One of the indicators of the growth and development of any country is the expansion and prosperity of the middle class. The existence of a thriving middle class in any society is a key driver of economic growth and development. Governments that have properly protected and supported the middle class have been able to guide the country’s economy on the path of growth and development.
The spread of poverty, lack of development, and destruction of Iran’s middle class are pushing society towards polarization. There is a prosperous class that emerges through government control and utilizes the wealth that belongs to the general public, while the second class is impoverished. The Iranian regime is rapidly exploiting natural resources such as oil, gas, water, and land in the country.
The middle class, which has emerged through national growth and development, is being pulled towards a decline in wealth, power, and income due to the regime’s policies that stunt national production. As a result, the middle class is gradually merging with the lower classes, polarizing the society between a wealthy class of elites who benefit from the government’s resources and a growing impoverished class.
Rapid Decline of the Middle Class
International economic institutions’ assessments indicate that individuals belonging to the middle class are those who spend at least $12 per day (based on purchasing power parity in 2017).
These individuals can be found even in developing regions such as Asia and Africa, enjoying independent homes, sufficient income, adequate health standards, the ability to afford education for their children, stable employment, and a fair amount of leisure.
According to published statistics, Iran’s middle class, which once constituted 60% of the population in the 2000s, has gradually declined until the 2010s.
In recent years, the intensity of this decline has accelerated.
“The middle class in Iran is shrinking each year, joining the ranks of the lower class. The current number of the economic middle class in Iran is approximately 23 million people, constituting only around 29.4% of the country’s population. However, these official figures may the actual size of the middle class,” according to a report by Arman daily on October 24, 2023.
The Steep Fall of the Middle Class
The economic crisis and extremely high inflation rates (reportedly around 70%) have driven the middle class towards impoverishment at an accelerated pace. This poses a serious threat to the Iranian regime.
“The deepening poverty and decline of the middle class, representing the largest segment of society, can jeopardize the stability of the political system,” according to a May 31, 2023, report by the state-run Ettelaat newspaper.
On November 11, 2023, Arman daily quoted sociologist Taqi Azad Armaki as saying, “The current situation is such that we have the upper class and the lower class, and the middle class has once again returned to the lower stratum. In these circumstances, we witness the importance of the wealthy and the rulers. Large industries belong to the government (state capitalism) and they run major economic sectors, such as the automotive and petrochemical industries, the higher education system, the healthcare system, and other industries.”
Iran ranks among the most corrupt countries according to the Transparency International Corruption Perceptions Index. In 2017, Iran ranked 130th in terms of government corruption, but by 2020, it had dropped to 149th place.
In the following years, the depth and institutionalization of this corruption became so prominent that Mahmoud Jamsaz, a government-linked economist, stated, “The main issue in Iran’s economy today is not the exchange rate, but rather the rent-seeking and corruption that has been created through it, shaping a speculative economy” according to the Etemad newspaper posted on January 27, 2021.
Today, rent seekers and corrupt government elements have seized even more domains. The state-run Islamic Republican (Jomhuri-ye Eslami) newspaper wrote on December 11, 2023, “Iran is not governed by a government and ruling system; it is governed by a mafia. The mafia is stronger than the governments and officials. When the mafia takes control of a country, corruption and bribery, authoritarianism, economic exploitation, infiltration into institutions, violence and intimidation, undermining democratic processes, nepotism, and more become evident. The Islamic Republic possesses all these characteristics.”
With a brief look at this situation, it can be inferred that in the not-so-distant future, the middle class will disappear. However, the people of Iran seize every opportunity to express their protests and grievances.
