The owner of Nader Ghazapazi, a local restaurant that serves factory
workers, said orders have decreased to 320 meals each day from 1,250
five months ago. A representative of a local trucking company said it
now has 15 trucks driving cargo to Tehran daily, compared with 40
before. All of the company's export business has stopped.
Across Iran, industries are facing similar problems. At the
Alborz industrial complex near the city of Qazvin, many factories are
searching for cost-saving measures. Some are closing an extra day each
week, cutting paid holidays and reducing the number of free meals and
snacks provided to workers.
The five major factories that produce the bulk of Iran's dairy
products wrote a joint letter to Mr. Khamenei, the country's supreme
leader, in October complaining that if the economy doesn't turn around
they would be out of business in months.
Iran's car industry, the region's largest with manufacturing
plants from Africa to Ukraine, posted 60% to 80% production declines
last year, leading to hundreds of thousands losing their jobs, according
to Iranian media reports. Many manufacturers of automobile spare parts
are working at 40% capacity because of a shortage of cash and a lack of
raw materials, according to a statement by one of the industry's union
leaders.
The financial crunch has also imperiled one of Iran's biggest
exports: its students. Some 90,000 Iranian college students abroad are
in limbo after the government cut the subsidized exchange rate it
allowed for students' tuition abroad. Many say they are abandoning their
studies and returning to Iran because their expenses have quadrupled in
the face of the rial devaluation. Yet they have few prospects back
home.
"It's demoralizing. I've invested two years to get a graduate
degree, and I can't afford to graduate now," said Ali, a student in Asia
in his last semester of M.B.A. studies.
The effectiveness of the sanction campaign has surprised some
of Washington's biggest skeptics. Just two years ago, Tehran's finances
were bolstered by high international energy prices and a flourishing
trade with Europe and East Asia. U.S. and European officials said a big
reason for the success in recent months of the sanctions campaign has
been the sharp increase over the past year in oil production by Iraq,
Libya and the U.S., as well as Saudi Arabia's willingness to make up
for any shortages in oil supply on international markets.
Iranian officials could respond with wartime measures such as
rationing gasoline and basic goods and heavily controlling exports and
imports. Iran's ministry of trade recently issued an import ban on a
list of 75 luxury goods, ranging from cars to chocolate, plus a ban on
exports of basic food items such as wheat.
The Central Bank also issued a new mandate to generate foreign
currency cash flow, demanding that all exporters return revenues from
sales abroad to Iran. "The merchants and business people are caught
between the clerics fight with the West, said one prominent merchant
with offices in Iran and Dubai. "We won't be able to survive."