Iran's Small Businessmen Losing Faith in Khatami

Published May 14th, 2000 - 02:00 GMT

Morteza has just about everything at his ladies' shoe shop in fashionable north Tehran, from calf-length leather boots to open-toe sandals to clunky black pumps for the no-nonsense woman. 

The only thing he doesn't have is customers. 

Day after day, the 34-year-old Tehrani mans the counter, watching his inventory gathering dust on the shelves and wondering if this will be the month he'll finally have to close his doors forever. 

"If only I could sell just a couple of thousand dollars' worth a month, I'd be okay," he says, his eyes flashing in anger. 

"Yet I don't even reach a third of that. You can't make any money in this country unless you're doing something illegal." 

Like many small shopkeepers, Morteza is becoming disillusioned with President Mohammad Khatami, who since taking office in 1997 has been able to do very little for an economy hobbling from bad to worse. 

Khatami's supporters say the president has been hampered by conservatives, particularly in the outgoing parliament which bitterly opposed his efforts to create a more liberal social and political climate. 

But political analyst Parham Taheri says that's not the case when it comes to the economy. 

"In fact the parliament passed almost every one of Khatami's economic initiatives," he says. "The real problem is that those initiatives don't add up to much of a plan. Khatami really hasn't accomplished much." 

The grim statistics bear him out: the department of social welfare said this week that unemployment has risen in the last four years from 9.1 percent to 16 percent, while unofficial figures put it at almost double that. 

It said nearly one-fifth of all Iranians are now living below the poverty line -- in other words, making less than an average of a dollar a day. 

Meanwhile Iranians have watched what savings they had disappear as the value of the rial has been ruthlessly eroded away, making even basic goods relatively expensive for many people despite state subsidies. 

The Iranian currency, which was 500 to the dollar in the mid-1980s, plummeted to 1,400 at the end of the war with Iraq in 1988 and is now at more than 8,500 on the free-trading black market. 

Or in more basic terms: the beautiful aquamarine 10,000-rial note that used to be the equivalent of 20 dollars is now worth just slightly more than a buck. 

"If we don't start planning now," deputy director of social welfare Mohammad Ali Talebi said, "a very bleak future awaits us." 

Khatami has put privatisation and greater foreign investment at the fore of his five-year economic plan, which was approved by parliament earlier this year. 

But many Iranians like 46-year-old Ahmad, who owns a small clothing shop, believe the president is too dependent on behind-the-scenes political support from the mostly conservative bazaaris, the big merchants who have traditionally ruled the nation's economic life. 

"It's the same handful of families that controls everything," Ahmad says. "That hasn't changed since Khatami was elected, and it won't change. He's too soft, too weak. It's the bazaaris who call the shots." 

Small merchants say the bazaaris, who oversee a complicated economic network that provides everything from pistachios to portable computers, are only protecting their own bigger interests. 

Khatami's plans to attract foreign investment, they say, will be blocked by the bazaaris, who could never afford a rapid influx of foreign investment that would destabilise their ancient network of economic alliances. 

"If the United States were ever to come in here, for example, then everybody would get a place at the table," says 33-year-old Hossein, who runs a tiny gift shop in a shopping gallery. 

"Everybody could make some money. But they will never let Khatami get away with that. They want to keep the economy for themselves." 

According to the social welfare department the gap between rich and poor is widening, leaving those at the bottom with little to spend and those at the top able to frequent stores offering the latest in Western goods. 

Meanwhile small businessmen like Morteza are feeling the squeeze -- and gradually losing their sympathy for Khatami, who comes up for re-election next year. 

"I'll never vote for him again," he says, waving his hands in frustration at the unsold shoes all around him. "He just hasn't got the power to do anything." -- TEHRAN (AFP)  


© 2000 Al Bawaba (

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