Iran ‘may consider rationing’ if economic strife worsens

Iran ‘may consider rationing’ if economic strife worsens
Reports of panicked Iranian consumers hoarding essential commodities have forced lawmakers to consider bringing in rationing.
By bne IntelliNews September 5, 2018

Iran may consider rationing food and other essential commodities if its economic situation markedly deteriorates even further, according to reports from ICANA, the news agency of the Iranian parliament.

With the country under a first-phase sanctions-led economic assault from the US, prices of foodstuffs have risen rapidly in recent weeks with people beginning to horde everything from rice and flour to other essential commodities in daily use. Officials are currently having to address complaints of nappy shortages. A second phase of sanctions, that target vital areas such as oil exports and banking, will be triggered on November 5.

On September 2, the parliament approved a “double-urgency” bill that calls on the Rouhani administration to import essential commodities and sell the items at subsidised prices at cooperatives and state-owned supermarkets.

MPs who tabled the motion earmarked essential items including rice, meat, bread and sugar as products that might be included on a rationing list.

Psychological effects
The government has attempted to avoid rationing due to the psychological effects it would have on the population at large, but the drastic measure is now reportedly being seen by officials as something that must be seriously considered if the economic situation significantly worsens.

Officials continue to tackle avoidable causes of product shortages such as administrative issues at customs and illegal profiteering that involves unscrupulous merchants holding goods back from the market to force up prices.

Rationing coupons were used during the Iran-Iraq War in the 1980s, when food and other essential goods became scarce on the Iranian market.

Rush for newsprint
All kinds of shortages have emerged in Iran as the US continues with its attempt at throttling the country’s economy to drive Tehran to the table for a renegotiation of the country’s role in Middle East affairs. In early August, it was reported that the Ministry of Industries, Mining and Trade had permitted the quick import of 20,000 tonnes of newsprint to address fears that a shortage might hinder the printing of newspapers, still very much relied upon by the powers that be in the theocratic republic to get out their message.

President Hassan Rouhani on August 28 answered a summons to appear  before MPs in parliament to defend his government against claims that it suffered from a lack of preparation in advance of the renewed sanctions campaign launched by Washington. Lawmakers have fired the economy and labour ministers, while Rouhani has replaced the central bank governor.

Some foreign economists believe annual inflation in Iran should by now be realistically measured as running at more than 200%, with the Iranian rial (IRR) having collapsed against hard currencies.

Another sign of the severe disruption to consumer life in Iran came on September 4 when Digikala, “Iran’s Amazon” in the making, said it was laying off 175 of its 2,400-plus-strong staff. In a letter addressed to staff, the company founders said Digikala faced havoc generated by the devaluation of the Iranian rial, the falling purchasing power of Iranians, supply chain problems, the drying up of imports, instability in planning and US sanctions.

With the US offering very few concessions in its targeting of Iran with heavy sanctions and the Iranian government placing an import ban on more than 1,300 goods deemed to be “luxury” in order to curb hard currency outflows, several imports popular with middle-class Iranians are now absent from the shelves.