Iran faces severe shortages of medicines, with some prices rising sevenfold. This comes months after the government abolished the cheap dollar for raw material imports.
The healthcare crisis is just one aspect of the overall economic crisis, driven by a centralized and often mismanaged economy and US sanctions over the past few years.
Most medicines in Iran are produced locally by semi-government companies that import raw materials from other countries. When Iran’s currency began to lose value in early 2018, the government provided fixed exchange rates, mainly for essential goods such as food and medicine. But earlier this year, President Ebrahim Raisi’s new government scrapped what was actually a government subsidy. Now a food and drug producer has to buy dollars at seven times the rate he has to import raw materials, disrupting production.
Ali Fatemi, deputy chairman of the pharmaceutical company, told Aftab News in Tehran that situations like the current shortage would arise if the economic sector were controlled by the government and governed according to a “command economy”. said it was not surprising. He said the government would set unreasonably low prices and then stop subsidizing them, leaving companies with no choice but to procure raw materials and production.
To partially alleviate the shortage, the Iranian government has allowed medicines such as antibiotics and simple cough syrups to be imported from India, and as a result, instead of importing raw materials, the country could spend much more. I spend a lot of foreign currency.
Iranian pharmaceutical executive Ali Fatemi
Besides pharmaceuticals, the inflationary slump has hit other sectors, according to Tehran’s Faral website. Consumers lost purchasing power as prices rose by at least 40% for his second year in a row, driving demand down. This led to a “growers and factories domino effect” that forced them to shut down. This will increase unemployment and reduce consumer demand.
Iran’s currency has fallen more than 15% since early September when it became clear that a nuclear deal with the West was not a realistic expectation.
Since early 2018, when the US announced its intention to withdraw from the 2015 nuclear deal, known as the JCPOA, the Iranian rial has fallen tenfold from $35,000 to $350,000 on November 12. That year it imposed oil and banking sanctions that hurt Iran. This further devalued the rial and caused very high inflation, which, combined with the inefficiency of the government-controlled economy, pushed tens of millions of people into poverty.
Iranian economist Ethan Soltani told the website that while food prices have risen eightfold since 2018, wages have at most tripled.
“Inflation has been on the rise in recent years, so economists warned officials of an ‘inflationary recession’, but the government paid no heed,” Soltani explained.
Indeed, it was clear that they were aware of the dire situation, especially from the cautious statements made by many officials in the former Iranian government led by President Hassan Rouhani, but they were unable to control the country’s foreign policy. , caused crippling. U.S. sanctions.
But Iran’s 83-year-old anti-Western ruler Ali Khamenei has the final word on foreign policy and he alone will be allowed to sign a new nuclear deal that lifts the most harmful sanctions. I was able to.
Iran’s economic growth over the past decade has been zero, and Soltani compared Iran to its neighbor Turkey. On the one hand, we are significantly increasing our foreign currency earnings.”