Sowlat Mortazavi, the Minister of Minister of Cooperatives, Labour and Social Welfare of the Iranian regime, stated on August 20, “A significant portion of absolute poverty has been eradicated.” This claim is made while in June, the Majlis (Parliamentary) Research Center reported that approximately 11 million more people have been added to the country’s poverty-stricken population between 2011 and 2021.
According to the Majlis Research Center’s report, the poverty rate in Iran has been on an increasing trend since 2006, and since 2018, more than 30 percent of the Iranian population has become poorer.
Shortly after the release of the Majlis Research Center’s report, Mohsen Pirhadi, a member of the Majlis, also warned about the increase in the population below the poverty line, stating that this population is 28 million people, a statistic that occurred following the rapid growth of inflation, followed by a significant number of people in the country falling below the poverty line. The population of Iran is currently 88 million.
Although the announced statistics are general and not distinguishable in terms of how many Iranians have fallen into poverty and absolute poverty simultaneously with the increase in the inflation rate, some critical economists, including Hossein Raghfar, believe that the number of poor people in Iran is higher than the reported figures.
Raghfar has stated, “It does not seem that the number of people who have fallen into absolute poverty today is less than 50 percent of the country’s population.” According to him, these individuals do not even have the minimum necessities of human life.
Extreme poverty, as defined by the World Bank, refers to conditions in which individuals are unable to meet basic needs such as food, clothing, and shelter.
The World Bank has recognized a daily income of less than $1.90 as the global poverty line.
Based on this definition, the continued growth of inflation and the significant gap between wages and inflation have made living conditions more difficult for the people of Iran. Incomes have not experienced significant growth, while the inflation rate continues to rise. As a result, individuals who may have been above the poverty line at the beginning of the year have fallen below the poverty line due to monthly inflation in the final months of that year.
Free fall below the poverty line
Livelihood and shelter are among the most fundamental factors that determine the poverty line. In a report titled “Poverty Monitoring” published in January, the Social Welfare Studies Office of the Iranian regime’s Ministry of Labor announced that by considering a food basket providing 2,100 calories as the threshold of the poverty line, more than half of Iran’s population received less than the minimum specified calories between the years 2017 and 2021.
According to the same report, the average poverty rate in Iran has increased by 10 percent over four years, reaching 30 percent from 20 percent. The poverty monitoring report estimates the poverty rate in rural areas to be over 35 percent. This means that living conditions in rural areas are significantly more challenging than in cities.
If the Majlis Research Center’s report is added as another official document to the data on the increasing poverty of the Iranian people, 30 percent of the population, approximately 28 million people in Iran, have not had access to minimum facilities such as food and shelter since the beginning of 2021. These statistics indicate the worsening poverty of Iranians over the past decade.
Since 2021, the Iranian economy has experienced two more waves of inflation. As a result of these conditions, life for individuals below the poverty line has become even more difficult, and more people have fallen below the poverty line.
The first wave of inflation occurred simultaneously with the removal of preferential currency and was followed by an increase in the exchange rate, which raised the inflation rate to over 40 percent by the end of 2021. The second wave of inflation in 2022 pushed the inflation rate to around 70 percent by the end of the year.
The effects of these two waves of inflation have led to a 2.5-fold increase in rental prices in just one year.
According to statistics from the regime’s Central Bank, over 37 percent of urban households in the country are renters, and rental costs constitute the largest share of their expenses. This means that alongside the increasing inflation rate, this segment of the population has faced additional pressure, and their descent into extreme poverty has accelerated.
The Majlis Research Center has confirmed that tenants are forced to reduce other expenses, particularly their food consumption, in order to afford rental costs.
The future is uncertain for 28 million people.
It is not only “absolute poverty” that is concerning; the poverty line has moved at an accelerating pace over the past five years.
The extent of the expansion of the population at risk of poverty and absolute poverty in Iran is so significant that Ali Aghamohammadi, the head of the economic group in the office of regime’s Supreme Leader, Ali Khamenei and a member of the Expediency Discernment Council, stated on May 18, “At least 19.7 million people in Iran are deprived of basic amenities such as housing, employment, education up to 12 years, health, food, and clothing.”
In the past two years, along with the increasing inflation rate, there have been numerous reports highlighting the poverty line. Some unofficial reports state that the poverty line in Iran reached 200 million rials (approximately $400) at the end of last year and has increased to 300 million rials (approximately $600) this year.
It is worth noting that the minimum monthly salary of wage earners in Iran is approximately 80 million rials, meaning a mere $155.
Furthermore, inflation reached 68.6 percent this March despite a minimum 27 percent increase in wages. This gap between wages and the inflation rate has resulted in more people falling into absolute poverty.
Given these official statistics and figures, it is unclear on what basis the Minister of Labor of the Iranian regime has made such a claim.
