An Economist: Decile Classification is a 'New Shop' for the Ministry of Welfare

An economist criticized the government's economic policies in Iran, stating that the decile classification is a 'new shop' for the Ministry of Cooperatives, Labor, and Social Welfare, and that even if this ministry were to be shut down, nothing significant would happen in the country. The newspaper 'Etemad' quoted Payman Molavi, who stated that paying subsidies in an economy with high inflation is pointless, and that policies in Iran have become similar to those in Venezuela, which are ultimately ineffective. On Sunday, January 14, after media reports indicated the beginning of the removal of subsidy recipients based on the current year's budget law, the Ministry of Welfare announced a subsequent change in the decile classification of subsidy recipients to take place in six months. Accordingly, the Ministry of Cooperatives, Labor, and Social Welfare announced that at this stage, 60,000 new households have been added to the tenth decile and upper percentiles and will no longer be eligible for receiving subsidies. Cash subsidies entered the Iranian economy in December 2009, coinciding with the implementation of the 'Targeted Subsidy Law.' According to this law, the prices of sixteen goods and services, including gasoline, diesel, gas, oil, electricity, water, wheat, sugar, rice, oil, and milk, were to reach international price levels over five years by eliminating government subsidies. The government of Mahmoud Ahmadinejad initially deposited 45,500 tomans into the accounts of households to compensate for each person's purchasing power. The dollar value of cash subsidies in 2009 was nearly $43, which has now decreased to between $6 and $8. Inflation has stabilized above 40% in recent years, and the government's support policies have failed to alleviate the economic pressure on the people. The Iranian government deposits 27 trillion tomans in cash subsidies monthly into the accounts of nine deciles of society.