By Parisa Hafezi and Tuqa Khalid
DUBAI (Reuters) – Iranians fear an even more painful squeeze on living costs after additional U.S. sanctions take effect on Monday, from businesses struggling to buy raw materials to the sick and elderly unable to afford life-saving medicines.
The United States will reapply curbs to the country’s vital petroleum and banking sectors on Monday in an effort to rein in its arch foe’s nuclear, missile and regional activities.
Iran’s clerical rulers have played down the U.S. move, but many ordinary Iranians appear apprehensive.
“All the prices are going higher every day … I cannot imagine what will happen after 13 Aban (Nov. 4). I am scared. I am worried. I am desperate,” said elementary school teacher Pejman Sarafnejad, 43, a father of three in Tehran.
“I cannot even buy rice to feed my children or pay my rent.”
The daily struggle to make ends meet has been getting harder for months: The economy was battered by the reimposition of a first raft of U.S. curbs in August after Washington’s pullout from a nuclear deal between Tehran and global powers in May.
Foreign businesses of all types, ranging from oil companies, trading houses to shipping, have stopped doing business with Iran for fear of incurring U.S. penalties.
A Tehran Grand bazaar grocery shop owner said: “I am very nervous because already there is shortage of some goods in the market and the rial has lost so much value.
“What will happen after the reimposition of new sanctions?”
Iran’s leadership says Tehran will not succumb to pressure to halt its missile programmes or to change its regional policy.
Yet while some Iranians back their leaders’ defiance, others are fearful that the economy, weakened by years of sanctions, mismanagement and corruption, may collapse when the U.S. puts more pressure on the world’s Number 3 crude exporter.
“Statements by government officials that … the sanctions (will) have no impact are political slogans,” said Washington-based lawyer Farhad Alavi, who focuses on U.S. trade regulation and sanctions.
“The fact is that these restrictions significantly increase transaction costs for Iranians.”
Since the reimposition of the first round of curbs in August, prices of bread, cooking oil and other staples have soared and the rial national currency has fallen sharply.
Rice, one of the staples of Iran’s diet, has more than tripled in price since last year because of the rial’s fall.
Ordinary Iranians fear cuts in Iran’s oil sales could be the ultimate hammer blow to the economy, since energy exports are still the country’s main source of earnings.
Iranian leaders hope sanctions waivers granted to eight buyers of Iranian crude, combined with rising oil prices, will compensate for a reduction oil export volumes.
But even without the new measures due on Monday, Iranian businessmen have been finding it harder to cope.
Some 70 percent of small factories, businesses and workshops have already started to shut down in the past months due to lack of raw materials and hard currency, according to Iranian media.
“I had to close my business. Those European companies that were racing to ink a deal with me last year, now refuse to return my calls,” said a businessman in Tehran, who declined to be named.
Mohammad Reza Sadoughi says ordinary people will bear the brunt of the sanctions, in terms of medicines for the sick such as cancer patients and food shortages and currency problems.
“My father has cancer, and with sanctions, the cancer-treatment medicine that his life depends on will only be available in the black market for a higher price,” said the 38-year-old government employee in the northern city of Sari.
The U.S. sanctions permits trade in humanitarian goods such as food and pharmaceuticals. Yet measures imposed on banks and trade restrictions will make life hard for Iranian patients.
“At the end of the day, it’s the Iranian people with their aspiration to lead a good life who are suffering due to lack of good sense from their own regime who are not ready to compromise with the world power (U.S.),” said Dubai-based Iranian businessman Aftab Hasan, CEO of Arya Insurance Brokerage.
However analysts say that economic grievances are unlikely to revive anti-government unrest such as the demonstrations in December that turned into anti-government rallies.
“I don’t care about politics. I don’t care who is responsible for our problems. I don’t want a regime change. I just want to live peacefully with my family in my country,” said housewife Fariba Shakouri, 51, in the central city of Yazd.
(Writing by Parisa Hafezi, Editing by William Maclean)