Funds From Subsidy Cuts to Tackle Poverty

Funds From Subsidy Cuts to Tackle PovertyFunds From Subsidy Cuts to Tackle Poverty

Funds raised by slashing subsidies will be allocated to tackle poverty and provide food assistance to needy families,” Minister of Cooperatives, Labor and Social Affairs Ali Rabi’ie said.

He regretted that the State Welfare Organization (SWO) is not “socially-oriented” necessitating corrective measures, reports IRNA.

Introvertism mostly among juveniles, teens and youths in their 20’s especially in big cities, the rising mental disorders in women, lower age of illicit drug abuse and abandoned children are the main social maladies that need to be addressed with public support and cooperation. Social media, broadcast media and greater investment can help bring about social change and strengthen moral values.

“We will establish community service by the people which will be a huge step forward,” he added.

Rabi’ie said the scope of SWO work is not confined to disabled people, single mothers and people with mental disorders, but it also addresses other social vulnerabilities. He called for people and media collaboration and said support and assistance can be voluntary. Everyone from doctors to housewives can participate in social empowerment. “Last year, the SWO had a $341 million budget and managed to raise $215 million from public contributions,” he added.

The minister expressed concern over the increasing number of drug addicts, the lower age of drug abuse and change in the pattern of narcotics use to industrial drugs. More rehabilitation centers and emergency units are to be set up to redress the situation. Employment of rehabilitated addicts, food support and poverty are areas in dire need of public support.

Apart from the SWO and adoption agencies dealing with abandoned children, it is necessary to devise programs to provide relief to poor families and empower them to raise their children.  However it will require greater effort, more investments and stronger public support.


Since 2010, the multi-billion-dollar food and energy subsidies have been cut gradually by the government on the grounds that the costs are prohibitive, and instead cash subsidies (450,000 rials per month for each Iranian) are paid to almost all Iranians.

After taking office in the summer of 2013, the Rouhani administration announced that the cash payments too are unaffordable and urged the better off to voluntarily not register for the cash payments.

The government says the money saved from the so-called ‘targeted subsidy program’ is being used for development plans, creating jobs for the army of unemployed and help improve the quality of life of those at the bottom end of the economic ladder.

Recent reports have it that several million people will also be removed from the cash subsidy list in the near future because their total (household) incomes are enough to provide for their needs.


Social and economic experts from across the political spectrum insist that the whole idea of paying cash subsidies that commenced during the tenure of former president Mahmoud Ahmadinejad was not a good idea and saddled the government(s) with added financial burden. They say that the huge amounts should instead be used for genuine development programs and healthcare.

Over the years, especially since last summer when global oil prices plunged to unprecedented lows (from $120/barrel to $58 now) it became apparent that the reported $20 billion cash subsidy bill is all but sustainable.

Senior government officials regularly tell public rallies and the press that with oil revenues cut by more than 50% the controversial cash handouts cannot continue for long and people should learn to live within their means. They, however, stress that the poor and needy households will receive the cash subsidies along with the recently introduced ‘food packages.’