The Iranian Art Market Amidst Sanctions: How Financial Pressures Impact Iran’s Domestic Art Industry

Iranian contributions to art, film and architecture are world renowned and stem from an ancient history. In the midst of severe economic sanctions, Iran’s domestic art market continues to survive. However, broad economic sanctions have various impacts on all industries and sectors, and Iran’s domestic art market is no exception.

The recent devaluation of the rial has contributed to a spike in art sales. According to Hormoz Hematian, the founder of one of Tehran’s leading contemporary art galleries, the equivalent of $10,000 can buy “almost quadruple what it would have been able to 15 months ago.”  As a result, Iran’s elites have flocked to auction houses in Tehran, largely because they view purchasing such art as an investment. According to art specialist Bibi Naz Zavieh, the economic pressures in Iran have triggered and reaffirmed the age-old belief that art is “still one of the safest places to invest and keep money value.”

For some Iranians, economic difficulties and the looming threat of bankruptcy has forced them to sell their art collections. While some look to sell, others look to capitalize on such opportunities. Moreover, under Iran’s current tax code, art is a tax-free commodity, and those investing in expensive works can claim their purchases as business expenses in order to pay less taxes. The use of art as a store of value provides the wealthy with a safety net during times of economic duress. It also demonstrates one of the many ways that the ultimate burden of broad economic sanctions is borne by the most socioeconomically vulnerable classes.

These financial mechanisms provide little to no monetary gain for the producing artists in the Iranian art industry, who often find that sanctions prevent them from participating in global art events. Sanctions also have helped create monopolies in Iran’s domestic art market. As the value of the rial has decreased and international business has become next to impossible, some galleries no longer do business outside of Iran and instead trade amongst themselves and domestic art collectors exclusively. Auction houses have also become exclusive, and many experts at the Tehran Auction are also the sellers. These conflicts of interest can compromise the transparency and credibility of the experts, and affect the selection of works and artists involved in the auctions. As an indirect result of sanctions, emerging Iranian artists have even less access to international opportunities, and auction houses have even more power over artists’ visibility.

Broad economic sanctions have contributed to a redirection of resources throughout Iran’s economy, which has increased domestic investment in Iran’s art market. The recent upsurge in domestic art sales involves complex developments and changes in the buying and selling of Iranian art – changes that may become systemic over time, and which can distract the industry from foster long-term vision for the prosperity of Iran’s artists.

By Nikki Vafai