In an Instagram post on Sunday, Iranian footballing legend Ali Karimi urged people not to buy gold coins, automobiles or any other commodities, the prices of which have gone up over the past few weeks.
Many athletes and celebrities have also joined his movement, re-posting his message and hashtagging “I don’t buy”.
Karimi’s campaign reminds us of similar initiatives launched over the years. The most significant and almost successful of all these campaigns was the one billed “No to buying new cars” in the fiscal 2015-16. However, the campaign collapsed when the government offered cheap car financing loans.
Campaigns focused on political or social issues have all but achieved their objectives in Iran. For example, Iranians used social media to send mocking messages to Israeli Prime Minister Benjamin Netanyahu in 2013, after he falsely claimed they were banned from wearing jeans.
A campaign by environmentalists to protect Asiatic cheetahs (the Iranian cheetah), which are on the verge of extinction, also proved to be successful at least in raising people’s awareness. Economic-themed campaigns, however, are mostly doomed.
President Hassan Rouhani has yet to finish the first year of his second tenure. However, the economic stability of the country during the first term of his presidency has waned. The psychological impacts of US President Donald Trump’s stance toward Iran and the looming threat of sanctions, as well as domestic mismanagements are to blame for the prevailing economic situation. A look at statistics would help shed some light on the current state of the economy.
Each US dollar was exchanged for about 37,400 rials in the fiscal 2016-17, the final year of President Rouhani’s first term, but in the last fiscal year (ended March 20, 2018) and the initial months of the current year, it rallied to the neighborhood of 70,000 rials.
Gold coin prices stood at 12 million rials in 2016-17, but have since hit the all-time high of 24 million rials.
Among domestically-manufactured cars, the price of SAIPA’s cheapest model Pride was around 208 million rials, which has now jumped over 225 million rials.
The imported cars market has gone totally berserk, hitting a phenomenal rise of 200% this year.
The prices of essentialy goods are also going out of control: According to the Central Bank of Iran’s reports, egg prices have registered a 51% rise, dairy products 8.5%, rice 2.7%, vegetables 3.4%, meat 23.3%, tea 20.7% and vegetable oil prices have increased 1.9% in the two months of the current Iranian year (March 21) compared with the same period of last year.
Who’s to Blame?
The country’s policies need to be focused on production, Mohammad Reza Najafi-Manesh, a member of Tehran Chamber of Commerce, Industries, Mines, and Agriculture, told the Persian daily Entekhab.
“Currently, we have adopted misguided policies by encouraging people to save their money in banks and earn a lot of interest on their investment. We need to channel this capital toward production,” he added.
Majid Reza Hariri, deputy head of Iran-China Chamber of Commerce, said the current unfolding economic crisis is somehow similar to the economic meltdown of 2012-13 when the value of the rial plunged to its lowest against the dollar.
“The official exchange rate of the dollar was 12,260 rials while its market rate was 34,000 rials back then. It is our hope the same financial crisis won’t happen in the near future,” he said.
Under the current circumstances and the uptrend in foreign exchange, gold coin and automobile prices, we need to wait and see what will become of this campaign.
