The central bank of Iran announced this month that the inflation rate in August hit 27.6 percent, topping the former high rate of 26.1 percent recorded in July. Prices for staples like beans, meat, and rice have soared over the past year. Economists both inside and outside Iran have blamed government mismanagement for the spike in inflation. Adding to the difficulties for Iranians are the blackouts that are occurring because of a dearth of electrical power in this oil-rich country.
The announcement of August’s inflationary high followed a report on Iran released last month by the International Monetary Fund, the IMF. The IMF says that international sanctions are also contributing to Iran’s economic problems.
The U.N. has passed three rounds of economic sanctions against Iran over its refusal to comply with Security Council demands that it halt its uranium enrichment activities, activities that can be used to develop a nuclear weapon.
The Security Council is now considering further sanctions. The U.S. has imposed its own financial restrictions, limiting Iranian access to the international financial system. The IMF said in its report that “U.N. and U.S. sanctions against certain Iranian institutions have created difficulties for trade financing and payments, discouraged foreign investment, and adversely affected the profitability of the targeted financial institutions.”
President George W. Bush says the sanctions imposed on Iran are aimed at the government, not the Iranian people:
”As a matter of fact, we want the Iranian people to thrive. It’s in our interest that there be a hopeful society. It’s their government who has denied them their rightful place in the world.”
If the Iranian regime verifiably suspends its enrichment program, said President Bush, there is a better way forward. “The Iranian regime has made a choice so far,” said Mr. Bush, “and it’s a bad choice for the Iranian people. The Iranian people deserve better than being isolated from the world.”