knowing the money in my hand was worth more than when I started the day,” said one trader, clutching an enormous wad of notes, the size of which belied their more modest value.
Although the nuclear negotiators only agreed to meet again in Baghdad on May 23rd, Iran’s envoys managed to exude enough sincerity to persuade Western officials that robust diplomacy might work after all. After first hinting that Iran might alter its uranium-enrichment policies in return for a commitment to ease the sanctions, Iran’s foreign minister, Ali Akbar Salehi, said the talks were a turning point in his country’s dialogue with the West.
European diplomats also took heart from the fact that the letterhead carried by Iran’s chief negotiator, Saeed Jalili, stated that he was now the personal representative of Iran’s Supreme Leader, Ayatollah Ali Khamenei, a man known for abrasive dogmatism regarding the West, and ardent attachment to his country’s nuclear independence. Western diplomats viewed the endorsement as a sign that the Supreme Leader’s pragmatic streak was showing through at last.
Some Iranians also sense a new mood. “Our government is desperate,” says a lonely attendant at Alexander’s Prison, a 15th-century domed structure that is one of the tourist attractions in Yazd, “because they know how desperate the people are.” At the peak of Iran’s tourist season, his courtyard should be brimming with foreign visitors. Instead it is virtually empty.
War and jaw means poor
Despite the persistent threat of military strikes at the hands of either America, Israel, or both, Iranians from Tabriz to Shiraz talk more of the lack of new jobs and soaring inflation—officially said to be 21.5% but widely placed closer to 30%—than of looming war.
The manager of a big hotel in Shiraz says that since the Persian new year celebrations, which began on March 21st, occupancy rates have hovered at between 30 and 40%. In most years you cannot get a room without booking in advance. His main concern about the talk of war was that it scared tourists away.
With the European Union set to halt all oil imports from Iran from July 1st, and Iranian officials scrambling to find new buyers to make up the shortfall in foreign-currency receipts, many believe that unless Iran backs down on the nuclear issue, today’s hardships may be only a foretaste of worse to come.
In Tabriz, a big city in the north-west of the country dominated by the Turkish-speaking Azeri minority, residents say sanctions already threaten the future of their two biggest infrastructure projects.
The first is a long-delayed metro network. Already six years behind schedule, and with less than half of the planned 17km of track for Line 1 laid so far, government planners say it will be at least two years before any trains start moving. Also under a cloud is a twin-tower, 40-storey office and shopping complex which, if ever finished, will be one of the Iran’s largest commercial buildings. For the time being it remains an impressively large hole in the ground.
On the outskirts of Tabriz, high above a valley thick with blooming walnut and apricot trees, the road passes through a cluster of half-completed apartment towers, part of an effort by President Mahmoud Ahmadinejad to fulfil his campaign pledge to put Iran’s oil money on the tables of the disadvantaged. This project, too, is stalled, and without another injection of government financing it could become one more casualty of the sanctions.
For the crowd of unemployed men in their 20s who spend their days making conversation in Tabriz’s Khaqani Garden, life is at least a little easier than in the capital. One out-of-work civil-engineering graduate said he had already made the move to Tehran and back, priced out by scarce job opportunities and the rising cost of accommodation. “I’m concentrating on practising English to boost my chances of leaving the country,” he said.
Not everyone in Iran is pleading poverty. In the wealthy north of the capital, Tehran, many flout the regime’s favoured dreary, functional look. Opening soon on swanky Mirdamad Boulevard, a new Maserati dealership offers flashy motors for a mere $500,000 in cash, including customs duties of 100% or more. Other luxury car dealerships say sales have slowed in recent years, but should pick up if the currency stabilises.
“Minority Plunder Wealth of Majority”, teased a provocative front-page headline in a Tehran daily last week. It turned out to refer to a speech by Mr Ahmadinejad, lashing out at the minority of world powers who plunder the wealth of a majority of countries. “Another false hope that someone might actually be telling the truth around here,” observed one Western diplomat. “I’ve made so many predictions about what will happen next, and I’ve been wrong so many times that I’ve given up. Now I just guess.”