Iranian traders are searching for a lifeline in Iraq despite harsh sanctions.

DOHUK, Iraq (AP)-Piles of plush carpets line the floors of a shopping center in northern Iraq hosting neighboring Iranian traders who hope that their ornate arts and crafts will provide a lifeline out of misery.

In their own country, in the middle of crippling U.S. sanctions, the economy is in tatters.

“Our money is so eroded, so it’s more beneficial for us from a financial point of view when we come to this side, apart from the cultural exchange we share,” said Iranian Ramiyar Parwiz, the exhibition’s organizer who is originally from Sanandaj. “The money we’re getting… whether in dollars or dinars, on our side, has a higher value, and it’s worth a lot.”

This week, in the city of Dohuk in the Kurdish-run northern area of Iraq, at least 24 companies from 15 Iranian cities have set up shops. They brought luxury carpets from Sanandaj to Bijar. Precious stones, copper and pottery from Isfahan, Yazd and Hamadan.

Iran is one of the largest trade partners in Iraq, and this cooperation has deepened since 2018 in the sense of the maximalist Iran policy of the Trump administration, which has seen the U.S. pull out of Tehran’s 2015 nuclear agreement with world powers and levy punitive sanctions on the government.

Every year, tens of thousands of Iranian pilgrims visit holy sites in Najaf and Karbala, strengthening the emerging tourism sector in Iraq. Every day, over 100 trucks ferry building materials, food, medicine and appliances into Iraq.

The reliance on Iraqi markets has only deepened as economic conditions in Iran have worsened. U.S. sanctions prohibit American businesses and foreign companies from dealing with Iran, affecting the energy, shipping and financial sectors of Iran, causing foreign investment to dry up.

Oil exports were hit hardest and Iran’s economy contracted with dreary forecasts for the future. Unemployment has increased and rural populations have been affected unequally.

The Iranian business exhibition is usually held in the city of Sulimaniyah, which borders Iran, every year. This is the first year that traders have ventured to Dohuk, which shares stronger economic relations with neighboring Turkey, aiming to draw new buyers and raise the market for Iranian products.

Parwiz said that desperation was the product of the Dohuk company.

“People (in Iran) are under enormous pressure, and the cost of living is inconceivably high,” he said. “We can’t afford to buy something, we can’t afford to buy drugs.”

Iraq has always offered hope of respite for Iranian businesses facing tough times.

Haji Tousi, a Mashhad businessman, sells his fine carpets at a lower price than local traders in Iraq. He knows he will be kept afloat by the dollars he brings back home to Iran.

“The type of carpet we sell here is $200, while the same carpet is sold here for $300-350 on the market,” he said.

But the effect of Iraq’s own economic woes was in plain sight, to the dismay of many Iranian traders: the exhibition draws crowds of tourists, but many can not afford the marked-down goods.

There are many tourists who have received this exhibition warmly, but they have been prevented from (purchasing) economic problems,” said Maryam Mradi, a Sanadaj businesswoman.”

Iraq is dealing with an acute crisis of liquidity triggered by low oil prices. That slashed state coffers in half and led the government to borrow from the foreign currency reserves of the central bank to make wage payments.

Some of the Iranian suppliers were skeptical that their products would be well received in Dohuk and other areas of Iraq, where shopping islands are dominated by Turkish brands.

The demand from the people is mainly for Turkish products,” Shireen Mohammed, a local resident, said.”

Source: Yahoo News