Under Tehran’s Surface Calm, 5 Years of War Have Taken a Toll

On the surface, things appear normal in Tehran. There are no sandbags, no air-raid shelter signs. Most shops are full, and streets are choked with cars. New construction is under way at many sites.

Except for scattered knots of soldiers and Revolutionary Guards in the streets, and vans from the Blood Transfusion Organization of Iran at major squares, there are no overt signs of the country being at war.

But under the surface, Iran has problems. Because of its five-year-old war with Iraq and a slumping oil market, Iran’s petroleum revenues are down sharply. Food is still rationed and shortages are common. Periodic power cuts hamper industrial production and, after largely disappearing in the early fervor of the revolution, bribery in public business has made a comeback.

Beset by Privation

The government-controlled press and radio reflect the bleak picture of a nation at war, and a people beset by war’s privations. News programs invariably lead with the dispatches from the battlefronts. Newspapers play war stories prominently on Page 1. And complaints pour into radio stations and newspapers about how the war-battered economy is bothering ordinary Iranians.

With the rationing of basic foodstuffs imposed as a result of the Iranian-Iraqi conflict, war impinges daily on the life of the average Iranian here.

Under the rationing system, each family is given two sets of coupons: city and neighborhood. The city coupons, issued by banks, cover rice, sugar and cooking oil. The neighborhood coupons, administered by mosques, cover perishables--meat, eggs, butter and milk.

No Shortage of Bread

Bread is available in unlimited supplies, with quarter-pound loaves costing only 12 cents under a system of government subsidies that, according to a parliamentary report, costs the government about $1 million a day.

For some items, rationing seems to ensure a steady supply; for others, it appears ineffective in controlling shortages.

For example, the supply of meat, imported from distant Australia and New Zealand, is erratic. Unless you rush to the shop as soon as the supplies arrive, you may find yourself without rationed meat for weeks.

Meat Rationed Monthly

“Even if you get your share, the problem with the rationed meat is that it is distributed only once a month,” a Tehran housewife explained. “Unless you have a freezer or a large refrigerator, a lot of it goes to waste.”

Rice supplies consist of home-grown and imported varieties. The market price of local rice varies with the season and the place, and the government’s aim in importing rice is to check steep price rises.

For pragmatic reasons, authorities allow free operation of black markets, where rice sells at two to three times the rationed price and sugar and cooking oil are 12 times as expensive.

Dual Pricing System

This dual pricing system, which exists largely in the urban areas, where half of the 42 million Iranians live, allows the affluent to avoid the cumbersome rationing system, and enables the government to concentrate on supplying basic necessities to those with lesser means.

While Iran has gotten some of its imports through oil barter arrangements, it needs foreign currency for the bulk of the food, industrial raw materials, machinery, spare parts and weapons it gets from abroad. The only way it has to get foreign currency is by selling oil, but the instability of the world oil market in recent months has played havoc with Iran’s budgets.

In the fiscal year that ended last March, Iran, according to government reports, earned $14.7 billion in oil revenue, well under the projected $21.1 billion. The government responded by slashing its spending by 40%. This, and periodic electrical power cuts caused by excessive demand that the country’s facilities could not meet, struck a blow at the economy. Industrial production during the second quarter of 1985 fell by 17% from the same period in 1984.

Last August, Iraq intensified its air attacks on the key oil terminal at Kharg Island in the Persian Gulf, from where Iran ships 85% of the oil it sells abroad, causing a substantial drop in Iran’s oil exports.

Oil Exports Increase

Although oil exports have picked up since then, and are now estimated by Iranian officials to be about 1.3 million to 1.6 million barrels a day, the oil income for the fiscal year ending in March is expected to be 15% under the budget’s estimate of $22.1 billion.

Prime Minister Hussein Moussavi’s government has to function within the financial framework drawn by the Majlis, Iran’s 270-member parliament, which has proven to be financially conservative. The Majlis has repeatedly told the administration to balance its budget and reduce the growth rate of money supply, and it expressly forbids the government to borrow money abroad.

Mohsen Noorbaksh, the 37-year-old governor of Bank Markazi, Iran’s central bank, said Iran had reduced its foreign loans from more than $10 billion before the 1979 revolution to about $1 billion today.

The U.S.-educated Noorbaksh said that during the 1984-85 fiscal year, Iran added $700 million to its foreign reserves, but he refused to say what the current total is.

$5 Billion in Reserves

According to the Paris-based Organization of European Cooperation and Development (OECD), Iran’s total foreign reserves amount to $5 billion, with about $3.5 billion of that in cash reserves. This is hardly enough to cover Iran’s annual foreign military purchases for its war with Iraq, according to Noorbaksh, who said that war and war-related items consume about a third of the current $45.7-billion national budget. This, and severe restrictions on consumer goods, have distorted the economy and fueled inflation.

Moussavi’s government says that by cutting spending and reducing money supply growth from 23% in 1981 to 6% in 1984, it halved the inflation rate from 21.2% to 10.5%.

According to official Iranian figures, inflation is now down to 3.4%, but this is widely disputed by diplomatic and financial observers. The OECD estimates the inflation rate at 30% to 35%.

People with fixed incomes--including the country’s 1.5 million civil servants--are feeling the pinch. They find the salary increase, pegged to the official figure for inflation, grossly inadequate to counter the real inflation rate.

High Cost of Living

Living expenses are high in Tehran. A middle-ranking bureaucrat with a take-home pay of $650 a month, spends $350 on rent for a modest, two-bedroom apartment, and many moonlight as taxi drivers or sales clerks.

Some have resumed taking bribes, a practice that had largely disappeared in the wake of the Islamic revolution. In a recent series of investigative articles, the semi-official Islamic Republic newspaper said that bribery has crept back into government offices most frequently visited by the public--including customs, the Commerce Ministry, city halls and justice administration.

State-run newspapers and radio urge readers and listeners to send in complaints--and many do. Among the topics that keep cropping up on the Complaints Slot, broadcast weekday mornings, are bribery, bureaucratic sloth, erratic distribution of rationed goods, sharp increases in prices and power cuts.

A sampling of the complaints phoned in to the newspaper Kayhan and published in its Dec. 16 edition include these:

“In many schools, certain students are given the task of searching all pupils before they are let into the building. This causes long lines outside schools, and much discomfort to students due to the cold weather. I suggest that this practice be discontinued.”

“Karaj, a city of 2.5 million, has only one public library, and it is only a small one.”

On the whole, however, the newspapers appear to play it safe--and, as a result, many readers say, they are boring--so boring that they have been losing circulation, and Moussavi was recently moved to criticize their timidity.

“Self-censorship exists in the press,” he stated. “There are many issues that need to be reflected in the media but are not.”

Criticism Is Risky

Editors and reporters, however, know from experience that being critical is a risky business. Last June, Sobh-e-Azadegan, a paper whose editorial board was headed by Labor Minister Abolghassem Sarhadizadeh, was shut down after a Justice Ministry investigation in response to complaints from some members of parliament and officials of the foreign and interior ministries. Moussavi protested, but in vain. A court ruled that the paper lacked a valid publishing license--a technical lapse.

Moussavi now urges the press to offer “mature criticism,” in the manner of members of Parliament. They have been following guidelines laid down by Ayatollah Hussein Ali Montazeri, the country’s second most powerful leader.

“You should point out the weaknesses of the government bluntly,” Montazeri has told Majlis members. “But criticism should be friendly, and you must respect the prestige of the person you are criticizing.”