Tehran, Iran – Like many Iranian small business owners, Ehsan could never have imagined the challenges 2020 would throw at him.
The 41-year-old manufactures shirts, pants, tops and accessories at his workshop just outside Tehran which he then sells at his wholesale store in the Grand Bazaar in the capital Iran.
Between the two centers, it employs around 50 people.
In February, after the first confirmed cases of COVID-19 in Iran, the country’s neighbors began closing their land and air. That raised the price of goods imported in Iran, including clothing that Ehsan needs to complete his clothing line.
More economic pain came in March after President Hassan Rouhani’s government ordered nationwide to halt the spread of the disease, further disrupting business activity and squeezing household budgets.
By April, Ehsan’s customer base had shrunk.
“Our old customers never came in again because they couldn’t sell their old stock and had to sell it later when the commodity season was over,” he told Al Jazeera. , calling for his surname to be withheld to protect his privacy.
But market dynamics changed abruptly in favor of Ehsan, he said, as the gap left by old buyers was filled by new sellers who had attached themselves to new trades. against the pandemic.
“They were replaced by others, such as one that used to sell Turkish goods in Iran and could no longer introduce this dollar rate,” Ehsan said. “So we didn’t really feel the prices rise at least at the beginning of the pandemic.” The smaller sellers were the ones who caught the big hit. “
Ehsan clothing factory on the outskirts of Tehran [File: Al Jazeera]Survival substances created in sanctions
The 2020 COVID-19 pandemic was not Ehsan’s first foray into a potentially disastrous industry.
After US President Donald Trump revisited Iran’s nuclear deal with world powers in 2018, Washington embarked on a “maximum weight” campaign of non-stop sanctions designed to boost Iran’s economy to press.
The damage done is evident in the value of Iran’s currency. The rule went down from about 40,000 to $ 1 before the Trump administration imposed sanctions, to a total of 320,000 in mid-October – when Washington made an effective list of Iran’s financial sector.
Since then the rule has returned to 250,000 against the US dollar. But Ehsan, who used to travel to Turkey, the United Arab Emirates and Thailand to buy some of the products he needs, must learn to live with conditions quickly turning against him.
“We used to buy the best French lining for our coats at 12,000 tomans (120,000 rials or $ 0.48) per meter, but two months later when we re-ordered it 22,000. Suddenly a thread box was worth 10 times, ”he said.
Thanks to the government’s crackdown on smugglers to protect local manufacturers, Ehsan has been able to keep its business going against sanctions. Now, he says, it’s hardened.
“We’ve been operating in the worst markets and I’ve seen the lows and highs in the 21 years I’ve been working, so we’re still holding on and not we are not afraid. “
Newly started desperately
Not all small business owners have been created as a result of previous economic challenges.
For four years, Sara Farnad has run a small bakery from her mother’s basement in Tehran.
Prior to the pandemic, she hired two people to help her take out cookies and cakes for sale to cafes around the capital. But she had to let her staff chase the pandemic through the restaurant industry, dampening demand for her wares.
“I used to work with five cafes but now there are only two. His orders are down to a third of what he used to be, ”the 36-year-old told Al Jazeera.
“I’ve sent out sample work to several other cafes but they say they can’t afford that.”
Farnad also has private customers. But they won’t keep as many orders from her either, thanks to belt tightening and social distance management.
The challenges that Farnad have faced this year have been enormous.
Iran has experienced the worst-case of COVID-19 in the Middle East. The government first recognized that a coronavirus was on its way into the country in late February by abruptly announcing the deaths of two people in Qom, located south of Tehran.
It was the first of three waves this year that have captured at least 1.1 million people in Iran and killed more than 52,000 according to government figures. Health authorities believe the true rate, including undiagnosed diseases, could be nearly double that.
Iran has installed two broad locks since the COVID-19 strike. The first set of restrictions ordered in March closed most of the country, including the Farnad store.
Restaurants and cafes were allowed to reopen in May, but Farnad kept her bakery closed in June out of concerns about her well-being and family.
When it reopened, she discovered an industrial landscape that had changed dramatically.
Prior to the pandemic, Sara Farnad employed two people in her small bakery making biscuits and cakes. [File/
Al Jazeera]
“In that time, the dollar had become more expensive, leading to rising raw material prices,” she said.
Furnad was modified by buying fewer ingredients and reducing its production while trying to quantify demand. The riot destroyed the stability she had been building so hard.
“It will take years to achieve some stability and have an idea about the price ranges, but this instability and then the virus challenges you.”
She was further upset in November when she was forced to close the store again after Tehran and hundreds of cities across the country halted some attempts to halt on an alarming increase in diseases.
“If I had to pay rent in the last few months, I would certainly have been closing down my business,” she said, adding that she is committed to maintaining her business survives despite the uncertain outlook, the burden and the pressure of not getting a stable paycheque.
‘Just to keep the lights on’
Ali owns two small businesses located side by side in western Tehran.
One is a property bankruptcy office, which he personally runs. The other sells single-use plastic knives and other party supplies.
This latter business is only in balance, Ali said, urging Al Jazeera to withhold his surname to protect his privacy.
“Basically, whatever we put in is just to keep the lights on and pay the only person who works there,” the 44-year-old said. “It won’t make any profits.”
“When there is no price stability, there is no profit. It’s just a matter of getting money in and out of your pocket so you can keep from idle. “
The realtor business is not doing much better, he said. Some days go by with very little phone call from potential buyers, thanks to the skyrocketing rise in home prices, and competition from real estate websites that have become popular.
“We had five councilors working with us here, but now there are only two of us,” he said. “Most counselors are the uneducated young people who need the job.”
Sara Farnad ‘s art bakery in her mother’ s ground floor in Tehran [File: Al Jazeera]
Ali said the government did not give him any help and the tax authorities say he earns more than he publishes.
“The country is right now in a way that the people of the government just want to take something out of the pockets of the people,” he said.
Early in the pandemic, President Rouhani’s administration announced loans for an estimated three million businesses affected by the coronavirus.
According to the latest figures, the cash management had approved approximately 73 trillion rials ($ 292m) in loans to businesses by the end of November, and will project more than 116 trillion rials ($ 464m). million) before the pandemic is over.
The loan amounts to up to 160 million stars ($ 640) per employee for businesses directly and indirectly affected by the pandemic and carrying a 12 per cent interest rate – around 40 percent lower than market average.
But it is difficult enough to get sureties and alignment for the loans and not everyone can afford to pay more debt right now.
“I was thinking about a 10 million tonne ($ 400) loan in the summer to buy new boxes and a better electric mixer but that figure is always getting worse,” Farnad said. “I wasn’t sure I could pay it back.”