Sunday, April 13, 2008

A Roadside Conversation on Inflation in Iran

Katalaxy blog has a note on its author’s conversation with a cab driver in Tehran that I found very insightful. He wrote:
I was walking out of Mehrabad Airport in Tehran looking for a lift to Sa’adat Abad[1]. The cab drivers were yelling their fares from 8’000 to 10’000 Thoman[2] , so I passed. Then someone said: Sa’adat Abad 5 Thoman (meaning 5’000 Thoman). It seemed fair and the cheapest. So I stopped and said:
- Two months ago I went this road for 4’000 Thoman, 25% increase in just two months

He said:
- Two months ago the year was the year of national unity, this year is the year of innovation and invention
He was right, I laughed and got into his car

I love this story because it some how outlines how an Iranian consumer adjust his or her attitude toward inflation. Sometimes he or she does it by a smart comment with some reference to political realities or objectives set by authorities.

[1] A neighborhood in northwest of Tehran, mostly recent constructions It was developed rapidly in 1980’s and 1990’s.
[2] One Thoman is 10 Rials, although Rial is official currency people always use Thoman in their dealings, daily shopping and business activities. One Thoman also stands for 1’000 Thoman or 1’000’000 Thoman, depending on where the conversation is happening. (And most recently for 1'000'000 Thoman, this notion is used in real estate market).
[3] Reader surely observes that the increase in fare is as high as 100% for some other cab drivers.
[4] Iranian new year begins with the first day of spring. In New Year day in their official greetings the officials usually call people to concentrate their efforts in achieving a moral objective, last year this objective was Islamic national unity. This year's objective is achieving technological advancement through innovations.

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