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
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."