Tue, Jun 10, 2008 - Page 6 News List

FEATURE: Ostentatious displays of wealth common in Tehran

FLASH AND BLINGAlthough government officials warn against Western consumerism, luxury foreign cars highlight the growing divide between rich and poor


Sporting a Rolex watch and Gucci sunglasses, Amir Ashkan, 28, is proudly cruising down one of Tehran’s main avenues in a sparkling new BMW as if it was the most normal thing in the world.

Hardly a scene many people would associate with a Friday afternoon in the Islamic Republic of Iran.

But such unashamed displays of wealth from the young and ultra-privileged are becoming an ever more frequent sight in the Iranian capital amid a growing gap between the rich and the poor.

“You need to enjoy life,” said Ashkan, a civil engineer.

“Everywhere in the world, having a great car is normal. In the United States and Europe, and even in Russia, some people even have private jets and yachts. But here people are making a fuss just about cars,” he said.

His BMW costs a colossal 950 million rials (US$100,000) owing to import duties. The average Iranian earns no more than US$500 a month.

“Of course, I don’t take this car to work. That wouldn’t look good,” he said.

Flashy imports, including BMW, Mercedes, Nissan and Toyota, are a surprisingly frequent sight in a country whose officials are repeatedly warning of the perils of Western consumerism.

The import of luxury cars has been allowed for several years, but at a price. Iranians must pay a 100 percent tax on such imports, meaning they pay double what an identical car would cost in Dubai.

This has not deterred the rich in the Iranian capital, who have most likely made their money in property or the import business. Last year, 37,000 foreign cars were imported into the country.

Only luxury cars are permitted to be imported, for fear of harming Iran’s substantial domestic mid-range car production industry, which includes major joint ventures with Peugeot and Renault.

“Our prices range between 400 million rials and 3 billion rials. The most expensive model we have is the Mercedes Benz S350,” a car showroom owner said.

Even the occasional Ferrari or Lamborghini, imported with a special license to the tune of a cool US$500,000 can be seen gliding down Iranian streets.

The presence of these vehicles underlines the growing gulf between Iran’s rich and an urban underclass that faces a daily battle to make ends meet.

The welfare minister has estimated more than 9 million people out of a population of more than 70 million live below the poverty line.

Inflation rates of 25 percent that have caused dramatic spikes in the prices of the most basic goods and services have also eaten into the already modest earnings of middle income families.

Iranian President Mahmoud Ahmadinejad was elected in 2005 with a slogan of bringing economic “justice” to Iran to make the poor feel the benefits of the country’s great oil wealth.

But social inequalities are becoming wider, not narrower. Not everyone is impressed by the appearance of smart new cars.

“It’s completely unjust. A 20-year-old kid who has barely earned US$5,000 all his life drives a car worth US$200,000,” bank employee Asghar said.

Much of the wealth in Tehran is generated not by salaries but by property ownership that may go back to well before the 1979 Islamic revolution, helped by soaring prices and rents.

In the past, and still today amongst more conservative elements, it was considered improper to make a show of wealth. But this has changed with a new class of nouveau riche who have benefited from soaring property prices.

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