Trump-approved economic sanctions against Iran hurt average Iranians

/ CBS/AP

New U.S. sanctions target Iran's leader

Tehran, Iran — Tensions between the United States and Iran have reached their highest levels in decades after Donald Trump nearly called for a military strike against Iran last week. On Monday, the president signed off on new sanctions against the country. As the U.S. piles sanction after sanction on Iran, it's the average person who feels it the most.

From a subway performer's battered leather hat devoid of tips, to a bride-to-be's empty purse, the lack of cash from the economic pressure facing Iran's 80 million people can be seen everywhere. Many blame President Trump and his maximalist policy on Iran, which has seen him pull out of Tehran's 2015 nuclear deal with world powers and levy punishing U.S. sanctions on the country.

In recent weeks, Iran has threatened to break out of the deal unless European powers mitigate what it calls Trump's "economic warfare." Iran also appeared ready to push back against the buildup of U.S. forces in the region, after shooting down an American drone it says violated its airspace last week.

On the eve of renewed sanctions by Washington, Iranian protesters demonsrtate outside the former U.S. Embassy, marking the anniversary of its storming by student protesters that triggered a hostage crisis in 1979 on November 4, 2018 in Tehran, Iran. Getty

In response, U.S. officials have vowed to pile on more sanctions. The Pentagon conducted a cyberattack on computer systems in Iran that control rocket and missile launches, sources familiar with the matter confirmed to CBS News. President Trump reportedly approved the cyberattack.

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But alongside Trump, many Iranians blame their own government, which has careened from one economic disaster to another since its Islamic Revolution 40 years ago. In 1979, Grand Ayatollah Ruhollah Khomeini replaced the U.S. backed Monarchy of Mohammed Reza Shah after Iran voted by national referendum to become an Islamic Republic with Khomeini as "Supreme Leader."

"The economic war is a reality and people are under extreme pressure," said Shiva Keshavarz, a 22-year-old accountant soon to be married. She said government leaders "keep telling us to be strong and endure the pressures, but we can already hear the sound of our bones breaking."

Walking by any money exchange shop is a dramatic reminder of the hardships most people are facing. At the time of the nuclear deal, Iran's currency traded at 32,000 rials to $1. Today, the numbers listed in exchange shop windows have skyrocketed — it costs over 130,000 rials for one U.S. dollar.

Inflation is over 37 percent, according to government statistics. More than 3 million people, or 12 percent of working-age citizens, are unemployed. That rate doubles for educated youth. Depreciation and inflation make everything more expensive — from fruits and vegetables to tires and oil, all the way to the big-ticket items, like mobile phones. A simple cell phone is about two months' salary for the average government worker, while a single iPhone costs a 10 months' salary.

Iran is home to the world's fourth-largest proven reserve of crude oil and holds the world's second-largest proven reserve of natural gas, after Russia. But under Trump's maximum-pressure campaign, the U.S. has cut off Iran's ability to sell crude on the global market and threatened to sanction any nation that purchases it. Oil covers a third of the $80 billion a year the government spends in Iran, meaning that a fall in oil revenues cuts into its social welfare programs, as well as its military expenditures.

IRAN-DEMO-CURRENCY-RETAIL-STRIKE
Iranian protesters shout slogans during a demonstration in central Tehran on June 25, 2018. Atta Kenare/AFP/Getty Images

The rest of the country's budget comes from taxes and non-oil exports, among them oil-based petrochemical products that provide up to 50 percent of Iran's $45 billion in non-oil export.

Years of popular frustration with failed economic policies triggered protests in late 2017, which early the following year spiraled into anti-government demonstrations across dozens of cities and towns. The current problems take root in Iran's faltering efforts to privatize its state-planned economy after the devastating war with Iraq in the 1980s, which saw 1 million people killed.

But Oil Minister Bijan Zanganeh said earlier this month that the crunch on oil exports is hitting harder today than during the 1980s war, when Saddam Hussein's forces targeted Iran's oil trade.

"Our situation is worse than during the war," Zanganeh said. "We did not have such an export problem when Saddam was targeting our industrial units. Now, we cannot export oil labeled Iran."

Still, many Iranians pin the economic crisis on corruption as much as anything else.

"Our problem is the embezzlers and thieves in the government," said Nasrollah Pazouki, who has sold clothes in Tehran's Grand Bazaar since before the 1979 Islamic Revolution. "When people come to power, instead of working sincerely and seriously for the people, we hear and read after a few months in newspapers that they have stolen billions and fled."

First published on June 24, 2019 / 3:26 PM

© 2019 CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.

Anti-US Protest in Iran on Eve of New Sanctions IRAN-DEMO-CURRENCY-RETAIL-STRIKE

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