A 35-year-old worker dismissed from one of Iran’s petrochemical companies in Mahshahr attempted suicide outside the Mahshahr Labor Department after losing his job, according to the Iranian Labour News Agency. He had been laid off with 19 other employees because of wartime conditions, and he tried to take his life on Tuesday after the Labor Department failed to respond to his requests. That’s the human cost behind the speeches, the sanctions talk, and the usual state theater.
The State’s Winners and Losers
Less than a week before the attempt, Supreme National Security Council head Mohsen Rezaei boasted that the Islamic Republic had made billions of dollars despite sanctions and the blockade of the Strait of Hormuz. The contrast was brutal. While the security elite counted money and power, a dismissed worker stood outside a labor office with nowhere to go. Meir Litvak, a professor in the Department of Middle Eastern History and a senior research associate at the Alliance Center for Iranian Studies at Tel Aviv University, described a widening divide between the “military men” controlling the country and Iranian civilians.
“The IRGC guards are protected. They live in their own semi-economy. I’m not sure how aware they are of the suffering of the people, and even if they are aware, how much they care about it,” Litvak said. He added, “This means that when they face a dilemma between allocating resources to economic recovery or military buildup, they prefer military buildup.” The line is tidy enough for a seminar. On the ground, it means one class of armed managers keeps its insulation while everyone else eats the bill.
Iranian Parliamentary Speaker Mohammad Bagher Ghalibaf, a member of the Supreme National Security Council involved in negotiations, drew heated criticism on Thursday after speaking at the Iranian Embassy in Baghdad about conditions in Iran. “No matter how much military power we have, if people are hungry and we do not have financial circulation and economic growth, we will not endure,” he said. Iranian media figures condemned the comments as a sign of weakness. The state’s own people keep saying the quiet part out loud, then getting scolded for it.
Inflation, Shortages, and the Managed Crisis
The pressure on ordinary Iranians shows up in the price of food. Food inflation rose by 128% in the month of Tir in the Iranian calendar, from June 21 to July 20, compared with the same period last year, according to the Statistical Center of Iran. Beef, lamb and chicken prices were around 149% higher in July than a year earlier, while dairy prices rose by 147%. That’s not a temporary inconvenience. That’s a daily squeeze.
Iran International has frequently reported that Iranians are struggling to afford groceries, medicine and other necessities. Litvak said the blockade on Iran’s oil exports had affected people in several ways, first through the collapse of the Iranian currency. “In 2018, the rial was at around 200,000 rials to the dollar. Now we’re talking about 1.9 million rials to the dollar, which means that many commodities imported into Iran are much more expensive than ever before,” he said. “This also means that inflation is going up.”
The government has pushed back against claims that Iran has entered hyperinflation. Abdolnasser Hemmati, governor of the Central Bank of Iran, denied on Wednesday during a special broadcast that the country had entered hyperinflation, arguing that the monetary crisis remained under control. His remarks came after Farshad Momeni, a professor of economics at Allameh Tabataba’i University in Tehran, told KhabarOnline that Iran had already entered hyperinflation. The officials argue over labels while the prices keep climbing.
Asked why Iranian officials were painting such a vastly different picture of the country’s economic situation, Litvak said, “Dictatorships never tell the truth. Dictatorships cannot admit difficulties. If there are difficulties, they are always blamed on outsiders, on enemies, on agents, and they always tell the people that the situation is better.”
Reconstruction, Decline, and the Cost of Rule
Litvak noted that even if annual inflation stood at 60%, well below numerous estimates, Iranians were already suffering economic conditions so severe that some had resorted to extreme measures, including selling their organs, even before the war. He said Iran’s status as a major oil producer would provide little relief from its gasoline shortage, which would continue to push up prices for commodities transported across the country. Iran International reported on Sunday that Golestan, Mazandaran and North Khorasan would experience gas cuts lasting between 60 and 90 days. Discussions have also been underway for some time over raising the cost of subsidized gas.
With power cuts and water shortages adding to the economic pressure, Litvak said “life is very difficult for the ordinary Iranian” and would only become more difficult under the current circumstances. These financial difficulties have already affected Iranian society, he said, noting that the average age of marriage is rising, while divorce rates are increasing and fertility is falling. Over 45% of married couples in Tehran divorce within five years of marriage, he said, claiming that financial stress is a major factor behind many of these separations.
Both Ayatollah Ali Khamenei and his son, Ayatollah Mojtaba Khamenei, have pushed for a baby boom in Iran. Alireza Raisi, the Health Ministry’s deputy for public health, warned in May that Iran’s fertility rate had fallen to 1.35 children per woman, well below the global average of 2.2 children per woman in 2024. The rulers want more births. The economy keeps producing fewer reasons to have them.
Even before years of regional conflict, many social welfare measures aimed at reversing the trend had failed to be implemented. Iranian MP Fatemeh Mohammadbeigi, deputy chair of the parliament’s Health Committee, said in May that Iran had fulfilled just 15% of the commitments outlined in the Family Support and Youthful Population Law, passed in 2021. That was before Tehran was saddled with the enormous cost of reconstruction following multiple wars.
Majid Judi, Deputy for Reconstruction and Rural Housing at the Housing Foundation, told the state-run IRNA news agency on Wednesday that damage to homes, commercial properties and essential civilian belongings outside Tehran exceeded 370 trillion rials ($247 million). He said the foundation had opened more than 140,000 damage-assessment files, including around 110,000 concerning homes and commercial properties and 35,000 concerning household belongings and essential possessions.
The Tehran Municipality separately said that the two wars had damaged around 51,000 housing units and more than 10,000 vehicles. Tehran has provided around 65 trillion rials, approximately $43.5 million, covering an estimated 18% of the damage documented by the Housing Foundation, which excluded damage in Tehran as well as damage to infrastructure and strategic facilities. The paperwork is thick. The repair bill is bigger. The people still have to live inside it.