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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 industries.

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 states.

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 years ago.

"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," said Bidani.

"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 yellowing newspapers.

"And if you come back in a couple of years you won't find me here either."

Copyright © 1997 Abadan Publishing Co. All Rights Reserved. May not be duplicated or distributed in any form