$5.3b to Help Tackle Unemployment

The Central Bank of Iran is set to provide 200 trillion rials ($5.3 billion) to boost employment in the country in an agreement with the Ministry of Cooperatives, Labor and Social Welfare.

According to Cooperatives Minister Ali Rabiei, based on the agreement, 1 trillion rials ($26 million) would be allocated for job creation in the first three months of the scheme, and 4 trillion rials ($105 million) will be extended to Kaaj scheme—a program laid out by President Hassan Rouhani for tackling the galloping unemployment rate–currently at 12.6% --through vocational training.

A portion of the money–at 1 trillion rials ($26 million)–will be allocated in the form of cash subsidies.

"However, we believe that injection of cash is not the solution," Rabiei was quoted as saying by IBENA at the 8th meeting of the working group on employment and investment in Khorasan Razavi Province on Wednesday.

According to the Statistical Center of Iran, the youth unemployment rate, i.e. the proportion of population of ages between 15 and 29, stood at 26.4% in spring, indicating a 1.5% rise compared with last year’s corresponding period and a 0.9% increase compared with the previous quarter.

Rabiei said addressing the unemployment problem is not just a matter of providing working capital for businesses and that many of the production woes can be traced to "technology, marketing, sales and raw materials".

Earlier on Tuesday, the minister attended a ceremony in which the 1,500th house was allocated to a special-needs family based on a plan to grant homes for families with more than one disabled child.

 He pointed to creation of jobs and poverty alleviation as two priorities of the next Cabinet of President Hassan Rouhani, which will be formed in early August.

In line with housing issues, Rabiei said the government's preference had been to first complete the Mehr Housing Plan and then to execute its own signature plans, including the Social Housing Plan.

In 2007, former president, Mahmoud Ahmadinejad, offered free land and cheap credit to contractors to provide two million low-income Iranians with housing units.

"The program called Mehr Housing Plan, which was a direct, vast and unprofessional intervention of the government in the housing sector, had no outcome but an excessive supply of housing units," Roads and Urban Development Minister Abbas Akhoundi said.  

Social Housing Plan is a subcategory of the government’s Comprehensive Housing Plan, which incorporates programs to provide low-income groups and those covered by state charities like the Imam Khomeini Relief Committee and State Welfare Organization of Iran with affordable housing.

Akhoundi announced this week that residents of distressed urban areas and informal settlements, along with first-time homebuyers, are first in line to receive home loans.