Black Markets – Iran’s Smugglers Feel the Squeeze A recent article in the Businessweek August 6 – 12, 2012 spells out an issue that Iranian’s Black Market smugglers are facing; the sanctions on imports and higher fuel prices. This is bad news for smugglers since it will affect their profit. The majority of the Iranian fishermen depend on the small profit from their illegal profession. Most have a dual profession as smugglers by night and fishermen by day. The demand is high for electronic equipment and even food on the Black Market. Items such as cell phones, flat-screen televisions bring in a minimal profit for these smugglers. However, sanctions that are being imposed, and high fuel prices are digging into the little profit that the smugglers are netting. In addition to the sanctions, the smuggled goods are also diminishing the jobs in Iran. According to the Customs and Excise Department every $1 billion in smuggled goods, costs Iran 50K to 60K in jobs (Businessweek, P15). There is an even higher cost to the smugglers; they are risking their lives to bring over these items illegally. Over 80 percent of the electronics in Iran are smuggled into the country. This issue is creating an upward shift, and the cost of basic items is rising due to the lost in value of their currency. Based on the Demand analysis, the increased sanctions are causing a downward shift for the black market to smuggle. Another downward shift is the profit that the smugglers are making. This is due to the rising cost of fuel. This article illustrates issues with demand, supply and pricing.

Bloomberg’s Businessweek – August 6 - 12, 2012 - Iran’s Smugglers Feel the Squeeze