Tehran, Iran – Iranians born in the 1980s have often considered themselves to be the “burned generation”, living in a period marked by the political and economic turbulence that followed Iran’s 1979 Islamic revolution.
The United States embassy hostage crisis, when Iranian activists in 1979 detained American diplomats and others for 444 days, set the tone for a decade ahead.
What followed in the 1980s was eight years of gruelling war with neighbouring Iraq, a cultural revolution undertaken by the nascent Islamic Republic, the executions of political prisoners, sanctions and economic uncertainty.
Bardia, a 23-year-old living with his parents in eastern Tehran, said many people his age feel they have it even worse than the 1980s generation, due to worsening sanctions creating an even more volatile job market and inflation.
“Becoming independent or forming a family, emigrating away, buying a home, a shop, a car or even a new phone is becoming more of a distant dream every day,” he told Al Jazeera, asking to remain anonymous due to security concerns.
Decades of woes
Decades of domestic mismanagement and corruption paired with external intervention have made life difficult for most of the about 90 million Iranians, even before the US and Israeli war on the country began on February 28.
Months of US bombing, intensified sanctions, and naval blockades have significantly worsened the situation this year, in addition to the January antigovernment protests and state-sanctioned restrictions on internet use by the population.
Last week, the government hiked petrol prices, which will likely have an inflationary effect, with a feeling that the situation will get worse before it gets better.
For people like Bardia, who works at a cafe in downtown Tehran while studying for a business administration degree, it is difficult just to get by.
Bardia’s pensioner father is working with online ride-hailing apps and using a 15-year-old low-quality Iranian car to make some money. His mother is a retired garment worker who makes intermittent earnings from sewing at home.
After accounting for government cash subsidies and food assistance, the family have about 800 million rials (about $350 at the current exchange rate) per month, while expenses are surging by the day.
“We buy meat maybe once every six to eight weeks,” Bardia said. They can no longer afford to eat out or get takeaway, buy new clothes or household appliances, and are hoping that their medical bill does not upend their household budget.
By late August, year-on-year inflation was at 89 percent, while food inflation stood at more than 127 percent compared with the same month last year, according to the latest figures released by the Statistical Center of Iran.
Iran’s national currency has also continued on a downward spiral, hitting a new all-time low of more than 1.37 million rials per US dollar in Tehran’s open market last week.
The rate slightly improved to about 1.31 million on Sunday, after Iranian media said an understanding with Oman over facilitating limited transit through the Strait of Hormuz might materialise before planned talks with regional states in Oman on Monday.
But Iran still insists that negotiations with the US will not happen until Tehran’s conditions for Hormuz, lifting the blockade, the sanctions and other demands are met. In the meantime, a maritime blockade has halted most Iranian oil exports, while US sanctions and regional tensions have blocked or hampered air, overland and rail routes, making life difficult for Iranians.
“I remember the day my dad bought a car with 10 million tomans [100 million rials – currently worth just $43]. I also remember the day my dad bought a piece of land with 10 million tomans. Today he came home with a little bit of meat and said it was 10 million tomans. I’m in shock; I’m just 24 and I’ve seen all of this!” one Iranian user wrote on X.
The number of Iranians posting videos online about the exorbitant amounts they paid for small quantities of food and other essentials has gone viral in recent weeks. But instead of complaining, they, likely ironically, claimed they were happy, because authorities might imprison or execute them if they protested.
Last week, a state television report said such videos were “a new project” of dissent by those wishing to overthrow the Islamic Republic by instigating “riots”.
‘Erosion of resilience’
After decades of pressure, the economy has shown immense resilience in the face of political upheaval, sanctions, currency fluctuations, and the deadliest COVID-19 pandemic of the Middle East. In less than a year, Iranians have lived through energy crises and two wars started by the US and Israel.
But Iran’s President Masoud Pezeshkian and several other Iranian leaders have repeatedly expressed a desire to end the current “no war, no peace” status quo as it begets uncertainty for all Iranians and derails the economy.
Economist and market analyst Behnam Samadi said that status quo has come at a cost, with political and economic uncertainty making it difficult for decision-makers – whether the government or families – to act decisively to make the situation better.
“Households focus on preserving their purchasing power rather than planning for the long term; businesses set aside more resources to manage risk and maintain existing operations rather than undertake new investment; and the government is compelled to devote more resources to social support, securing foreign currency and crisis management,” he told Al Jazeera.
Many are not asking whether Iran’s economy is about to collapse, but how long the current state of degradation can last and at what cost.
Households are gradually changing lifestyles and consumption patterns, limiting expenditure on leisure, education and even healthcare, while credit purchases or instalment plans are rapidly on the rise. Iranians are essentially transferring some of the present financial pressures to the future.
“Perhaps the most accurate description is that Iranian households are adapting, but this adaptation does not mean their standard of living is staying the same. A substantial part of Iran’s economic resilience is sustained through reduced consumption, lower savings and a decline in household welfare,” Samadi said.
“And this is precisely the point that requires attention: If this situation persists, what we call ‘resilience’ today may gradually turn into an ‘erosion of resilience’.”
