Poverty is defined as the lack of “reliable and sustainable access” to basic necessities of life, which include: healthy and sufficient food and drinks, clothing, housing (including water, electricity, and heating), education, healthcare, and communication. Therefore, temporary and unreliable access to these necessities does not classify individuals as living above the poverty line. Having enough food for a few days or months does not mean that individuals do not face challenges in terms of food security.

The necessities of life in today’s world are not just the essentials for survival from one day to another, but they are necessary for the continuation of life with dignity and respect. In today’s circumstances, without public education, universal healthcare, and the ability to move and communicate, this dignified life cannot be guaranteed. Therefore, economists do not limit the measurement of a person’s needs to only 2000 calories per day or winter clothing and a roof over their head.

Absolute poverty and relative poverty in Iran.

Economists and sociologists focus on social inequality and poverty to distinguish between two situations: being in a state of death (lack of access to basic necessities) and not living a normal and prosperous life. They divide poverty into absolute poverty and relative poverty. This distinction also applies to policy-making and election campaigns.

Taking into account this distinction, we come to two different categories in terms of statistics about Iran. The common denominator of reports by government and non-governmental economists in 2013 regarding relative poverty for a family of four in urban areas was 1.4 million tomans, and in rural areas was 840 thousand tomans. In 2013, this figure was not announced by government institutions, but the lowest figure for the previous year was announced by the head of the Competition Council as 980 thousand tomans for urban households and 580 thousand tomans for rural households (Khabar Online, July 1, 2012). By adding approximately 40% inflation, we will reach the mentioned numbers. Some university researchers had announced the poverty line for urban households as 1.5 million tomans in 2012 (Hossein Raghefar, Etemad, May 6, 2012).

In 2010, it was announced that 10 million people in the country were living below the absolute poverty line and 47 million people were living below the relative poverty line (Head of Statistics Center, ISNA, May 27, 2010). These numbers must have increased in the past three years due to the unemployment crisis and recession in the country. Based on these figures, approximately two-thirds of the country’s population live below the poverty line.

Inevitable poverty or escapable poverty

Poverty in Iran is inevitable for many social classes because the national economy does not have the necessary capacity to create jobs. It is not that there is not enough work in the country and people refrain from going to work or do not have the necessary skills to do the work. Poverty is the inevitable fate of many people who are born in certain places or families. In addition, poverty in Iran is not just seasonal (widespread among people due to droughts or other natural factors) or situational (poverty caused by structural issues and limited to a specific group).

Mass poverty: A debt of 1000 trillion tomans.

Hashemi Rafsanjani, in one of his critical speeches towards the Ahmadinejad government, revealed a long kept secret. He openly announced the amount of government debt: “Currently, the government owes the people 500 trillion tomans. Additionally, 200 trillion tomans to banks, 50 trillion tomans for participation papers, and 200 billion tomans for unpaid wages of companies and contractors.” (Mehr, 7 Ordibehesht 1392) This means that every Iranian citizen (assuming a population of 76 million) currently has a debt of around 13 million tomans within the framework of the government.

At the beginning of Ahmadinejad’s government in August 2005, the government’s debt to banks and financial institutions was only 3 trillion and 174 billion tomans, which over the course of seven years increased 64 times to approximately 200 trillion tomans at the end of last Azar month.

The reasons for this alarming increase in government expenses include excessive spending and money laundering, foreign aid for satellite development, military interventions in the region, and the pursuit of a very costly nuclear program. For example, according to the International Monetary Fund’s report from 2005 to 2013, the Iranian government has increased its annual expenses by an average of 21%, which is more than 5% higher than the official inflation rate during this period, despite a slow economic growth rate. Additionally, government expenses in Iran have risen from 30 trillion tomans in 2004 to 151 trillion tomans in 2013. (Khabar Online, April 16, 2013)

Negative economic growth and corruption

The poverty situation becomes more severe when economic growth reaches zero or a negative number, while inflation is also above forty percent and income growth does not reach this level: “Despite the high inflation rate, the purchasing power of workers has decreased by 60 to 70 percent.” (Mohammad Ahmadi, member of the Supreme Council of Labor, Mehr, August 2, 2013) According to government sources, economic growth reached a negative 5.4 percent in 1392 (2013-2014).

One of the factors that have contributed to the increase in poverty in society, apart from the decline in economic growth, is structural corruption in the public sector (government, state and municipalities), especially in the past eight years. In the area of corruption, the Ahmadinejad government has set new records in the disappearance of oil revenues (up to 12 billion dollars in some years), the disappearance of money in banks (33 billion dollars, Jahane Sanat, 22 January 2013), excessive spending, low-interest bank loans that have not been returned or paid (up to 70 trillion tomans), and vote-buying, which amounted to 9 trillion tomans in 2009 (Ali Asghari, Khabar Online, 9 December 2012).

Renting instead of buying a house.

The statistics announced by the National Union of Real Estate Consultants indicate an increase in the number of housing rental contracts in the country. In 2012, more than 547,000 rental contracts were signed, which is an increase of over 56% compared to 2011. In 2011, approximately 350,000 rental agreements were registered in the country, which is an increase of 50,000 compared to the previous year.

In comparison, in the past four years, the rental contract has had the lowest amount of registration in 88 and this statistic has reached its highest level in the past year. During the years 88 to 91, 91 was the year with the most registered rental contracts. There are multiple reasons for this increase, including population growth, increase in marriages, and migration to major cities (ISNA, April 18, 2013) while people have gradually lost their purchasing power.

Breaking the back of medical expenses.

In Iran, incurable diseases such as diabetes and cancer have been on the rise in society: there are seven million diabetic patients in Iran (Tabnak, November 15, 2012); cancer is the third leading cause of death after cardiovascular diseases and accidents, with 85,000 cases being diagnosed annually. (Etemad, July 24, 2012)

The costs of treating diseases that require surgery and hospitalization, as well as incurable diseases, have increased to the point that patients have to sell all their savings or even their homes for treatment. “In the past year, the tariffs of various hospital departments have seen a worrying increase, to the point that in the health sector, tariffs of government hospitals have increased by about 53% and private hospitals by about 70%.” (Deputy Chairman of the Health and Treatment Commission of the Parliament, Mehr, April 19, 2013)

In the years 88 to 89, statistics showed that approximately 2.5 to 4 percent of the country’s population, who were unable to afford the high costs of treating serious illnesses, were forced to sell their belongings and fall below the poverty line. This number reached 7.5 percent in the years 90 to 91. This has resulted in the decline of 6 to 7.5 million people from the total population of the country due to the alarming increase in treatment costs, pushing them below the poverty line. (Mehr, 31 Farvardin 1392)

“The medical fees for general practitioners in the public sector this year have increased by 400% compared to the fees in 1383, while the fees for general practitioners in the private sector have increased by 700% in comparison to 1383… The fees for general practitioners in both the public and private sectors have increased by 550% from 83 to 92, specialists by 757%, subspecialists by 881%, and psychiatrists by 1126%.” (Shargh, 1 Ordibehesht 1392) These costs, which families are forced to pay and even if they have insurance, the insurance only covers a portion of them, also decrease the purchasing power of households.

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If we consider the three categories of topics mentioned in this text, namely structural causes of poverty (such as government debt, negative economic growth), factors leading to poverty (high medical expenses) and signs of poverty (renting instead of buying a home) in Iran, we will see that the issue of poverty in Iran is not a problem that can be easily solved. There is also no visible solution in sight. The Islamic Republic governments have never had effective policies to reduce poverty. Even the government that came to power claiming to fight poverty – the Ahmadinejad government – ultimately created even more poverty when it left. Distributive justice policies have only led to the distribution of poverty.