Not all economic news is bad these days. There's always a silver lining. Apparently the current economic unpleasantness is hitting Iran pretty hard and that could be a good thing:
In the United Arab Emirates (UAE), where much of Iran's foreign trade is handled, local banks are refusing to do business with the 10,000 Iranian trading firms based there. This has caused delays and cancellations of Iranian imports (over $9 billion worth from the UAE last year) and exports. This is being felt by the ruling elite in Iran. There, the large extended families of the clerical leadership live the good life, and the goodies come in via the UAE. The sudden shortages of iPods, flat screen TVs, automobiles and bling in general, has been noticed in Iran, and is not appreciated.
The falling price of oil is producing another problem, national bankruptcy. The government admits that if the price of oil falls below $60 a barrel (which it has) and stays there (which it may, at least until the current recession is over), the nation will not be able to finance foreign trade (which is already having problems with increasingly effective U.S. moves to deny Iran access to the international banking system), or even the Iranian economy itself. The latter problem is largely self-inflicted, as president Mahmoud Ahmadinejad desperately borrows money to placate his few (heavily armed and fanatical) followers (about 20 percent of the population). The rest of the population has been in recession for years, and is getting increasingly angry over Ahmadinejad's mismanagement. Some 80 percent of Iran's exports are oil.
Maybe a restive Iranian populace will solve the problem of what to do about Tehran's nuclear ambitions so that military options become unnecessary. If that were a result of the current economic doldrums it would make the present financial pain worthwhile and would certainly be a wonderful turn of events.
RLC
