FOREIGN AFFAIRS: by Joseph PoprzecznyNews Weekly
Soaring inflation hits Iranian regime
, September 1, 2012
Revealing insights into economic conditions within closed societies can emerge from the most unexpected quarters.
The latest example of this has occurred in relation to the tightening of Tehran’s ― and the rest of Iran’s ― chicken and chicken-meat market.
Information reaching the West indicates that chicken prices have trebled over the past year, and nearly doubled in the last few months.
One reason for this is the fact that chicken meat is an extremely popular commodity for the average Iranian.
American Middle Eastern affairs expert, Michael A. Ledeen, makes this very point well.
“Anyone who has spent much time eating Persian food knows how important chicken is, whether it’s roast chicken, chicken with pomegranate sauce and walnuts, or chicken kebab,” he says.
How and why have the price hikes come about, and why is such a seemingly irrelevant market occurrence even of interest to Iran-watchers?
Rising chicken prices are a symptom of soaring inflation across the country. Official Iranian government figures put inflation last year at 21.5 per cent, almost double the figure for 2010. Since then, inflation has soared further. Iranian non-government sources put the actual figure at around 50 per cent.
The price of bread rose 40 per cent in June. While Western sanctions and rising world grain prices have contributed to the rising cost of food, the falling price of oil has hit Iran’s income, and a lower currency has made imports more expensive still.
The reason for intensified sanctions is that the bellicose fundamentalist Shi’ite Islamic Republic has refused to be candid on aspects of its nuclear program, most especially the extent to which it is covertly moving towards being nuclear-armed.
The mounting fear in the West is that, if Iran joined the nuclear club, the balance of power in the Middle East would swing sharply in Teheran’s favour, putting at risk oil supplies from the Persian Gulf, the stability of Sunni states such as Saudi Arabia, and the security of Israel.
This is something Washington and its regional allies ― especially Saudi Arabia and the Gulf States, not to mention Sunni and Muslim Brotherhood-controlled Egypt ― simply cannot tolerate.
There’s already talk in certain quarters that Saudi Arabia should simply buy from Pakistan an entire nuclear arsenal, in kit form, to counter-balance a nuclear-armed Iran.
Israel, on the other hand, would probably strike first if it was convinced that Iran had acquired nuclear weapons. Teheran already possesses what is seen as a formidable rocket force.
European governments ― from Warsaw to Prague to Paris and London ― fear that they’re approaching a precipice where nuclear-armed missiles are in the hands of Iran. The deteriorating situation across the strategically important Middle East is becoming increasingly ominous.
Many political leaders fear a “red line” is close to being crossed — if not within three years, then most certainly in five.
For the time being they have opted to impose sanctions in order to stultify the Iranian economy and thereby both retard and possibly thwart Tehran’s nuclear ambitions.
Some observers have claimed that Iran’s accelerating inflation cannot be wholly attributed to sanctions but rather to Tehran’s incompetent management of the economy which has put many hen farms out of business, thus creating a scarcity of poultry meat.
According to Ledeen, the cost of this traditional foodstuff has provoked growing anger across the country, and Iranians “are blaming their government for this state of affairs”.
That having been said, some government figures have not exactly made themselves popular by their response to this situation.
One of them, the prestigious Grand Ayatollah Makarem Shirazi, during a recent sermon in the holy city of Qom, almost paraphrased the line attributed to Marie Antoinette: “Let them eat cake”.
He scoffed at the public’s discontent, saying, “People should not be so persistent about some matters. For example, we see a lot of people ranting on about the soaring price of chicken. Now, so what if people don’t eat chicken?”
And to justify his lame defence, he added, “All doctors agree that eating meat products is bad for your health.”
This is unlikely to enhance the Grand Ayatollah’s standing since it is widely known that he is a super-wealthy business identity who controls Iran’s sugar imports, amongst many other essential commodities.
Commenting on Iran’s current economy woes, Ledeen says: “Worse still, the rising costs of feed grains ― corn and wheat have increased about 50 per cent as a result of drought, especially in the American Middle West ― have made it impossible for many Iranian producers to continue to raise and sell chickens.
“It is not unusual nowadays to see long lines in front of chicken merchants, and the Iranians, with a sense of humour reminiscent of the Soviet Union’s greatest hits, have now started talking about ‘chicken lines’, which divide the society between those who can both afford and obtain chickens, and those who cannot.”
Joseph Poprzeczny is a Perth-based historian and writer.