In the past Iraq’s economy relied primarily on tourism, more specifically Iranian tourism. Iranian tourists made up 95% of Iraq’s tourism industry; each year thousands of Iranian Shias came to visit Najaf, Iraq, which holds one of the most famous Shia temples in the world. Currently Iran is in an economic crisis and owes over $75 million dollars in debt to Iraq. Poverty in Iran is directly affecting the tourism industry in Iraq and leaving both countries at an economic standstill.
An interesting article in Aljazeera covers the story of an Iraqi man whose life was directly affected by the economic crisis in Iran. Yousif Jassim Mohammed, an Iraqi merchant, has had a thriving souvenir shop, next to the Shia temple in Najaf for years; selling jewelry, prayer beads and trinkets. Yousif used to make an average of $1,000/day, but currently makes a tenth of that. Due to the lack of Iranian Shias visiting the temple, Yousif stated “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 placed on Iran is because of Israeli’s suspicion that Iran’s nuclear program is generating nuclear bombs. The European Union has also imposed restrictions on Iran in the foreign trade and financial sectors. On January 23rd 2012, the EU agreed to an oil embargo on Iran and froze Iran’s central bank. These embargos are ruining the oil industry in Iran, and forcing Iranians to pay more for imported goods.
Due to the fall of Iran’s economy and the lack of tourists in Iraq, 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 Iranian currency 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. What do you think Iran needs to do to have these sanctions removed? Are Israel and the UN at fault for placing these sanctions?
Sources: Aljazeera.com, TheGuardian.Com
Photo: Google Images