The Classification of Iranians Will Change, Shadow of Poverty Looms Over the Country

The Islamic Republic intends to make fundamental changes to the classification of households under the pretext of 'justice in payment' to make subsidies more targeted. According to ISNA news agency, these changes are based on the examination of data and household per capita income, such as individual and family salaries, vehicle ownership, bank accounts and transactions, SATNA and PAYA accounts, stock market activities, etc. Some experts believe that the government is trying to cover part of the society that is suffering from severe poverty by increasing subsidies while simultaneously removing a significant portion from the subsidy payment scheme. The newspaper 'Donya-e-Eqtesad' has also reported that some individuals have high account turnovers due to their job conditions, placing them in a higher classification during household economic assessments. The government's insistence on making changes to the classification came after an increase in the number of households below the absolute poverty line forced it to pay more subsidies to lower income brackets, which exacerbated the government's budget deficit. The livelihood subsidy entered the Iranian economy in the fall of 2023, and according to the Planning Organization, 18 million households, totaling 60 million people, were eligible for livelihood assistance for food procurement. At that time, Hossein Mirzaei, spokesperson for the 'Support Scheme Identification Headquarters', stated that '82.1% of households in Sistan and Baluchestan, 79.2% of households in North Khorasan, 78.4% of households in South Khorasan, and 57.2% of Tehran households received livelihood support baskets.' As poverty intensified in the country and inflation continued to rise, the government unveiled new subsidies, which experts deemed ineffective in increasing people's purchasing power and warned of their inflationary consequences. The severity of poverty in Iran reached a point where the director of the 'Support and Empowerment Affairs Office' of the Ministry of Cooperatives, Labor, and Social Welfare announced in May that in April, 600,000 tomans were deposited into the accounts of heads of households with pregnant mothers or children under 2 years old in the first to third income brackets as part of the 'Yasna' plan. In this context, the newspaper 'Shargh' reported that two simultaneous events in Iran's economy, rising inflation alongside declining social welfare, have further widened the class gap. This government approach faced criticism from economic activists, and on December 4, 2023, Pedram Soltani wrote on his social media account: 'What does it mean that 93% of people have been deemed eligible for subsidies by the government? Has poverty reached the tenth income bracket?' The website 'Tejarat News' also reported that Asgariyan, the deputy minister of welfare, stated that 'the percentile classification is based on the same bracket. Brackets may shift, but this does not mean the termination of their subsidies.' Tejarat News quoted this official as saying: 'With a change in brackets, a household may move to the 92nd or 93rd percentile, which still qualifies for subsidies, but if they move above the 92nd or 93rd percentiles, they will be removed.' These actions by the Ministry of Welfare are in response to increasing poverty, which the Research Center of the Parliament also addressed last year in a detailed report stating that the poverty rate in Iran has increased from 19% to over 30% in the past decade. The report indicated that the poverty gap, measuring the distance of the poor from the poverty line, reached its highest level of 27% in the years 1399 and 1400. Independent experts believe that the lack of a scientific and practical economic program, the existence of sanctions, non-developmental expenditures by the Islamic Republic from Iranian resources, including funding for groups and proxy militias in the region, and a focus on nuclear energy instead of balanced economic development are among the factors that have intensified poverty and diminished the economic power of the country and its people.