TEHRAN -- Inflation is surging in this Islamic republic, at least 50 percent a year.
The currency, the rial, has become nearly valueless, with the dollar rate in the black market as much as 20 times the official rate.
A pack of Winston cigarettes costs the rial equivalent of $14 at the official rate, and less than $1 at the black market rate. Government presses churned a lot of rials into the economy during the war, diplomats say, debasing the value.
Now the economy has become "dollar-oriented" at least, said one diplomat, meaning Iranians will do most anything to lay their hands on American greenbacks. But many cannot.
The worst cases are the government workers. They are paid a pittance in rials and given a subsidy for food and housing. But the inflation rate has far outpaced the subsidy and they cannot compete in free-market bidding for groceries and apartments.
"It's very sad," said a European diplomat of the ordeal of the government employees. "They're just stripping their assets, selling their jewelry, their cars. They'll sell a home that's been in the family for generations to raise cash, then move into a rental -- and then the rents start climbing."
The bazaaris, selling goods for dollars, are maintaining the grip that has made them the "must" ally of any group holding political power here.
"These guys are wonderful," a longtime British observer said of the merchant class. "There's this guy down in the bazaar (the traditional marketplace) that you'd turn away from your back door. He wears filthy clothes, half his teeth are missing and he wears these awful old slippers. But he's one of the biggest merchants down there. That's just his cover for the tax man."
Bazaaris know all the tricks. Iranians traveling abroad can bring back one television set. Each family member returns with a new Sony. All go into the bazaari's warehouse.
Any able Iranian is working two jobs; your evening cab driver may be a physician or an engineer. If his English is good, he is probably a graduate of an American or British university. The second job means less time spent on the first job, of course.
An Italian businessman was giving the lowdown to a recently arrived Australian over chelokabab, grilled lamb over flavored rice, the national favorite, at the Laleh Hotel (formerly the Inter-Continental), which still greets patrons with a large sign declaring "Down with USA."
Said the Italian: "You must begin early. All the officials here leave their offices at 1 p.m."
"Probably going to their second jobs," suggested the Australian.
"Well, they're not playing golf," his companion responded.