Unease, anger in Tehran's Grand Bazaar, Iran's beating heart

Merchants display an old carpet in a shop at the Grand Bazaar in Tehran. (AP)
Updated 13 September 2018
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Unease, anger in Tehran's Grand Bazaar, Iran's beating heart

  • Strikes in bazaar serve as political bellwether
  • Shoppers worried about declining value of rial

TEHRAN: Just one shop among the thousands in Tehran's sprawling Grand Bazaar can offer a tableau of the darkening mood descending across Iran as American sanctions again take hold.
A salesman who wants to move to Europe for a better life shows off his pots and pans to a mother now struggling to pay for the gifts she wanted before her daughter's marriage amid the collapse of Iran's rial currency. Another salesman loudly blames internal politics and corruption for the country's woes. Muttered curses and even shouts against the government follow the journalists talking to them.
While only a small moment in a nation of 80 million people, it shows the dangers ahead for the government of the relatively moderate President Hassan Rouhani. His signature nuclear deal with world powers now has become a noose around his neck that hard-liners gleefully tighten. Meanwhile, the sporadic and leaderless protests the nation has seen over its worsening economy threaten to roar back to life at any time.
That has many expecting the worst is yet to come.
"It has become more difficult, but we need to lower our expectations," said Kiana Ismaili, 26, shopping ahead of her wedding.
For centuries, Iran's bazaar has been the beating heart of both its economic and political life. While some now go to the Western-style mega-malls of Tehran's tony northern suburbs, the Grand Bazaar's narrow alleys, cramped stalls and wandering musicians still draw crowds of thousands.
Strikes in Iran's bazaar also have served as political bellwethers.
Bazaar families opposed the Iranian Shah Mohammad Reza Pahlavi and supported the 1979 Islamic Revolution that saw him replaced by the Shiite theocracy and elected officials. More recently in June, protesters swarmed Tehran's Grand Bazaar and forced shopkeepers to close their stalls, apparently in anger over the rial dropping to 90,000 to the U.S. dollar on the black market despite government attempts to control the currency rate.
The rial in the meantime has dropped as much as 150,000 to $1 with many anticipating further drops as the U.S. restores punishing sanctions on Iran's crucial oil industry in early November. The Trump administration denies it is seeking to overthrow Iran's government through the economic pressure, though Iranian officials say the link between the two is clear.
Fear over the economy has brought many to the Grand Bazaar in recent days to buy what they can before their savings further dwindle away.
"People are buying more because they think they won't be able to buy stuff with current prices anymore. They are worried about price fluctuations," said Omid Farhadi, a 25-year-old sales clerk at the kitchenware shop Zomorrod, or "Emerald" in Farsi.
"You have no price stability in this country. You go to bed and overnight a car that was worth 100 million rials is now worth 140 million."
As shoppers looked over his pots and pans, Farhadi said he hoped to immigrate soon to the Netherlands. He said other young Iranians with the financial means want to leave the country as well, while those without, longingly look at life in Europe.
Farhadi largely blamed Iran's poor relations with the rest of the world for the faltering economy.
That's spearheaded by President Donald Trump's decision to pull America out of the 2015 Iran nuclear deal, which saw Iran agree to limit its enrichment of uranium in exchange for the lifting of economic sanctions. While the United Nations repeatedly has said Iran complies with the accord, Trump said he wanted a stricter deal that also constrained Iran's ballistic missile program and its foreign policy while permanently limiting its atomic program.
While Iranians remain angry at Trump over adding them to his travel ban and pulling out of the deal, many feel even angrier at their own government. That's due to a steady stream of corruption cases and allegations of mismanagement by officials.
Farhadi's colleague at the shop made a point to tell visiting Associated Press journalists he believed Iran's main problem lay with Rouhani's administration. The government's management of Iran's economy, already hobbled by high unemployment, growing inflation and debt-laden banks, also faces widespread criticsm.
"Ninety percent of our problems are because of the infighting," said salesman Alireza Alihosseini. "I don't know why but the government and the supreme leader have differences. Only 10 to 5 percent is because of America."
The mother of Ismaili, the young woman shopping ahead of her wedding, then came up and asked to talk as well. She spoke carefully about how Iran has faced sanctions and international pressure in the nearly 40 years since the 1979 Islamic Revolution, calling the recent pressure nothing new.
Men listening to her speak then started muttering, some cursing her loudly for her comments. A man in the market, who requested anonymity for fear of reprisals for his criticism of the government, put his blame squarely on those in charge of the country.
"For someone like me, a young man, if I'm hungry and I don't have a job I'll turn into a thief. I'll turn into a vampire," he warned.
Elsewhere in the market, some even defended Trump, like Mahdirashid Mohammadzadeh, whose small stall in the jewelry section of the bazaar has seen customers eagerly buying gold as a hedge against the falling rial.
"Once we made peace with Obama, we were never so cheap," he said.
Asked what caused the economic woes, Mohammadzadeh blamed Iran's costly foreign intervention in Syria.
"This is the people's money," he said. "We have done nothing wrong to deserve this, but they are sending all our money to Syria."


Oil Updates – crude heads for weekly loss as Chinese demand continues to underperform

Updated 15 November 2024
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Oil Updates – crude heads for weekly loss as Chinese demand continues to underperform

SINGAPORE: Oil prices fell on Friday on signs demand in China, the world’s biggest crude importer, continues to underperform amid its uneven economic recovery.

Brent crude futures were down 65 cents, or 0.9 percent, at $71.91 a barrel by 7:50 a.m. Saudi time. US West Texas Intermediate crude futures were down 62 cents, or 0.9 percent, at $68.08.

For the week, Brent is set to fall 2.7 percent while WTI is set to decline 3.3 percent.

“While oil prices have somewhat stabilized around the $71.00 level of support this week, the lack of a concrete bullish catalyst suggests that price recovery remains tepid for now,” Yeap Jun Rong, market strategist at IG, said in an email.

The prospect of higher supplies from the US and OPEC+ along with doubts over China’s economic recovery continue to be of concern, while the odds of a December rate cut are now “closer to a coin flip” under a less dovish Federal Reserve, Yeap added.

China’s oil refiners in October processed 4.6 percent less crude than a year earlier, falling year-on-year for a seventh month, amid the closures of some plants and reduced operating rates at smaller independent refiners, data from the National Bureau of Statistics showed on Friday.

The decline in run rates occurred as China’s factory output growth slowed last month and demand woes in its property sector showed few signs of abating even though consumer spending increased, government data showed.

Oil prices also fell this week as major forecasters indicated market fundamentals remained bearish.

The International Energy Agency forecast global oil supply will exceed demand in 2025 even if cuts remain in place from OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies such as Russia, as rising production from the US and other outside producers outpaces sluggish demand.

The Paris-based agency raised its 2024 demand growth forecast by 60,000 barrels per day to 920,000 bpd, and left its 2025 oil demand growth forecast little changed at 990,000 bpd.

OPEC this week cut its forecast for global oil demand growth for this year and 2025, highlighting weakness in China, India and other regions, marking the producer group’s fourth-consecutive downward revision to its 2024 outlook.

US crude inventories last week rose by 2.1 million barrels, the Energy Information Administration said on Thursday, much more than analysts’ expectations for a 750,000-barrel rise.

Gasoline stocks fell by 4.4 million barrels last week to the lowest since November 2022, the EIA said, compared with analysts’ expectations in a Reuters poll for a 600,000-barrel build.

​Distillate stockpiles, which include diesel and heating oil, also fell unexpectedly by 1.4 million barrels, the data showed.


Fortune Global Forum to be held in Riyadh in 2025

Updated 15 November 2024
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Fortune Global Forum to be held in Riyadh in 2025

RIYADH: American football legend Tom Brady tossed a football to Saudi Arabia's General Secretariat of Council of Ministers Fahd bin Abdulmohsan Al-Rasheed who announced that the 2025 Fortune Global Forum will be held in Riyadh.

The elite of the world's business leaders will converge on Riyadh next year as the Fortune Global Forum makes its inaugural appearance at the Saudi capital.

Al-Rasheed joked that if he fumbled the ball, it was Brady's fault and if he caught it he is “a great player.”

 

The event, organized by Fortune magazine, is attended by presidents, chairmen and CEOs, as well as prestigious economists.

Fahd bin Abdulmohsan Al-Rasheed, chairman of the Saudi Convention and Exhibitions General Authority, said for the past 30 years the forum had brought together “the titans of industry around the world to the forefront of economic development.”

Speaking at this year’s forum, which concluded in New York on Tuesday, he added: “And that forefront today is the Kingdom of Saudi Arabia.”

He urged delegates to visit the Kingdom’s business epicenter to see what it had to offer.


Saudi Arabia launches company to transform Asir into global tourism hub

Updated 14 November 2024
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Saudi Arabia launches company to transform Asir into global tourism hub

RIYADH: Saudi Arabia’s Asir region has launched a new tourism venture through a partnership with the aim of creating a holding company to transform the area into a global tourist destination.

The collaboration between Aseer Investment Co., a subsidiary of the Public Investment Fund, and Rikaz Real Estate, aligns with the goal of transforming Asir into a world-class tourist destination that combines authentic heritage with sustainable development, according to the Saudi Press Agency.

The holding company seeks to contribute to enhancing a tourism environment that enriches guests’ experiences with unique offerings, connecting visitors to local culture and community traditions, SPA reported.

It is also committed to promoting sustainable tourism by protecting the environment, developing local communities, and collaborating with artisans and local businesses to preserve the authenticity of Asir’s heritage.

In October, the Kingdom’s Abha city secured a new investment partnership to boost tourism by developing culturally rich dining and retail experiences. 

PIF firm Aseer Investment Co. signed the deal with Nimr Real Estate and the National Co. for Tourism, or Syahya, to propel the project, the Saudi Press Agency reported. 

This aligns with the objectives of developing Abha, which will offer a range of benefits, including retail stores that reflect the cultural heritage of the Asir region.

The partnership also seeks to be a model for multiple collaborations with private sector investors and create more regional job opportunities.

Investments in the region are expected to create between 14,000 and 18,000 job prospects and contribute to up to 6 percent of the non-oil gross domestic product within 10 years, as outlined by AIC Chief Executive Osama Al-Othman in February.

Saudi Arabia emerged as a leader in tourism growth among G20 nations, experiencing a 73 percent increase in international visitors in the first seven months of 2024 compared to 2019.

According to the UN World Tourism Barometer report in September, the Kingdom welcomed 17.5 million international tourists during this timeframe, showcasing its growing allure as a global travel destination.

This surge is part of the nation’s Vision 2030 initiative, which aims to diversify the economy and reduce dependence on oil revenues.

“Saudi Arabia cements its global leadership and takes the first spot among G20 countries in international tourist arrivals growth, with a 73 percent increase in the first seven months of 2024 compared to the same period in 2019,” stated the Saudi Tourism Ministry on X.

Under the National Tourism Strategy, the Kingdom aims to attract 150 million visitors by 2030 and increase the sector’s contribution to the nation’s gross domestic product from 6 percent to 10 percent.

These goals reflect the country’s commitment to strengthening its tourism sector and enhancing its global appeal.


IMF, Saudi Arabia announce new annual conference tackling global economic challenges

Updated 14 November 2024
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IMF, Saudi Arabia announce new annual conference tackling global economic challenges

RIYADH: The International Monetary Fund and Saudi Arabia will jointly organize a high-level annual conference in AlUla to discuss global economic challenges, it has been announced.

The AlUla Conference for Emerging Market Economies will bring together a select group of finance ministers, central bank governors, and policymakers, along with leaders from the public and private sectors, representatives from international institutions, and members of academia.

According to a joint statement by Kristalina Georgieva, managing director of IMF and the Minister of Finance Mohammed Al-Jadaan, the first edition of this series will be held from Feb. 16-17, 2025.

“The world is confronting deeper and more frequent shocks, including from conflicts, geoeconomic fragmentation, pandemics, climate change, food insecurity, and the digital divide,” according to the statement.

They continued: “If not addressed adequately, these shocks put at risk emerging market economies’ hard-won improvements in living standards. Such setbacks would affect large segments of the world population and put at risk global growth and macro-financial stability.”

The gathering will offer a platform to exchange views on domestic, regional, and global economic developments and discuss policies and reforms to spur inclusive prosperity and build resilience supported by international cooperation.

Recent economic issues affecting the global landscape include rising inflation rates, driven by supply chain disruptions and increased demand for goods post-pandemic.

Supply chain delays continue to impact the availability of essential products, causing bottlenecks in manufacturing and increasing costs.

Additionally, geopolitical conflicts, such as the war in Gaza, have disrupted energy supplies and food exports, leading to global food insecurity and fuel price volatility.

Concerns over the using the Red Sea shipping lane increased dramatically at the end of 2023, when Houthi militants stepped up attacks on vessels in the wake of the escalation of the Israel-Hamas conflict.

The effects of these challenges pose significant risks to economic stability, especially for emerging markets that are more vulnerable to such global shocks.

The AlUla conference is the latest example of the growing relationship between Saudi Arabia and the IMF, with the organization in April establishing its first office in the Middle East and North Africa region in Riyadh.

The facility was launched during the Joint Regional Conference on Industrial Policy for Diversification, jointly organized by the IMF and the Ministry of Finance, on April 24.

The new office aims to strengthen capacity building, regional surveillance, and outreach to foster stability, growth, and integration, thereby promoting partnerships in the Middle East and beyond, according to the Saudi Press Agency.

The work hub will promote closer collaboration between the IMF and regional institutions, governments, and other stakeholders, according to the SPA report.

The IMF also expressed its gratitude to the Kingdom for its financial contribution aimed at supporting capacity development in member countries, including fragile states.


Closing Bell: Saudi Arabia’s TASI ends in the red, trading volume hits $2.95bn

Updated 14 November 2024
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Closing Bell: Saudi Arabia’s TASI ends in the red, trading volume hits $2.95bn

RIYADH: The Tadawul All Share Index concluded the last session of the week at 11,791.18 points, down by 139.27 points or 1.17 percent.

The MSCI Tadawul 30 Index also saw a decline, dropping 19.18 points to close at 1,481.36, reflecting a 1.28 percent loss. In contrast, the parallel market Nomu finished Thursday’s trading at 29,467.71 points, up 262.18 points or 0.90 percent.

TASI reported a trading volume of SR11.10 billion ($2.95 billion), with 51 stocks advancing and 182 declining. The top performer of the day was Saudi Cable Co., which saw its share price surge by 5.10 percent to SR92.70.

Other strong performers included Shatirah House Restaurant Co., which gained 3.75 percent to reach SR21, and Arabian Mills for Food Products Co., which rose by 3.08 percent to SR53.60. Naseej International Trading Co. and Saudi Real Estate Co. also posted notable gains.

The worst performer was Saudi Real Estate Co., which dropped 4.94 percent to close at SR10. Alkhaleej Training and Education Co. and Red Sea International Co. also suffered significant losses, with their share prices falling by 4.90 percent to SR29.10 and 4.84 percent to SR68.80, respectively. Astra Industrial Group and Al-Omran Industrial Trading Co. were also among the day’s largest decliners.

On the parallel market, Nomu, Alqemam for Computer Systems Co. was the top gainer, rising by 9.57 percent to SR103. Other gainers included Dar Almarkabah for Renting Cars Co., which climbed 9.10 percent to SR42.55, and Horizon Educational Co., which rose by 7.58 percent to SR79.50. Mulkia Investment Co. and Knowledge Tower Trading Co. also saw significant increases.

On the losing side of Nomu, WSM for Information Technology Co. recorded the largest drop, with its share price falling by 6.18 percent to SR44. Osool and Bakheet Investment Co. and Natural Gas Distribution Co. also experienced notable declines, with their shares dropping by 5.37 percent to SR37.85 and 5 percent to SR57, respectively.