Unveiling a New Era of Consumerism Amidst Economic Struggles

For architecture student Amirhossein Azizi, turning 19 meant more than just another birthday—it marked the acquisition of an iPhone 16 Pro Max, one of the most expensive phones in Iran. The device cost him approximately $1,880, with an additional $530 for import fees and registration. Despite the hefty price tag, Azizi remains elated. “I’m very happy to own one of the most coveted gadgets,” he remarked. His father, Mohammad, couldn’t help but chuckle, adding, “If they had to earn this money themselves, they might think twice.”

This purchase is not just a personal milestone for Azizi; it symbolizes a broader shift in Iran’s economic policies. By lifting bans on luxury imports, the government aims to address public demand while generating much-needed revenue. However, this decision also highlights the stark divide between the wealthy elite and the average Iranian citizen, many of whom struggle to make ends meet amid record-low currency values.

Economic Strategies Under Scrutiny

The concept of a "resistance economy" was introduced by Supreme Leader Ayatollah Ali Khamenei nearly 15 years ago as a response to mounting international sanctions. The idea was to foster self-sufficiency and resilience against external pressures. While this strategy initially appeared successful, particularly in maintaining trade relations with countries like China, it has gradually revealed its limitations.

Iranian economist Saeed Leilaz argues that the resistance economy is more about perception than reality. “Sanctions are not new for us,” Khamenei once stated, emphasizing Iran’s historical ability to thrive under adverse conditions. Yet, the rial’s value has plummeted from 32,000 to $1 in 2010 to 885,000 to $1 in 2024, eroding public savings and pushing citizens towards alternative investments like gold, real estate, and cryptocurrencies. For ordinary Iranians, the economic landscape has drastically changed since the nuclear deal, which saw Iran agree to limit its uranium enrichment in exchange for sanctions relief.

Impact on the Automotive Industry

The ban on importing fully built foreign vehicles in 2017 was intended to protect domestic manufacturers and conserve foreign reserves. However, this policy led to a surge in prices for used foreign cars and locally produced models often derided as unsafe. Car dealer Saber explained, “Since the number of newly imported cars is still limited, only a few people can afford them. As a result, imported cars have skyrocketed in price on the open market.”

The recent relaxation of import restrictions has brought some relief, with car shows featuring brands like Mazda, Nissan, and Toyota attracting eager buyers. Nevertheless, the volatility of the rial continues to pose challenges. Saeed Maleki, an attendee at a Tehran car show, expressed his concerns: “Today they tell you a car costs 3 billion rials. But after a week or a month will they still sell this for 3 billion? No! They will charge me with the new rates.”

Luxury Imports and Government Revenue

Despite the controversy surrounding these policies, the government sees luxury imports as a quick fix to plug financial gaps. In the last Persian year, Iran imported $3.2 billion worth of mobile phones, with high-end iPhones becoming a lucrative source of income. Economist Leilaz noted, “Lifting restrictions on a few platforms or allowing iPhone imports are the kinds of steps the government can take quickly and with minimal cost to create a sense of progress.”

While these measures provide short-term benefits, they do little to address long-term economic issues. For instance, the Revolutionary Guard, a powerful paramilitary force, has capitalized on sanctioned trade, further entrenching its influence. Meanwhile, the average Iranian grapples with inflation, unemployment, and uncertainty over future U.S. policies under President Trump, who has suggested talks but also imposed stricter sanctions.

Public Sentiment and Political Implications

As Iran’s economy worsens, the government faces growing pressure to find solutions. Officials, including Supreme Leader Khamenei, have cautiously endorsed dialogue with the West, recognizing the need for optimism amidst challenging times. The lifting of import bans reflects a delicate balancing act—meeting public demand while maintaining control over the narrative of economic resilience.

However, the true test lies in whether these policies can sustainably improve living standards or merely offer fleeting relief. For now, the focus remains on navigating the complexities of a global economy dominated by the U.S. dollar, where every decision carries significant consequences for both the government and its people.