RIYADH,15 September 2006 — Last November, during my visit to Iran, I was taken aback when Dr. Yahya Kamalipour, head of the Department of Communication and Creative Arts, Perdue University Caulmet, Indiana (USA), told me that I need to bring my suitcase so that he could return my money in Iranian currency spent on an air ticket. A suitcase to get just about $1,100 for a return ticket to India? I thought he was joking. But he wasn’t. Later it dawned on me that a cup of tea in the hotel where I was staying in Tehran cost around 5,000 Iranian riyals. Thank God, my expenses as an invitee to the international conference were being met by the organizers or else I would have been forced to carry loads of currency for every meal and the visits to the media houses in the city.
However, I did exchange just about $100 and got a bagful of currency from one of the jewelers in the downtown market to buy the famous pistachios and other Iranian condiments.
I am not sure how the currencies are interlinked or fluctuate on a day-to-day basis. I have read about currency manipulators former Malaysian Prime Minister Mahathir Mohamed had spoken about. So bad was the Asian financial crisis (1997-98) that currencies of some countries were sarcastically dubbed as “no more valuable than toilet papers”.
Politics and manipulations aside, all I know is apples cost just about SR4 a kg in Saudi Arabia’s supermarkets while the same could cost rupees 40 in India and may be 80 pesos in the Philippines. One of the speakers at the conference held in Tehran told me that meat cost 50,000 Iranian riyals per kilogram. Sixteen years ago, an Iranian just paid about 5,000 riyals for every kg of meat.
Fed up with this shooting numbers and inconveniences associated with carrying huge amount, elsewhere in Zimbabwe, the government has now come out with the novel idea of devaluating its currency (Z$) by more that half besides taking off three zeros from the existing notes.
The new notes were promptly exchanged with the older version within a deadline set by the government. Some businessmen had to send their money by trucks while individuals sweated in long queues with the piles of notes.
The chaos made the government not to entertain more than Z$100 million at one go from individuals although it meant exchanging just about $400! People had no choice but spend their remaining millions in a shopping mall and fetch whatever little they could. The experts attribute such currency disasters to high inflation (as in case of Iran) and hyperinflation of around 1,000% the Zimbabwe had to cope with. It is irony that the former is one of the first five oil rich countries in the world while Zimbabwe till recently was Africa’s second biggest economy.
All this reminds me of India’s own pathetic situation in early nineties when government had barely anything left in its coffers and foreign exchange reserve was virtually wiped out. The country was worried about how to get its day-to-day petrol requirement.
Fortunately, wiser counsel prevailed as those at the helm embarked on the new economic reforms instead of resorting to beg and borrow policy of yesteryears. Despite high oil prices in the international market we see the difference today in the country’s fortunes. It seems the tough measures — whatever the opposition — do work.
