Iranian Economic Crisis Spilling Over Into Iraq


With western sanctions being placed on Iran and their governments inability to deal with economic matters, the Iranian currency, the rial, is plummeting. The economic crisis is directly affecting their neighbor Iraq as the majority of the countries income is through tourism. More specifically Iranian Shias mostly come visit Najaf, Iraq, which holds one of the most famous shia temples in Iraq. Iran used to make up 95% of Iraq’s tourism industry, but currently owes Iran’s 75 million dollars. Poverty in Iran is directly affecting the tourism industry in Iraq and leaving both countries at an economic stand stil.

 Iran’s outstanding debt has given Iraq little reason to continue its business relations with Iraq. An interesting article in Aljazeera covers the story of one man in particular, whose life has directly been affected by Iranian poverty. Yousif Jassim Mohammed, an Iraqi merchant has had a thriving trinket shop for years, selling jewelry, prayer beads and trinkets, making an average of $1,000/day. Sadly, Iranian tourists and Shia Pilgrims are no longer coming into Iraq. Yousif now makes a tenth of what he used to and says with sorrow that the sanctions that have been put on Iran have hit them hard and are unfortunately affecting Iraq as well. The reason that these sanctions have been put on Iran is because Israel suspects that Iraq’s nuclear program is generating nuclear bombs. This is putting a hold on the Iranian economy, and Iranians are now being forced to pay for more imported goods. Fewer Iranians are now able to afford visits to holy sites in Iraq seeing as the Iraqi dinar now costs roughly three times what it did as recently as last year. The price of organized tours has sky rocketed and made Iraqi merchants far less willing to accept rials as payment. Some Iraqi money exchange agencies are refusing to accept Iranian banknotes, saying they have little use for a currency that is so volatile (Aljazeera). Iraqi business owners are currently boycotting Iranian tour groups until the payment issue is resolved. 

Read this too: http://www.guardian.co.uk/world/2012/oct/01/iran-currency-rial-all-time-low

Sources: Aljazeera & The Guardian 

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