Tehran, Iran — Iran increasingly suffers economic limbo as the international community debates how to respond to Tehran's refusal to stop enriching uranium.
Although the U.N. Security Council remains deadlocked over its threat of sanctions, Iranian businessmen complain trade is already sluggish, investment opportunities have been lost and foreign capital has been withdrawn. They blame the nuclear crisis.
"The market is stagnant. Buyers can't pay for the material they've purchased, and their checks often bounce because of lack of funds," said Amir Jazayeri, an iron trader.
He said since President Mahmoud Ahmadinejad assumed power last August, his business has slowed from the time under Iran's previous moderate leader, Mohammad Khatami.
"It has gotten worse in the past two months," Jazayeri said.
Iran has been under U.S. sanctions since the 1979 Islamic revolution and the seizure of hostages at the U.S. Embassy in Tehran, but it did expand trade with other countries, diversify its economy and become self-reliant in many industries.
Tehran also is benefiting from the surge in oil prices. Oil revenues rose nearly 50 percent to $45 billion during the 12 months that ended March 20.
Still, the economy staggers under high unemployment, double digit inflation and interest rates of 25 percent to 30 percent on personal loans. Prices for key needs, including food, have risen recently by as much as 20 percent.
Iranian women buy traditional handmade frames in a bazaar in Isfahan some 400 kms (240 miles) south of Tehran, Iran, on Wednesday May 10, 2006.
Official statistics say unemployment is about 16 percent, but some analysts estimate it is above 30 percent. Many Iranians earn less than $3,000 a year, and outside studies say as many as 40 percent of the population lives in poverty.
The European Union sought to settle the nuclear dispute by offering economic help if Iran gave up uranium enrichment and agreed to international controls to ensure it does not build atomic weapons, but Iranian leaders rejected the offer.
Others say Iran already is paying a stiff penalty. And, said economist Bahman Arman, "If the U.N. Security Council imposes sanctions on Iran, we should expect greater economic recession."
He said Iranian companies are cutting back on investment and other spending.
"All businessmen are just holding down, waiting to see what will happen next," he said.
Ahmadinejad came to office promising to increase wages for the working class, boost retiree pensions and distribute Iran's oil wealth, but he has not delivered.
"He has failed to fulfill his promise of social justice," Arman said.
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