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Iran's Hope Is Sanctions Relief, But Reality Is Struggling Economy

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Iran's Hope Is Sanctions Relief, But Reality Is Struggling Economy


Iran's Hope Is Sanctions Relief, But Reality Is Struggling Economy

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  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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In Iran, dissatisfaction with the economy is one of the main forces driving many Iranians to hope for better relations with the West. And Iran's president, Hassan Rouhani, elected last year, promises that better times are on the way.

Still, so far beyond the marginal gains that have come with greater confidence in a new Iranian administration, very little has changed.

NPR's Peter Kenyon has just been in Tehran, where he spoke with the rich and the poor.

PETER KENYON, BYLINE: Iran's economy may be struggling, but that doesn't mean everyone is suffering.

In a downtown Tehran restaurant, a well-dressed young man who asks to be identified only as Ahmad sits with a friend enjoying a water pipe of flavored tobacco. Ahmad is a bit vague about what he does. First he says he's in the petrochemical business, then describes himself as an independent trader. He shares the general consensus that President Rouhani has brought a better atmosphere to the country, but no real economic changes. His own problems, however, might not elicit much sympathy from most Iranians.

AHMAD: (Through translator) The regulations definitely need to be changed. Take importing cars to Iran: The tariff is 105 percent on each car. I wanted to import two Mercedes, but you can only think about one.

KENYON: In addition to problems of income inequality, Iranians say one of the major problems Rouhani faces in lifting Iran's economy is the opposition of entrenched interests who profit from Iran's isolation. The powerful Revolutionary Guard, for instance, is a major economic player. One graduate student who gives only his first name, Arman, says things hit a low point under former President Mahmoud Ahmadinejad.

ARMAN: What was really frustrating was the fact that, you know, nothing was ever going to get better, because the more sanctions there were going to be, the richer some people are going to get.

KENYON: In the poor neighborhoods of south Tehran, the economic struggles are more recognizable. Iran remains an economy of subsidies, although some direct cash payments have been replaced by food baskets for the poor. That does not sit well with those forced to stand in line in the winter cold. Even here, though, flashes of humor can be found.

UNIDENTIFIED MAN #1: (Foreign language spoken)

KENYON: An old man in a wool cap startles a reporter by shouting: We chant death to America all the time. What are you doing here asking questions? But then as the men around him break into grins, he smiles and says, well, I guess you're OK then. Seventy-seven-year-old Mehdi makes it clear that they may need help but they don't like food lines. They know the difference between a poor neighborhood and a refugee camp.

MEHDI: (Through translator) This is the fourth time I've come. They tell me to come back later, and then they say they've run out. It's not right.

KENYON: Besides a slight easing of sanctions last month, Iran has benefited from the widespread conviction that Rouhani's economic team is far more competent than Ahmadinejad's. Greater confidence - and limited success in nuclear negotiations with six world powers - have helped reverse Iran's brutal inflation rate and steadied the Iranian rial somewhat against the dollar. Doing more, however, will require the lifting of sanctions by further curtailing Iran's nuclear program, and that effort has enemies at home and abroad. Conservative U.S. and Israeli watchdogs sound regular alarms that the architecture of the sanctions regime is crumbling, largely based on an increase in trade delegations visiting Iran and inflated Iranian predictions. President Obama says Washington will come down like a ton of bricks on those who violate sanctions. But inside Iran, people aren't seeing any improvements that would justify such concerns. Even the man in charge of making Iran's oil contracts more attractive to foreign companies is tempering expectations. Oil ministry official Mehdi Hosseini says Iran needs a massive $150 billion in foreign investments in the coming years, and so far companies aren't committing.

MEHDI HOSSEINI: (Through translator) We still have sanctions now. There are companies coming and going, but we can't sign contracts while the sanctions remain, and contract talks will take time.

KENYON: For now, Iranians say, there's nothing to do but struggle on, recognizing that better times ahead depend on factors beyond their control. Peter Kenyon, NPR News.

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