The Iranian economy has gone from boom to bust in a year, and it seems to be a classic example of Murphy's Law -- anything that could go wrong has, or is about to.
Long past the stage of contracting and adjusting to the new realities, the economy is now nearing total collapse. Oil exported weeks ago has continued to bring in revenue as tankers reach their destinations. But experts say the export cutoff caused by the prolonged strike in the oil fields will catch up with Iran by the end of January.
One expert predicted that already depleted foreign currency reserves, which before the trouble stood at about $10 billion, would be halved within a few months.
Putting it mildly, the new minister of finance and economic affairs, Rostam Pirasteh, observed in an interview after four days in office that "the situation has eroded quite a bit." He said that "every day is a day too late" for arresting the decline.
Nobody is in danger of starving, but the entire country is struggling from day to day. A nation that Shah Mohammad Reza Pahlavi envisioned as an industrial power on a par with France has virtually ceased to function. Economic analysts here say that even if all striking workers return to their jobs tomorrow the recovery would be long, difficult and inevitably incomplete, obliging whatever government comes to power to scale down drastically the shah's economic ambitions.
The strikes, particularly in the banks and the oil fields, are having a domino effect on commerce, industry and investment. In the latest examples, truckeers are reported to be dumping billions of dollars worth of goods at the frontiers because striking customs workers refused to clear them into Iran, and managers of steel mill at Isfahan say they will soon have to close and lay off 60,000 workers because they cannot get any coal.
Meanwhile, striking workers in state-owned industries and government agencies have continued to draw their pay. The result, economic analysts say, is that the country is flooded with cash while consumer goods are scarce, driving inflation up at an annual rate approaching 30 percent and expected to hit 50 percent within two months.
The government continues to grant salary increases in an effort to appease striking workers, but it cannot afford those already promised.
"They'll have to print money," an economic expert here said.
With the Iranian rial already going at more than 90 to the dollar on the black market instead of the official 70, "it will be like the Weimar Republic around here," he said, referring to the economic collapse of pre-Hitlerian Germany.
A recital of the strikes and shutdowns is a picture of a calamity. The shutdown of oil exports has cut off the national lifeline, an estimated $22 billion a year in oil earnings. Even that was not enough to meet the demand of the shah's grandiose schemes, but now it is gone altogether, and there is no indication that the flow will resume anytime soon.
Railroads have been shut by striking workers who feared the army would use the trains to move supplies. The national airline is closed. Most of the 900,000 civil servants are striking. The postal service is closed. The customs strike and the crippling of the trucking industry by the fuel shortage have resulted in mammoth log jams in some of the ports.
No taxes are being collected. An estimated 50,000 unprocessed foreign currency transactions have piled up in the Central Bank. The hotel, tourist and restaurant industries have been devastated. The closure of the banks has crippled private industry because no checks are being proscessed. The few industries still producing cannot transport their goods around the country.
The workers of the state tobacco monopolies have struck to protest the importation of cigarettes. The Peykan auto plant, which has been assembling 150,000 cars a year from British components, has closed.
The rapid exodus of foreign technicians has raised questions about how well Iran's major industrial projects will function once they resume operations. Bankers report international construction companies working on major projects have begun to invoke clauses giving them the right to suspend work because conditions have made it imossible to go ahead.
Foreign corporations with heavy investments in Iran -- including Americans with investments at an estimated book value of more than $700 million -- are reportedly having trouble selling out and cutting their losses because there is nobody to buy their assets.
Even then Iran was abandoning the weapons and nuclear power plants the shah had ordered. There will certainly be no return to those petroleum fueled dreams of grandeur. The issue facing Iran now is whether it can pay its debts and resume operating at a reduced scale.
So far, sources here say, international creditors have been patient because they understand that there is money to pay them that cannot be transferred until the banks resume functioning. When the oil revenues dry up in a few weeks, however, that may change.
Finance minister Pirasteh said, "We will meet our obligations." But beyond that, the country is going to have to undergo a complete reevaluation of its economic priorities.
"We want to be responsive to the economic demands of the people on the street," he said. "We are going to listen to the voices of the people. We will allocate and collect revenues on the basis of what the people tell us."
That means no more big weapons purchases, no more monuments to political folly like the unfinished Tehran Tower of the disbanded official political party, no more imperial visions.
"It's a guns or butter situation," Pirasteh said. "We can't have both."