Friday , February 3 2023

Hundreds of Iranian companies stop production and leave thousands of workers


Reuters reported a US report on the impact of sanctions on the Iranian regime in response to US policy in the region.

According to the report, hundreds of companies ceased production and as a result thousands of workers were released.

Tamanush, an Iranian non-alcoholic beverage manufacturer, closed its production line for 16 years and denied dozens of workers who suffered from US sanctions, which led to high prices for imported raw materials.

"Our 45 employees are unemployed, men have a taxi, and women return home to take care of their homes," said Farzad Rashidi, chief executive officer of the company.

In a series of interviews with Reuters's company owners, hundreds of companies have ceased production and thousands of workers have been dismissed due to unfavorable business conditions due to US sanctions.

The Iranian currency has drastically diminished economic activity since US President Donald Trump abandoned nuclear facilities between Iran and world powers in May.

In August, he imposed sanctions on the purchase of US dollars, gold sales and motor vehicles. Iran's oil and banking sectors hit in November.

"Over the last few months, we have lost 5 billion riyas (official exchange rate of 120 thousand dollars), so the board of directors decided to stop all activities before the currency market remained unchanged," Rashidi said.

Iran has been hit by unrest, rising prices, and security forces in the wake of clashes between youths protesting this year. Because of the economic downturn as a result of sanctions, officials are awaiting excitement.

Iranian Labor Minister Ali Rabi said four days ago, when the parliament removed him in August because of insufficient work to protect the labor market from sanctions, he lost about one million jobs by the end of the year, as a direct result of US actions.

The unemployment rate reached 12.1 percent, and three million Iranians could not find jobs.

Parliament's report warned that high unemployment could threaten the stability of the Islamic Republic in September.

"If we consider that the economic situation in the country is the driving force of recent protests, inflation has hit 10 per cent and unemployment has dropped by 12 per cent, and we can not imagine the severity of reactions caused by the sharp rise in inflation and unemployment."

If the economic growth of Iran in the coming years is below 5%, the unemployment rate can reach 26%.

The IMF expects the Iranian economy to drop by 1.5 percent this year and 3.6 percent in 2019, as the oil revenue drops.

Manufacturers are struggling

Iranian Vice President Iskhak Jahangiri has warned that Iran will face two major risks of sanctions: unemployment and low purchasing power.

According to Jahangiri, "job creation should be a priority, constructive companies should be hit by sanctions."

But the owners of the companies could not continue to work with Reuters because of the government's sometimes controversial monetary policy, as well as fluctuations in the currency market, the rise in commodity prices, and the rise in interest rates on banks' loans.

Many of them have been unable to pay wages for several months or have been forced out of work by many workers.

One of the largest textile companies in Iran, Golwakaran Aras, said in an interview with Reuters that hundreds of workers would lose their jobs.

"In August, about 200 employees were dismissed, and the situation has deteriorated since then," said the director.

Executive Director of Takplast Noor, Ahmed Rosta, said that he hoped that drought in Iran would support a new plant for the production of plastic pipes used in agriculture.

"I'll wait a couple of months, but the situation still needs to be covered," says Robert Robert, "farmers who are the main consumers of our products can not access them."

Sanctions affected the Iranian auto industry after the sanctions lifted two years ago and signed major contracts with French and German companies.

The French carmaker stopped a joint venture in June to prevent US sanctions, and the German auto manufacturer Daimler refused to expand its operations.

More than 300 car retail companies have been forced to stop production, causing tens of thousands of jobs in the sector, member of the Iranian Association of Automobile Manufacturers Mazir Beglow said.

A representative of the Tire Producers Association accused the government of "modifying the monetary-credit policy over the past six months" and causing problems for the sector.

"Fortunately, the tire industry has slowed down, but our production growth has not been achieved," said Mustafa Tanakh, spokeswoman for Tehran's teleconference.

Unemployment among youth

Washington says Tehran's economic pressure is directed not to the Iranian people, but to the government in the region and to its agents. But unemployed are the biggest pests.

"The prices were so high that we lost a lot of customers," says Maryam, a public relations manager at the Food Import Company, which lost her job last month: "Finally, the manager has stopped working and has begun to lead us."

The company has suspended imports, and other employees worry that it will close after selling its stock.

Unemployment among young people is already 25 percent, with 60 percent (80 million) in the country under 30.

According to official data, unemployment rate among young graduates in some districts of the country exceeded 50%.

Armenia, 29, has a mechanical engineering degree, but after the rial devaluation, the sector lost its job in the construction sector when the sector was in crisis.

"Reuters agency in Rasht, north of Iran, said:" The real estate market has slowed, as the cost of the houses is cheaper, "he said.

A legal advisor to start-ups and computer companies believes that sanctions have influenced many companies based on an export-oriented model and hoping to expand in the region.

"Even the Iranian game companies have felt the pain of sanctions," he said, "the situation was very complicated, as most of the crew decided to stop developing their game and waited to see what was happening on the world market.

But Said Laylaz, an economist in Tehran, was optimistic: unemployment among the youth was the result of the Iranian people's government and state policy, and sanctions only added to the problem.

"Sanctions, blurring in the market are windy spiritual politics, and I'm starting to focus on the economy and the labor market, but I expect it to be balanced with market equity," Lilaz Reiter said in an interview.

"We will be defeated by these sanctions rounds, and we still have the same benefits," Lilaz said. Last month, Iran's president met Rohani as a group of economists to advise on economic policies.

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