• 19 September 2012
  • Posted By Dylan Zehr
  • 0 Comments
  • Iranian Youth, Sanctions

Sanctions contribute to rising unemployment in Iran

The negative effects of sanctions on average Iranians are growing clearer and clearer. The latest piece on the issue, from Reuters, highlights the fact that the unemployment rate is still rising throughout the Iranian economy.

At the beginning of the year, the Iran Census Centre statistics pointed to an urban unemployment rate of 12.5%. Among the young, the official rate was much higher, at 29.1%. These numbers, like the reported inflation rate, are judged by most experts to be far below the true figures. Abbas Vatanpour, a former Iranian representative at the International Labor Organization, thinks youth unemployment could be as high as 50 per cent, while Mehrdad Emadi, an Iranian-born economic adviser to the European Union, believes the headline unemployment figure is above 20 percent.

According to The Telegraph, “rising joblessness is being fuelled by Iran’s exclusion last March from the Swift banking system, preventing businessmen from carrying out international transactions.” In some cases, this measure has led to factory closure due to an inability to obtain components. In others, the costs of components have soared, driving up the final price to a point that consumer demand drops. These mechanisms have reduced production in the automotive sector by 30% in the past six months, a figure reported by Iranian media.

In raw numbers, “Iran-based economists and members of parliament critical of the government, estimate that 500,000-800,000 Iranians have lost their jobs in the past year.” In September 2011, former Minister of Labor Abdolreza Sheikholeslami declared that university graduates were 10 times more likely to be unemployed than those with less education.  Indeed, while these losses are hitting all job sectors, they are disproportionately punishing the educated sector and undermining the Iranian middle class “that has been at the center of the democracy movement.”

Posted By Dylan Zehr

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