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Rouhani Expected to Declare War on Poverty

Earnings of the top deciles are 14 times over and above the income of the bottom decile and the government says it wants to bridge this yawning gap
President Rouhani says he remains committed to improving the quality of life of those at the lower end of the economic ladder. President Rouhani says he remains committed to improving the quality of life of those at the lower end of the economic ladder.

President Hassan Rouhani has said he will declare war on poverty and narrow the yawning gap between the haves and have nots during his second term in office that ends in 2021.

In an interview on state TV on Tuesday, Rouhani said his administration has, and will continue to, reduce the gulf between the top and bottom deciles. He pledged to eradicate extreme poverty in the country of the 80 million people by the end of his second and last term.   

Rouhani won a huge mandate in the May presidential election and has committed himself to deliver on his campaign promises made in 2013 and again this year.

“Those in the top deciles are earning 14 times over and above the bottom deciles. We want to bridge this gap,” he said in the live program.

The president did not provide details but said he will announce his administration’s precise plans to improve the quality of life “at the end of his 100 days in office.” He stressed that achieving the goal of reducing deprivation demands “collective action of all branches of government”, namely his administration, the parliament and legislature.

He emphasized his plan to create a million new jobs before the end of the current fiscal in March 2018.

“Each year, almost a million new people join the list of job-seekers.  This is while we have so far been able to create between 650,000 to 700,000 new jobs per year. Even if we are able to create 1 million new jobs this year, there will still be many who will be unemployed.”  

The high rate of unemployment (12.4%) in the last Iranian year that ended in March, has prompted Rouhani and his aides to place jobs as their top priority.

The president referred to job creation as “the first duty of the new administration” in his first address to the new Cabinet last week and called on all executive bodies to come up with workable plans to put the army of unemployed on the payroll.

Joblessness remains the Achilles’ heels of the government of which it has made no secret. Respected economists, supporters and opponents of the administration have often warned it about the “unemployment tsunami” and the frustration of millions of young people not able to find work for extended periods due to the bad economic conditions and sheer lack of local and foreign investments’.

  10 Million Below Poverty Line

According to Vice President for Economic Affairs Mohammad Nahavandian, currently 10 million Iranians live below the poverty line.

“People categorized in the bottom one and half deciles are assumed to live below the poverty line, which is set each year by the Ministry of Cooperatives, Labor and Social Welfare based on average income,” ISNA quoted Nahavandian as saying.

Hossein Raghfar, a prominent economist and university instructor who specializes in poverty alleviation and social equality, has regularly warned those in power about the negative impact of the growing poverty and economic inequality in the country that has seemingly worsened over the years.

In an earlier interview with Fararu, he said, “The intergenerational transfer of poverty is the main factor that has perpetuated the vicious cycle (of poverty) as children from poor families tend to miss proper education, and thus get low-wage jobs and continue to live under the poverty line.”

He has often questioned the mechanisms, if any, of the fair distribution of wealth and fighting corruption. “Due to the defective social structure, public and national funds  that must be used to help guarantee the wellbeing of future generations are spent on  non-productive activities by a selected few.”

Raghfar views the controversial  ‘subsidy reform plan’, introduced by former president Mahmoud Ahmadinejad to replace expensive subsidies on food and energy (about 80% of total subsidies) with targeted social assistance, as another barrier to productivity and job creation.

“Under this plan, a considerable number of households, many of whom are financially self-sufficient, receive cash from the government. This money must instead be invested on creating jobs for the low-income strata and given only to the very poor.”

The cash subsidy program annually costs the government $12.5 billion – a colossal amount gone to waste, most economic experts say. According to published reports, close to 70 million Iranians receive the monthly payments that social scientists insist is “like poison for the national economy” and must be discontinued sooner rather than later.

 

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