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.

Insight from Quilpué, Chile.

As the product of the Jackson School, which encourages its students to be “global citizens” and “critical thinkers” regarding issues on the world agenda, I have not been able to help but analyze my surroundings here in Chile with a corresponding mindset. Past academic courses touching on the familiar themes of economic growth, development, industrialization, protecting indigenous rights, among others, have all subtlety influenced the way I view my surroundings here in Chile. The main impetus to writing this piece was the desire to understand “development” from a variety of angles and viewpoints. Along these lines, by way of my current position teaching English in Chile, living with a host-family, casually conversing with people in my town regarding the quotidian matters impacting the lives of ordinary, every-day people, I have been afforded the unique opportunity to gain an on-the-ground perspective of development to contrast with my previous assumptions, the majority of which have been fostered through reading numerous articles and books on the subject.

A prime example that immediately comes to mind comes from earlier this year with one of the students in my ‘English Club’ elective. In preparation for the Chilean Ministry of Education’s English Opens Doors debate initiative we held informal discussions covering a wide range of topics. After posing a question to my kids regarding charities and foundations and their role in impactful change in places like Africa, the topic of discussion eventually steered into territory more relevant to my students: what does it mean to be a Third World, developing country? Taking the question a step further, I asked them about their thoughts on Chile, and whether or not they viewed it as a first world, industrialized country. One student quickly responded without hesitation; “I think Chile is definitely a Third World country.”  Amidst head-nods and what seemed to be resounding agreement from the others in the group, he proceeded to explain his rationale.

Frankly, I wasn’t sure how to react. After two years of solid immersion in all things ‘Global Development’ during the latter half of my university stint, I had come to not only associate the term ‘Third World’ with the abject poverty seen in the shanty-towns of Africa, India and Southeast Asia, but also as a term that had lost some of its relevance and could no longer be used to classify countries in the modern, post-Soviet era. Even more so, in preparation for my trip to South America, I had been quite adamant about doing my homework and reading the associated literature. Thus, after some pretty hefty research regarding Chile’s current and future economic prospects, its inclusion as the first Latin American country into the Anglo-Saxon-dominated OECD, as well as high rankings in terms of democracy, rule of law, and business-friendly infrastructure conducive to foreign direct investment, I was operating under the assumption that Chile had realized the elusive ‘pinnacle’ of development, one which is set out and perpetuated by an intricate system of lending and indebtedness between creditors such as the World Bank, Regional Development Banks, industrialized countries, and their debtor counterparts in the rest of the world (the majority of which lay south of the equator). However, after a few months in-country, my current viewpoints have deviated slightly from those I was harboring at the outset.

After stumbling upon this revelation, I began to view my surroundings differently. Starting with my own backyard – Quilpué – the town in which I’m currently living has plenty of industry, exemplified by a bustling city center and pockets of noticeable wealth in a few neighborhoods; yet, it also has more than its fair share of poorer, destitute sectors which comprise a sizable part of the outlying metro area. I’m now reminded of this on my walk home from work every day, where I pass El Retiro, one of the nicer, safer neighborhoods of the city lined with aesthetically-pleasing houses, manicured lawns, and expensive, foreign-manufactured cars in the driveways only to walk a half a kilometer further and see rows of rinky-dink shacks lined up near a small stream, bordering the countryside and number of abandoned warehouses.

Beyond the intra-city level, another aspect which has caught my interest is the relationship between Santiago, the sprawling, capital-city metropolis and the rest of the country. If one were to create a “Development 101” course, included in the curriculum would certainly be the relationship between a country’s administrative center, or its core, and the rest of the country, often referred to as the periphery. The idea is that as a country begins to develop its industry and advance its economic prosperity, inevitably certain demographics begin to benefit more than others, and a disparity in wealth and income distribution occurs. More often than not, pockets of wealth accumulate in the larger centers of industrialization and commerce, i.e. cities, while rural areas are generally omitted from this progress.

Now, I would be among the first to say that any economic progress, albeit only in certain areas, is better than absolute poverty all around. Especially with the proper political institutions in place, this new economic capacity could effectively be leveraged in order to redistribute wealth in a more equitable fashion. However, this theory usually remains a theory, and looks entirely different in operation. In the case of Chile, Santiago has become a bastion of finance and commerce, and accordingly, has become the gateway for foreign capital not only into Chile, but the whole of South America. Buoyed by copper exports, the Chilean economy has managed to utilize a surplus in its natural resource sector to diversify other sectors of its economy, most notably financial services and materials & processing. As such, the Chilean economy has a low level of unemployment and growth prospects that would make any European periphery country green with envy. However, the reality of the white-collar executive in Santiago is not necessarily the same as the fisherman in Coyhaique, and what may be beneficial for the former may not be for the latter.

This is where the oft-heard phrase in development literature comes into play: “Industrialization and its Discontents.”  Although I personally am of the belief that industrialization is a crucial element of economic growth, and that the entire doctrine of modern capitalism implies that there will be winners and losers in any case of even slight economic progress, as it is this competition between firms and companies that creates the foundation for growth, and maintains market efficiency. And, I firmly believe that it is the government’s role to manage and oversee the economy in a way that mitigates any possible negative externalities associated with the free-market capitalist model. The universal solution to this has been the creation of the modern welfare state: however, within the parameters of this essay, I’d like to focus on the protection of environmental and indigenous rights. In Chile, there is at present an overwhelming detachment between what is happening in Santiago and what is happening in the rest of the country, namely rural areas with special neglect of the Chilean South. Currently, Chile has seen a wave of protests with the slogan “Patagonia Sin Represas,” a movement which has materialized in order to challenge a motion to build a sprawling network of five hydroelectric power plants in one of the most ecologically, environmentally, and culturally significant places on earth. The HidroAysén project has been fully endorsed by the current administration led by President Sebastian Piñera, which helped to facilitate a joint-venture between Endesa, the Spanish-Italian energy conglomerate, and Colbún S.A, a Chilean utility company to secure the necessary investment and capital to finance the project. On one end, the project will supposedly help maintain Chile’s current rate of economic growth by providing the necessary energy infrastructure needed to support said growth; on the other hand, a number of studies point out that it will very likely displace thousands of nearby indigenous, fishing, and agricultural communities, as well as have dire consequences for the swath of Chilean Patagonia in which it is being constructed.

I will be the first to stand by the importance of a “pro-business” mindset in advancing the livelihood of a country and its citizens. I do maintain the belief that the concept of finance does in fact serve an invaluable role in allocating capital efficiently across market segments to provide support and enable firms and companies to grow and achieve larger scale.  However, the realm of finance often does not adequately take into account the real world outside equity markets, with a precedent that encourages managers to pick securities and shares which maximize returns for investor portfolios whether or not the returns come at the expense of a minority group or a nature reserve that exist outside this realm. As far as “socially-conscious investing” is concerned, a friend and past colleague of mine has summed up the idea quite aptly in his blog, where he states that in spite of an investor’s abstinence from buying shares in companies whose operations negatively impact the environment, the void will inevitably be filled by other investors in the market. This is due to the fact that “markets are typically very efficient, and unless everyone works together to withdraw financing from ‘unethical’ firms, those who don’t care will arbitrage their share price back up to where it was before socially conscious investors withdrew their capital.”

In addition, I politically consider myself as a left-leaning moderate, and before coming to this country, would never in a million years have thought myself to be falling on the socialist end of the political spectrum. Basically, the fact of the matter is that many Americans in the current day are a bit hesitant to refer to themselves as socialists.  However, I have noticed that the variation of the ideology that exists here, Socialism “a la Chilena,” along with the country’s current model for economic and social development is less about radical, Marxist-style income re-distribution utopianism, and more about a sort of moral and economic fairness.

To conclude, I would like to point out that on the whole, Chile has made great strides in overcoming a brutal dictatorship, adopting a pro-growth economic model and providing appropriate political institutions to support it. All of this can be noted in the country’s past three decades of positive growth in Real GDP and GDP-per capita, both of which have resulted in improved living standards for many Chileans and a robust middle-class which increasingly enjoys more influence in the country’s political agenda. However, despite these notable improvements, creating tangible solutions for extending the benefits of this growth to the country’s poor remains a large-scale issue. As a result, Chile must address its underlying political and social problems moving forward before we go ahead giving it our unrelenting praise.

~~~~~

Julian Fellerman graduated in the summer of 2011 with a degree in International Studies (Development Track). He has complemented his studies with internships at the U.S. Department of Commerce-Export Assistance Center and the Global Indexes Group at Russell Investments. While at Russell, he was part of a team that produced the Russell Indexes Country Guidebook, a semi-annual report which outlined the macroeconomic and investment landscape for developed and emerging countries in Russell’s indexes.

He is currently a volunteer with the Chilean Ministry of Education/UN Development Programme initiative, English Opens Doors, where he teaches primary and secondary-level English at Colegio Montesol, a semi-private school located in Quilpué, Chile. He wrote this piece for a blog he is keeping chronicling his experiences in the Southern Cone.

Insight from Karachi, Pakistan.

I have been back home in Karachi for more than a month now–Ramazan passed, Pakistan’s Independence Day passed, Eid-ul-Fitr came and went, the weather got hotter and wedding season began. The only thing that remains constant every time I step out of the house is the amount of people shopping. High end malls keep opening up, people are packed into the shopping centers and buying as if they will never get the chance to do so again. Prices have soared but shops seem to have gotten fuller. A new mall is under construction in the very spot that Mid East Hospital stood a few years ago. I knew it was coming (the hospital was sold back in 2005) but it is still an unpleasant shock to see the building converted and plastered with images of shops and restaurants “coming soon.” How can you tear down a fully functioning hospital, especially in a city where there are already not enough, to build a mall? This a question I keep repeating to myself but have no answer for.

The amount of beggars on the streets also soared during Ramazan. A leading English daily carried a few features on the topic, including “Beg, and you shall receive” wherein a beggar voices his preference for traveling by air (which he did) rather than by train to come to Karachi during Ramazan to beg. Begging is a full-fledged business in the country and Ramazan is a peak time for maximizing profit. People are meant to feel for the poor when they fast and experience hunger but these days the doling out of cash to beggars probably has more to do with the guilty conscience of the wealthy who are hauling around truckloads of shopping bags. The extreme social and economic disparity, the root cause of more than half the problems the country faces today, seems to just keep growing.

The economy has been suffering for far too long; exports keep suffering setbacks that have little to do with their quality or a decrease in demand and more to do with internal factors. Pakistani textiles are something to write home about and that includes jeans. Most people in Karachi know about a place called Zainab Market but not everyone is aware that, if you know where to go, you can get the best jeans at outrageously low prices here–jeans that are exported all over the world and sold for four or five times the price abroad. The shop owner complains though, that half the market for such exports has shifted to Bangladesh in the past few years. It takes me only a second to figure out why—the ridiculously long and frequent electricity cuts in the country are making it impossible to get any work done right.

Once known as the city of lights, these past few years Karachi has seen much more darkness than light. Both literally, with the constant electricity shortage (read mismanagement and corruption), and figuratively with the death, destruction and despair that has gripped the place. The resilient city still bustles with life though. People go about their daily lives; work, fun, ceremonies, hanging out–all goes on. In some areas of the city you might not even realize that things are any different than usual in Karachi until you see the various body counts in the news every single day. The situation is grim, quite grim, but on the ground reality is not as utterly awful as the news media would have you believe; normality still exists and happy moments are interspersed in all the madness. Karachi may not be the city of lights these days but it is still a city of bustling life, of people who face their fears and refuse to stop living. Here’s hoping for the lights to come back on.

~~~~~

Nabeeha Chaudhary is a second year M.A. student in the South Asian Studies department at the Jackson School. She grew up in Lahore and Karachi and studied at the University of Karachi for more than two years before transferring to Miami University where she completed her B.A. in English Literature. Her current research interests revolve around Media, Education, and Gender Disparities in South Asia with a focus on Pakistan.

This blog post was written while Nabeeha was in Karachi for part of summer 2012 to visit friends and family and to collect material for her M.A. project on the representation of women in Pakistani television serials.