Zahra Kaviani, a researcher at Iran’s Center for Parliamentary Research, revealed at an economic meeting in Tehran on Wednesday, December 27, that the poverty rate in the country surpassed 30 percent in 2022, with nearly 26 million people classified as poor.
Kaviani attributed the impoverishment of almost one-third of Iran’s population to the country’s macroeconomic failures. During the meeting, titled “Evidence-Based Policymaking” and hosted by the Center for Data Analysis at the Sharif Institute for Economic and Industrial Studies, Kaviani argued that simply increasing employment statistics or support assistance would not be sufficient to lift people out of poverty. She emphasized the need to optimize supportive policies instead.
Furthermore, Kaviani highlighted that in 2021, approximately 65 percent of individuals in poverty were unable to escape their impoverished circumstances. This staggering figure indicates that about two-thirds of the poor population remain trapped in poverty, despite welfare assistance or increased employment opportunities.
Kaviani also pointed out that the poverty line in Alborz and Tehran provinces exceeds the minimum wage. She noted that the average poverty line per capita per month is approximately 850,000 tomans, which only covers the cost of food. Other expenses need to be considered in addition to this amount.
In a separate statement, Vahid Mahmoudi, an economist and professor at the University of Tehran, informed the Tejarat News website that “40 percent of Iran’s population is below the absolute poverty line.” He dismissed claims that absolute poverty does not exist, emphasizing that the Seventh Development Plan lacks the intention to reduce poverty.
According to regime officials, more than seven deciles, or nearly 70 percent of Iran’s population, receive subsidies, indicating the rapid spread of poverty, whether absolute or relative. Over the past four decades, various factors have contributed to the sustainability and increase of poverty.
One of the primary sources of chronic and detrimental “unjustified inequality” in society is the political system of the regime, which manifests itself through the presence of the military, security forces, and various regime institutions.
These factors have led to corruption and inequality within Iranian society. Inequality in Iranian society has become degrading, with the entry of security and military institutions resulting in a significant outflow of capital from the private sector of the economy.
The presence of these powerful institutions, which have access to banking resources and utilize national resources to import luxury goods, has hindered the growth of the country’s private sector. Consequently, the economy lacks the possibility of reform as long as these institutions continue to dominate.
Another crucial aspect that necessitates fundamental changes is the country’s banking system, which the regime’s media has described as a “cancerous tumor” within the economy. Mohammad Reza Naqdi, the deputy coordinator of the Islamic Revolutionary Guard Corps (IRGC), claimed that the IRGC’s entry into the economy was not driven by profiteering motives but rather a desire to assist the people. But the reality is showing something else.
It is worth mentioning the Khatam al-Anbia base, an economic arm of the IRGC that currently holds the title of the “largest contractor” for government projects.
The country’s tax system is another detrimental aspect that afflicts the economy, with the regime’s officials, entities, and supporters, who are typically wealthy, evading taxes altogether. This unjust inequality affects all citizens, especially the younger generation, and hampers their opportunities for growth.
The regime’s 2024 budget aims to generate 50% more revenue through taxes compared to the previous year, indicating a significant increase. This exacerbates the inequality further, as taxes for this year had already risen by at least 61% compared to 2022.
The lack of investment in Iran is another factor that has accelerated the economic deterioration. Budget imbalances have played a significant role in causing widespread inflation, and the regime’s latest data shows a rising inflation trend. These factors deplete resources that should be allocated to economic growth and investment.
The 2024 budget is unlikely to resolve the bottlenecks in Iran’s economy, as this is a complex and lengthy process. The regime appears to be employing subsidies to conceal the increasing poverty levels.
The most severe consequences of poverty are observed in the labor force, as poverty affects education, healthcare, and basic skills. Consequently, Iran’s labor force is expected to weaken, leading to disruptions in the country’s production foundation.
The labor crisis and the mass migration of skilled workers to neighboring countries have impeded economic growth. Consequently, a contraction of Iran’s economy can be anticipated, along with a further deterioration in the distribution of resources, resulting in increased discrimination.
Poverty diminishes the quality and quantity of capable human resources, leading to a vicious cycle of poverty that perpetuates and deepens its reach.
It is obvious that a comprehensive solution within the current regime is not possible while the regime’s behavior does not show the necessitated structural transformation and the establishment of a balanced relationship with the world. And the best aspect for this is the regime’s destructive support of various tensions and war in the Middle East.
