Business Daily – "Iran: Inside an Economic Crisis" (BBC World Service, Jan 14, 2026)

Episode Overview

This episode of Business Daily investigates Iran's deepening economic crisis—what has triggered widespread protests, why life for ordinary Iranians has become so difficult, and whether government measures can stem the tide. Host Rahul Tandon explores the key drivers: currency collapse, runaway inflation, sanctions, and systemic corruption, through candid conversations with Iranian economists, analysts, and first-hand accounts from those living and working in and around Iran.

Main Discussion Points & Insights

Setting the Scene: Protests and Daily Hardship

• Backdrop: Iran is facing mass demonstrations, with Reuters reporting around 2,000 people killed, including security personnel ([03:03]).
• Focus Areas: The episode examines three critical factors for the economic collapse—depreciating currency, crippling sanctions, and pervasive corruption ([03:27]).

Quote:
"I think it’s the worst, the most direst condition of Iran in the past 50 years."
— Mahdi Godsai, Iranian economist ([02:31])

The Human Cost: Plummeting Living Standards

• Personal Hardship: Iranians are struggling to afford food basics; traditional foods like kebabs and chicken are now luxuries, with even half portions or meals of "rice with bones" being normalized ([06:22]).
• Cultural Shift: Social gatherings and the practice of "mahmuni"—hosting and sharing food—are in decline due to rising costs.

Quote:
"People don't eat meat anymore. You know, like most Middle Easterns, we love kebab in Iran, but it’s like a luxury now. Chicken, also kind of a luxury. Fish, forget about it."
— Arash Azizi, author and journalist ([02:41], repeated at [05:39])

Quote:
"There are restaurants in southern Tehran... serving dishes like rice with bones of meat or chicken because people can't afford the actual thing... they will just get some of the broth and the bones."
— Arash Azizi ([06:37])

Economic Decline by the Numbers

• GDP in Freefall: Iran's GDP shrank from $644 billion in 2012 to a projected $356.5 billion by 2025—contrasting with global trends of economic growth ([07:40]).

Deeper Dive: Causes of the Crisis

1. Sanctions: Roots and Ramifications

• Sanctions Legacy: Imposed first in 1979, frequently tightened, recently losing its title as “most sanctioned” to Russia ([08:26]).
• Regional Effect: Sanctions not only restrict Iran's dealings with the West but also complicate trade with neighbors like Turkey, the UAE, and Pakistan ([08:47]).
• Corollary Effects: Sanctions worsen inflation, collapse the currency, and promote a black-market economy.

Quote:
"This will then of course translate into further pressure on the Iranian economy that is already suffering from huge collapse of its currency and inflation."
— Dr. Sanam Vakil, Chatham House ([08:47])

2. Currency Collapse

• Hyper-Devaluation: Over a decade, the USD-Iranian rial exchange rate soared from 10,000 to 1,500,000 per dollar, making imports—on which Iran heavily relies—unaffordable for most ([13:01]).

Quote:
"Now, currently it's 150,000 toman or 1,500,000 rial. It's a huge devaluation and depreciation... It is continuously becoming more and more expensive."
— Mahdi Godsai ([13:01])

• Scrapped Exchange Rate System: The end of a preferential exchange system for imports fueled corruption—officials exploited the dual rates to profit from selling subsidized imports at market prices, exacerbating shortages and price hikes ([14:44]).

Quote:
"They were making lots of money out of this corruption... leakage in the financial system, leakage in the exchange rate... essential goods that are being imported, they would become so expensive so that the bazaaris could not sell anymore."
— Mahdi Godsai ([15:26])

3. Corruption: The Sanctions Profiteers

• Sanctions Profiteering: The opaque system required to circumvent sanctions has empowered a shadowy elite, draining billions from the economy while the general population suffers ([16:15]).

Quote:
"There's even a term for that: sanctions profiteers. So it’s created this small minority of elite who are benefiting from these economic sanctions."
— Negar Motazavi, Eye for Iran podcast ([16:15])

• Entrenched Interests: These profiteers are so powerful that their grip on the economy is almost impossible to break, and the state itself depends on them for trade, creating a vicious cycle ([17:33]).

Government Response: Can Handouts or Reform Succeed?

• Token Measures: The government’s new $7 handout is overwhelmingly seen as insufficient; millions are also spent on fuel subsidies ([18:16]).
• Mistrust and Skepticism: Previous similar efforts lacked sustainability or impact; trust in government solutions is low.

Quote:
"It’s a good start, but it wasn’t enough... the economy is very complex and the problems they’re dealing (with) are very complex ... every solution they come up with ... hits the wall of the massive and very powerful wall of corruption."
— Negar Motazavi ([18:38])

The Way Forward: Is There a Solution?

• Sanctions Relief? Many analysts, including Motazavi, suggest that only foreign policy change and diplomatic engagement can ease sanctions and allow economic normalization ([19:44]).
• Political Barriers: Despite historical precedents—like the end of the Iran-Iraq war or the 2015 nuclear deal—current leadership seems unlikely to pivot, making a reversal in policy and corresponding relief from sanctions hard to imagine ([20:27]).

Quote:
"Iran was engaged in a bloody war with Iraq in the 1980s, and it looked like there’s no end to it… and eventually, after eight years, they came to a ceasefire ... But so far it doesn’t look like that’s the path they want to take."
— Negar Motazavi ([20:27])

Notable Segments & Timestamps

• [02:31] Mahdi Godsai on dire conditions in Iran
• [04:57] Tehran bazaar shopkeeper’s testimony of daily hardship
• [06:22–07:40] Arash Azizi on collapsing living standards and social change
• [07:40] Decline in GDP outlined by Rahul Tandon
• [08:47] Dr. Sanam Vakil explains the crippling effects of sanctions
• [13:01] Mahdi Godsai—currency collapse concretely explained
• [14:44] Preferential exchange rate, corruption, and market manipulation
• [16:15] Negar Motazavi on ‘sanctions profiteers’ and deepening inequality
• [18:16] Evaluation of government cash handouts and public skepticism
• [19:44] Policy recommendations and real-world constraints

Memorable Quotes

| Speaker | Timestamp | Quote | |----------------|-----------|-------| | Mahdi Godsai | 02:31 | "I think it’s the worst, the most direst condition of Iran in the past 50 years." | | Arash Azizi | 05:39 | "People don't eat meat anymore... kebab in Iran, but it’s like a luxury now. Chicken also kind of a luxury. Fish, forget about it." | | Negar Motazavi | 16:15 | "There’s even a term for that: sanctions profiteers. So it’s created this small minority of elite who are benefiting from these economic sanctions." | | Negar Motazavi | 18:38 | "It’s a good start, but it wasn’t enough... every solution they come up with ... hits the wall of the massive and very powerful wall of corruption." | | Negar Motazavi | 20:27 | "But so far it doesn’t look like that’s the path they want to take." |

Tone and Language

This episode is marked by direct personal testimony, frank expert analysis, and a tone of deep concern mixed with realism. Iranian voices express both pride in their culture and mounting frustration, while expert guests explain the mechanics of economic decline in accessible terms.

Summary for New Listeners

This episode offers a vivid window into Iran’s ongoing economic collapse—its day-to-day impact, structural causes, and the sense of entrapment felt by ordinary people. Rather than sensationalize, the discussion underscores the complexity of the crisis, the outsized role of sanctions and corruption, and the difficulties in finding any easy solution. You’ll come away with a clear understanding of why the crisis is so deep—and why it’s so hard to fix.