The plight of the Persian carpet
TEHRAN, Dec 1 (AFP) - Ali Bidani sits disconsolately in his corner shop
in a passage in Tehran's sprawling old bazaar, surrounded by piles of luxurious
hand-woven carpets he says he cannot afford to sell.
After almost two decades running a business that has been in his family
for generations, Bidani is considering joining some of his fellow Iranian
carpet merchants and simply shutting up shop.
"There are almost no tourists ... and it can cost me so much in
customs and taxes that it's not worth my while to export," he lamented.
Iran's carpet industry is in crisis, grim news for a government already
grappling with a plunge in world crude oil prices and its national currency
while unemployment and the national debt soars.
Carpet exports, the top foreign currency earner after oil, have sunk
from 1.8 billion dollars in 1994 to around one billion dollars in the last
fiscal year ended March, and earnings are forecast to drop further to no
more than 700 million to 800 million this year.
The industry is also by far Iran's largest employer, providing jobs
to around two million weavers -- mainly working in small family related
businesses in villages across the country -- and 300,000 others in related
Prized for centuries for their fine workmanship, quality wools and silks
and exquisite designs, Persian carpets now face stiff competition from
aggressive new exporters such as India, Pakistan, Turkey and Central Asian
But local traders complain that their industry is facing a greater challenge
at home -- crushing state bureaucracy.
Carpet sales abroad suffered a major setback in 1995 when the government
began to strictly regulate currency transactions involved in trade in a
bid to reduce imports and stabilise the Iranian currency, the rial.
Traders complain that the dollar value set for carpets by customs is
too high, often well above the price they can hope to gain in Europe, say,
a shortfall exacerbated by the difference between the official dollar rate
of 3,000 rials and a black market rate closer to 7,000.
"Some people resort to smuggling and send carpets out of the country
on boats to the Gulf. Often they are stashed away underneath the boat,
wrapped in plastic, so no-one can discover them on board," says Bidani.
Even sales to the few Western tourists who find their way into the bazaar's
covered alleyways could be blocked by the US economic sanctions imposed
on Iran in 1995 which can restrict certain credit card sales.
Bidani also complained that private merchants were losing out to government
bodies and even powerful Islamic clergymen with access to cheaper carpets
but which are exempted from the cumbersome customs regime.
"Imagine, I've been in this business since I was a child and can
only claim to know about a fraction of the market. Clerics, what can they
know about carpets?"
The parlous state of the carpet industry was the subject of an emergency
parliamentary session this month as MPs discussed ways of boosting Iran's
flagging share of the world market.
Iran is attempting to wean its economy off near-total dependence on
oil sales, which provide the state with around 80 percent of its foreign
exchange earnings, placing its hopes on products such as pistachios, caviar
and handicrafts as well as carpets.
But conservative MP Mohammad Nobakht said Iran now accounts for just
31 percent of global carpet sales from 41 percent in a market that itself
has shrunk to around two billion dollars from 2.4 billion dollars a few
"Over-production without attention to quality, people's declining
purchasing power and the lack of diverse carpet designs in Iran have caused
it to lose its world market," he said.
Hand-woven production of around 7.5 million square metres (80 million
square feet) is also being threatened by permits issued by the government
allowing production of 70 million square metres (750 million square feet)
of machine-made carpets, Nobakht said.
"Ten years ago, you couldn't buy a carpet shop because the business
was so lucrative. Now there are for-sale signs everywhere around here,"
"Look across the way there, he's gone and now running a supermarket,"
he said, pointing to the empty shop opposite, its windows plastered with
"And if you come back in a couple of years you won't find me here