Impressions of Iran’s Economic Woes, Tehran

By Shahed Ghoreishi, B.A. student.

Insight from Tehran, Iran.

In the news in the past months, scenes of currency riots in Iran have taken hold of international coverage. I visited Iran over the summer and was able to a limited degree witness some of the stress. In some regards, Iran’s economic woes are very real, as I would often hear complaints about skyrocketing food prices. In other regards, Iranians were doing better than when I last visited six years prior. Below, I have described what I had witnessed and a glimpse into the reality of Iranian life.

When I first stepped out of Iran’s newly built airport in the outskirts of Tehran, I noticed an unusual site: a long line of SUVs. Last time I was in Iran, SUVs were definitely around but a pretty rare sight. My uncle began to load our ridiculous load of luggage into the back of his Hyundai Sante Fé. Throughout my time there, my uncle would blast Persian music as the music video would play in the front dashboard of his car. He was not the only family member who purchased a Hyundai Sante Fé; I noticed them often around Tehran. I was told that Iran has a high import tax and I was unofficially quoted 160% of the retail value was the amount of the tariff. This makes purchasing of foreign cars very difficult and what makes a Hyundai, a relatively better priced brand in the United States, a significant purchase in Iran. When I travelled to North Tehran, a richer neighborhood, I saw a surprising number of Mercedes Benz, Lexus, and Porsche vehicles among others. Apparently, Porsche SUVs are a big hit with rich Iranian soccer players. With the risky driving in Iran, I am not sure how they could convince themselves to drive them in traffic.

Outside of the automobile world, high tech items were common. I saw many advanced Android cell phones and iPhones were a common sight. I was asked several times in Iran when the iPhone 5 was going to come out, and much like in the United States, my Windows Phone was looked at with suspicion, “isn’t the iPhone better?” to my personal amusement. Around Tehran, Samsung Galaxy S3 billboards were a very common sight. Also, high definition televisions made by the same brands here in the United States were very common as well. For example, one apartment I went into had a large high definition television with surround sound speakers, and their son had an Xbox 360 and a small high-definition television in his room. This was very similar to a how a typical house in the United States may be set up. Of course, many of the internet capabilities were limited but they got to enjoy the same games that I found at home, albeit copies.

Now, Iranians are obviously under a lot of financial pressure, but the impressions I got were greatly contrasting. I witnessed people complaining about the prices of common items, while the material wealth around them seemed to significantly approve since the last time I was there. I remember one Iranian telling me that “Iranians are tired” and frustrated with the economy. He even equated the poor driving culture to how Iranians are feeling. However, another Iranian I spoke to had a very different analysis. He told me Iranians are used to poor economic times: “we had 8 years of war, a decade of sanctions afterwards [in the 1990s], and now we have some more sanctions… so if chicken is more expensive tomorrow, we just pay more and go along.” Later he made a joke about what he saw as an overreaction by Americans to the 2008 financial crisis: “they are sensitive to it, so they try to inflict on us like we react and care the same… Americans are not used to hardship, we are.” Essentially, he described sanctions as inconsequential. Although one could easily make an argument about Iranians’ special resolve for hard times, it’s hardly inconsequential.

In Tehran, my father went in to exchange U.S. dollars for rials. In Iran, there is an official exchange rate set by the Government that is only used for essential goods; otherwise the dollar-rial exchange rate is set by the black market. The black market is much more commonly used and also more susceptible to fluctuations. At the first exchange location (black market), the dollar was going for 21,750 rials. My dad went down the street to check the price at another currency exchange to find the price set at 21,770 where he made his exchange. On his way back, the price at the initial location went up to 21,800 rials. One week later in Isfahan, my dad exchanged his dollars for 23,050 rials. While we were making that exchange a man walked in to ask for the price, where he exclaimed “it was just 22,000 down the street!” On our last day in Iran, I woke up to “the dollar exploded!” and was informed it became 27,000 rials (this was the day after the Isfahan price). I later found out it “exploded” to 25,000 rials, not 27,000. The 27,000 came from the exchange of $20 bills instead of $100 bills. Yes, in the black market exchange rate lower denominations are worth more (quick tip, if you plan on travelling to Iran soon, bring lots of $1 bills).

With a well-educated youth and influx of high-tech items and material wealth, Iran has lots of potential. There is a misconception in the West about Iran’s economic status as being much more backwards than it really is. Even this quarter in my nuclear non-proliferation class, a few people would compare North Korea and Iran’s economy in regards to sanctions. They are not even close. The youth in Iran and in the West may both be carrying the latest smartphones, but they experience them in completely different environments.


Shahed Ghoreishi is a International Studies major (International Political Economy track). Currently, he is representing University of Washington students as a Senator in the Associated Students of the University of Washington. Also, he is interning at Senator Maria Cantwell’s Seattle office.

Shahed was born and raised in Seattle’s eastside and is fluent in Persian. He was first inspired to study international relations when he visited Iran in 7th grade. Shahed will graduate in 2013 and hopes to continue his studies in International Studies.

Shahed was in Iran to see family and attend a cousin’s wedding. It was his first visit to Iran since he was 15 and he hoped to gain a more mature perspective on Iran, particularly in light of his education in the Jackson School. His visit also helped to perfect his formal Persian speaking skills.

Shahed posted previously about trust in the Islamic Republic.