The share of people living below absolute poverty line from the total population stood at 15% from the fiscal 2013-14 to the fiscal 2017-18, but it hit 30% in two years, i.e., from the fiscal 2017-18 to the fiscal 2019-20.
The poverty line has increased to 110 million rials ($392) in the current Iranian year (2021-22) while a worker’s minimum wage is less than 40 million rials ($142), reported the Persian monthly Ayandenegar, a publication of Tehran Chamber of Commerce, Industries, Mines and Agriculture.
Poverty in today’s Iranian economy is like a dead end; it is impossible for the people struck with such poverty to get out of it soon. The social consequences of poverty trap, which the society cannot break free in the long run, have raised the alarm for policymakers.
Statistics paint a grim picture of poverty and marginalization in Iran. Majlis Research Center, the research arm of the Iranian Parliament, says households falling into the first and second income deciles are highly unlikely to improve their situation.
The devaluation of wages has contributed to the poverty of those in first, second and third income deciles despite the employment of heads of households. Thousands of jobs are available for heads of households in the first to third deciles. Poverty is deepening for deciles with low skill diversity.
Official studies show the population of people living below poverty line has doubled from 2017-18 to 2020-21.
According to the Ministry of Cooperatives, Labor and Social Welfare, 26 million people lived in absolute poverty by 2020-21. Per capita poverty line was 27.58 million rials ($98) for a three-member household and 33.85 million rials ($120) for a four-member household.
Given that the poverty line increased by 38% to reach 12.54 million rials ($44) in 2020-21, nearly two million people were expected to drop out of labor market by March 2021 and the number of people living in absolute poverty was expected to increase from 26 million to 30 million people. This means 10 million households live below poverty line, i.e., one out of three Iranian people.
Estimates show that 30% of the Iranian population has slipped under poverty line from the fiscal 2001-2 to fiscal 2019-20, and the poverty line has increased from 9.8 million rials ($35) in the fiscal 2011-12 to 100 million rials ($356) in the fiscal 2020-21.
According to the head of the Imam Khomeini Relief Foundation, from the fiscal 2001-2 to the fiscal 2019-20, i.e., over 18 years, household expenses saw a 22-fold increase.
Also, the average annual growth of the absolute poverty line was equal to 20% and the value of this index has increased by more than 27 times during the period under review.
The share of those living below absolute poverty from total population stood at 15% from the fiscal 2013-14 to the fiscal 2017-18 but it hit 30% in two years, i.e., from the fiscal 2017-18 to the fiscal 2019-20. The poverty line has increased to more than 110 million rials ($392) in the current Iranian year (2021-22) while a worker’s minimum wage is less than 40 million rials (142.6).
Over these years, the share of cities vis-à-vis the population of people living in absolute poverty has reached 15.5%. What’s worse is that one-third of Iranians living in rural areas has lived in poverty for the past 18 years, suggesting that migration from rural to urban areas and the growth of marginalization have accelerated over the period.
Marginalization
Different statistics have been published on the number of marginalized people in Iran. However, no official or expert denies the fact that the situation of marginalized people in the country is critical.
“The country has become vulnerable in 10 areas, including marginalization. As we speak, marginalized population account for more than 25% of Iran’s population,” Farshad Momeni, an economist, says.
Former interior minister, Abdolreza Rahmani Fazli, said in 2016-17 that 11 million people were living in 2,700 neighborhoods in outlying areas. The number of these neighborhoods has now increased to more than 3,000 and their population is estimated to exceed 11 million people.
Marginalization is one of the direct consequences of poverty in Iran, which poverty has deepened over the years, thanks to various economic shocks.
The poverty line has followed an uptrend since the fiscal 2018-19. Inflation not only threatens the wages of heads of households in the low-income deciles, but also doubles the value of assets of rich people which in turn paves the way for discrimination and social unrests.
Rising social dissatisfaction, delinquency and divorce, as well as declining marriage rates, productive population and lack of minimum living standards are direct consequences of poverty.
Centralized policymaking and planning at the macro level are required when it comes to fighting poverty. The growth of marginalization has pushed more than 11 million people to geographic areas vulnerable to natural disasters and crises such as earthquakes and floods.
According to Mohammad Saeed Izadi, former deputy minister of roads and urban development, there are 11 million marginalized people, in addition to eight million people living in slum areas of Iran. Over 20 million of the country's population are living in areas that are at great risk of natural crises like earthquakes, storms and floods.
The outbreak of Covid-19 has also worsened poverty in Iran. A deputy health minister recently said 612,000 people have fallen below the poverty line this year due to the crippling costs of treatment.
