ECONOMY

From celebrations to soaring prices: How Iranians fared under Rouhani

Shortly after Iran’s centrist president Hassan Rouhani was elected in 2013, the country’s football team qualified for the World Cup, a sign, many said, that the new leader had brought them good luck.

After eight years of worsening relations with the west under a bellicose Mahmoud Ahmadi-Nejad, many citizens believed Rouhani’s election signalled a return to normality. People danced in the streets as the new president vowed to “unlock” Iran’s problems. They hoped for improved relations between the theocratic state and the west.

In his first press conference as president, Rouhani said the election had “opened a new chapter, as if all [voters] shouted that their sufferings have come to an end.” He added: “Your government of prudence and hope will materialise its promise of saving the country’s economy, reviving ethics and establishing constructive interaction with the world.”

Now, as Rouhani prepares to step down after presidential elections on June 18, data show the now deeply unpopular leader has fallen short on many of his promises.

1. Debt racks up

Rouhani swept to power in 2013 promising to open talks with Washington and other global powers to lift economic sanctions. His efforts resulted in the historic nuclear accord in 2015, whereby restrictions were eased and, in return, Iran curbed its nuclear activity. Oil sales boomed. But when Donald Trump abandoned the deal in 2018, oil sales plunged again — and with it Iran’s income.

Since then, the government has sought to diversify non-oil exports and has increased corporate taxes, heaping pressure on struggling small businesses. The government has accelerated the privatisation of state-run companies. As a result, most Iranians have invested their savings in the stock market which, analysts say, carries a risk should the market collapse.

2. Economy in freefall

GDP fell after the US pulled out of the deal, destroying economic gains registered when the accord was first signed. Foreign investment plummeted. France’s Total, Peugeot and Renault were the first to enter Iran’s market after the nuclear deal and the first to leave when it fell apart. Then came the pandemic, further exacerbating economic woes.

Line chart of Gross domestic product, current prices at purchasing power parity (rebased) showing Iran's economy drops behind the rest of the region

Youth unemployment has remained high at an average of 22 per cent during Rouhani’s tenure. This army of young, jobless Iranians is described by analysts as a time bomb. In 2017, and again in 2019, young people from poorer backgrounds led riots which have been the biggest — and deadliest — economic protests in the Islamic republic’s history.

3. Logged on and tuned in

One of the biggest achievements of Rouhani’s government has been expansion of internet use. A country of nearly 85m people has almost 95m broadband internet subscribers — many people buy fixed and mobile deals — a 20-fold increase annually since he first took power. The number of sim cards in use has increased from 59.4m to 131m over the same period.

Line chart showing that as more Iranians gain access to the internet, tight controls remain by comparing online freedom scores with mobile phone and broadband subscriptions per 100 people

Extended access to the internet — even in the most deprived villages and towns — has fuelled a quiet revolution. Online businesses are growing and citizens across the country are tuned into what’s happening in cities such as Tehran. Social media is the biggest tool for Iranians to express discontent. While some hardliners talk about blocking access to social media, its popularity has made this a difficult stance.

4. Soaring prices . . . and crashing popularity

One of Rouhani’s early victories was to reduce inflation to a single-digit, at just under 7 per cent, the lowest rate for decades, in the wake of the nuclear deal. Its surge since 2018 — and Iranians say official figures vastly underestimate its true rise — led to a slump in Rouhani’s popularity.

Line chart of Annual change in consumer prices (%) showing Out of control: Iran's inflation rates surge once again

The president’s response — that people should be happy that goods were available at all during what he calls an economic war — only fanned public wrath, analysts say. It has made him perhaps the least popular president in the Islamic republic’s history.

5. Rial to the dollar

For many Iranians, one of the biggest psychological markers of their welfare is the currency rate. Not only does a weak rial contribute to inflation, but also puts foreign travel out of reach for many, contributing to a feeling of isolation.

Line chart of Rial per $ (000s) showing The rial's heavy depreciation since the US withdrew from the nuclear deal and imposed sanctions

After the US abandoned the nuclear agreement, the rial’s value sank. Iranians rushed to buy US dollars and euros. Unofficial estimates of foreign currencies stored in private homes are as high as $35bn.

6. Gold for a rainy day

With a fluctuating currency, more and more Iranians have been unable to afford gold coins traditionally kept at home for rainy day purchases such as buying houses and children’s education and marriages. Men often promise gold coins as dowries — but the collapse in the rial has meant that many are unable to deliver.

Grouped symbol chart showing the number of rials needed to buy a gold coin in 2014 and 2021

7. Pride is now a luxury

When Iranians want to signal how poor they are, they often say they would struggle to buy a Pride car, one of the cheapest domestically produced vehicles on sale in the Islamic republic. It has often provided a second — sometimes a third — income as people become taxi drivers, helped by the introduction of ride-hailing apps in Iran over the past decade. The fall of the rial, however, has led to a steep spike in the cost of a Pride, pushing the cost of a new car out of reach for many.

Line chart showing how the price of Iran’s cheapest domestically produced car, the Pride/Saipa 132, has surged since 2013

8. Women feel disillusioned

The female vote has long been crucial for reformist candidates and Rouhani was no exception. But he disappointed many by appointing only two women to his cabinet. Though women are now able to attend football matches involving foreign teams, few signs show meaningful improvement in women’s rights.

Small multiple charts showing how women’s rights have not improved under Rouhani’s rule in Iran by comparing Iran with the Middle East and North Africa

Many women are now disillusioned with politics. “I’m not going to vote in the election,” said Hamideh, a 38-year-old employee of a private company. “And will discourage all people around me, unlike previous times when I dragged my family into polling stations.”

Additional visual journalism by Ian Bott in London

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