Many Iranians Forced to Take Out Loans to Pay for Daily EssentialsWhile the Trump administration’s sanctions are driving many Iranians into debt, there is little indication they will trigger an uprising that would deliver victory to the U.S.
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A video that recently went viral on Iranian social media shows people eating caviar and rare salmon for breakfast in Tehran, a meal costing around 10 million tomans ($50), the monthly wage for many Iranians. Another viral video shows a man wrapping a thick piece of red meat between two layers of bacon, adding additional meat, and then wrapping the concoction in a bun soaked with fat. Such videos have become increasingly popular in Iran as the country grapples with the rising cost of meat and other food staples. The head of Iran’s Association of Meat and Protein Products Packing Industry said in late May that in response to the high prices, demand for meat products had fallen 50% compared with the previous year. Last summer, one kilogram of mutton cost around 1 million tomans; this summer, the same portion reached 2 million tomans ($10). The announcement of a new campaign of sanctions targeted against Iran on August 24—dubbed Operation Economic Outcast by the U.S. Treasury Department—and aimed at further turning the screws on the Iranian economy, has been met with a shrug by many ordinary Iranians already exhausted from trying to survive during a rapid collapse of living standards unseen in the country’s modern history. The new campaign, which has so far included the sanctioning of several banks and airlines servicing Iran, comes on top of a blockade of the country’s southern ports, which has halted the import of basic resources. As the sanctions campaign continues, the Iranian rial has collapsed, falling Wednesday to a record low of roughly 2.34 million rials to the dollar, making already scarce imports dramatically more expensive. Iranians have now been forced to navigate a situation in which obtaining the bare necessities of life requires accepting potentially ruinous personal debts, or is simply impossible. “A packet of tea that used to cost 300,000 to 600,000 tomans [$2-4] now costs one million tomans [$5] after the war. Why should a packet of tea cost one million tomans when a worker’s daily wage is not even one million tomans? If you are a day laborer, you have to give up even buying tea,” said a construction worker in Tehran, who like others who spoke to Drop Site for this article, requested anonymity to avoid retaliation. “Soap, dental floss, tobacco, and goods like these have become unaffordable for us. Our situation has become embarrassing. To buy the personal hygiene products we actually want, we have to take out loans.” Food and MedicineWhile the Iranian government initially sought to cushion the economic crisis at the start of the year by providing approximately 80 million people with monthly electronic food credits for four months, worth 1 million tomans—about $7 when the program was announced—the payments were rapidly eroded by inflation and the rial’s continuing collapse. At the start of the calendar year, the country’s minimum wage rose to 10 million tomans per month, equivalent at the time to $100. But with the outbreak of the war and a rise in the dollar exchange rate, the minimum wage by September had once again fallen to the equivalent of $80—even as the price of food rose 3.6% in August alone and stood approximately 128% higher than a year earlier. According to Consumer Price Index (CPI) reports published by Iran’s Statistical Center, which measure the price of a basket of basic items for each household, prices for basic goods are 2.7 times higher than two years ago, while wages have not moved or have even declined. “Before, even buying small quantities of fruit was a source of embarrassment, and people would feel ashamed, for example, to buy half a kilo of something. But now, even buying fruit one piece at a time is no longer something to be ashamed of. People simply don’t have the money to spend, and those who have children or a pregnant wife cannot cut fresh fruit and vegetables from their shopping list,” said a 35-year-old resident of Tehran. “I’m not even talking about expenses like entertainment or going to restaurants. Ordinary household shopping alone eats up an average salary. The reason you walk around the city and see everyone angry and arguing with each other is this situation. People see that they are constantly working, but every day they are getting poorer. These things put a lot of pressure on people’s nerves.” Even though many people have cut parts of their diets, such as protein, dairy products, or fresh vegetables, because of economic pressures, the financial burden of rising medical prices continues to weigh on them. Sanctions and the naval blockade, which have prevented raw materials needed for the production of medicines from entering Iran—along with the destruction of a large number of pharmaceutical manufacturing plants during the war—have had a significant impact both on the availability of medicines and on their cost. “The increase in the price of raw materials, the inability to secure foreign currency, and other economic problems have caused medicine prices to rise and production to decline. On the other hand, because pharmacists cannot adjust their selling prices in line with their costs, it costs them more to produce the medicines than they can sell them for, putting them under even greater pressure, which also affects the market,” Dr. Shahram Kalantari, head of the Iranian Pharmacists Association, told the Mehr news agency. “All of this is happening while the government is unable to properly repay its debts to pharmacists and pharmacies, placing them under even greater economic pressure.” The prices of basic painkillers like ibuprofen and antibiotics like amoxicillin have doubled or tripled over the past year, leaving many Iranians in a constant struggle to track down lifesaving medicines which are normally widely available. “Poverty in Iran has been increasing,” said Javad Hoseini, the head of Iran’s State Welfare Organization, according to ILNA, the Iranian labor news agency. “And today the population living below the absolute poverty line has risen from 16 million to 34 million people, while people’s economic resilience has declined and Iran is facing the widespread nature of poverty.” That estimate came just weeks before the second wave of U.S. attacks, and before the new U.S. blockade and economic sanctions campaign that have raised the level of economic warfare against Iranians to an unprecedented level. Buy Now, Pay LaterIn the absence of a functional economy where individuals can use their wages to purchase the goods they need, Iran has seen an explosion of short-term personal loan programs, referred to as “Buy Now, Pay Later” services, where individuals can use debt to finance the purchase of clothing, food, and small consumer goods. An online women’s clothing store that operates on Instagram launched its own loan service just two months after the most recent war began, citing what the store itself described as “numerous customer requests.” Yet even this stopgap measure has done little to keep the gears of the economy turning, as low cash liquidity in an economy increasingly running on debt and deferred payments means retailers lack the money to replenish their inventories. This summer, Iran’s Purchasing Managers Index, known as the Shamkh, showed contracting net figures for new orders, inventories, sales, and exports for the 16th consecutive month. “The economic situation has become such that people genuinely need installment plans even to buy ordinary clothes for themselves. But the problem with buy-now-pay-later services is that they make it harder for us to buy and replace our raw materials,” said the manager of a clothing store. “On the other hand, if we refuse to offer these services, our sales will decline. Selling the products and hoping that the money comes back is better than keeping the goods in storage and waiting for people’s economic situation to improve.” While some U.S. officials initially framed the U.S.-Israeli war on Iran as an effort to liberate Iranians from authoritarian rule, the subsequent sanctions campaign and blockade have been bluntly described as a means of destroying Iranian society by deepening economic deprivation and provoking domestic unrest. “We have the blockade, and we are going to have the toughest sanctions in history,” Treasury Secretary Scott Bessent said in August, adding: “We are going to collapse this regime.” Earlier, Bessent told the Senate Banking Committee that Washington had “created a dollar shortage” in Iran, sending its currency into freefall and causing inflation to explode—“and hence we have seen the Iranian people out on the street.” Iran’s total trade has fallen by an estimated 25–35%, with imports declining faster than exports, while the workforce has dropped by about 450,000 from a year earlier, according to figures provided by the Iranian government. The International Monetary Fund forecasts that the economy will contract by 6.1% in 2026, as inflation drives up business expenses and consumers cut back their own spending, including on food and basic household goods. While the U.S. sanctions are succeeding in causing the impoverishment of Iranians, there is little indication that they are set to trigger an uprising that would deliver victory in the U.S. campaign. Many Iranians who spoke to Drop Site said that their concerns had shifted to merely surviving rather than pursuing political change or confronting a government that has intensified its hold on society amid the war. “I can see with my own eyes that despite having a steady income—or sometimes even earning more money than I did in some previous months—I am getting poorer every day. When I go to a café, I have to go through the entire menu and choose the cheapest thing available. Even that cheapest option gets more expensive every day,” said a 27-year-old student living in the city of Karaj. “Our lives weren’t like this before. We didn’t have to count every penny and calculate every expense. Like many others, I have turned to credit-payment services and installment purchases because I cannot afford the cost of living. A pair of sneakers costs the equivalent of one month’s salary for a person in Tehran, and the ‘buy now, pay later’ services even exist for buying food, which shows just how bad people’s economic situation has become. In such circumstances, it is obvious that everyone’s focus just shifts toward survival.” Rising InequalityAt the same time that the Trump administration announced its Economic Outcast program against Iran, Iranian government spokesperson Fatima Mohajerani, responding to a question about poverty rates in Iran in late August, told reporters: “The publication of statistics and figures related to the issue of poverty is subject to security restrictions. Although the government has the figures and statistics on this issue, it cannot make the numbers public.” The Iranian government’s revenues are also declining day by day under the pressure of sanctions and restrictions on oil exports caused by the blockade. President Donald Trump has repeatedly claimed that the Iranian government is unable to pay the salaries of its employees and security forces, though no such reports have emerged in Iran, and government employees and soldiers continue reporting for work. But a recent announcement that the government plans to increase consumer energy and gasoline prices inside Iran—both normally subsidized by government spending—shows clear signs that the country is under financial strain. A large share of the expenditure items in Iran’s current-year budget have been devoted to the war, even though most of the reconstruction work for war-related damage—estimated at between $20 billion and $40 billion, according to Meysam Zohourian, a conservative member of the Iranian parliament—has not even begun. Iranian President Massoud Pezeshkian and Parliament Speaker Mohammad Bagher Ghalibaf, speaking publicly just days apart late last month, both warned that the costs of running the country must somehow be covered and that the welfare and essential needs of the population cannot be postponed indefinitely. “No matter how strong we are militarily, if the people are hungry and we do not have financial circulation, economic growth and domestic production, we will not endure,” said Ghalibaf on August 21. Days later, Pezeshkian echoed his sentiments with apparent frustration, stating, “Some say sanctions have no effect at all. I really don’t know what to say to those people.” Their remarks were directed at domestic hardliners who made demands for major upfront sanctions relief and reparations a condition for negotiations, as well as other segments of the Iranian establishment alleged to be opposed to talks entirely. But the comments have also fueled speculation about the government’s concerns over how much economic pressure the population can withstand. At the same time, amid growing deprivation, the display of excesses such as wrapping red meat in bacon, or cafés serving caviar for breakfast has heightened the sense of inequality in Iran. In the comments section of an Instagram post showing the preparation of a meat dish, one user wrote: “Eating something like this even once has become a dream for me,” while another added: “I hold the country’s officials responsible for this situation.”
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