Registered: Sep 2008
07-03-12 10:02 AM
Iran won’t endure West's sanctions
Commentary: Hyperinflation will pit people against regime that caused it
Two Iranian admissions of the sanctions’ effectiveness, one from above, the other from below, emerged in recent days.
The first came last week in Moscow, when Mohammad Ali Emadi, an executive for National Iranian Oil Co., told reporters that Iranian oil output has dropped in the wake of the sanctions by “20% to 30%.” That translates to a daily loss of at least $37 million and possibly more than $50 million. This admission followed previous Iranian denials that the sanctions were having any effect.
The other admission rose from the Iranian bazaar, where, via social networks, shoppers recently declared a three-day boycott of bread and milk to protest soaring prices. As The Wall Street Journal reported last week, responses to the campaign have been palpable and people discussed them openly.
Lurking behind these two reports are deep structural problems. The first is energy’s disproportionate share of the Iranian economy, and the second is the failure of President Mahmoud Ahmedinejad’s price reform 18 months ago.