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Poverty in Iran

As Iran is currently at the epicenter of geopolitics and regional conflicts in the turbulent Middle East, the country’s role in international affairs is steadily growing in importance. Moreover, the Iran nuclear deal is also revitalizing Iran’s presence and significance on the global stage at the same time.

The Current Situation in Iran

According to the World Bank Group, Iran’s GDP in 2017 was $439.5 billion while its population peaked at 80.6 million. On the poverty alleviation front, poverty in Iran fell from 13.1 percent to 8.1 percent between the years 2009 to 2013. Also, in the changing dynamic of its domestic politics and a new wave of secularism and liberalism brought on by a burgeoning young population in the country, addressing poverty in Iran is a very key objective for various stakeholder groups.

However, according to a report by the Independent from Dec. 2017, the economic situation in Iran appears rather bleak in some regard because food prices are on the rise and unemployment figures are at an all-time high at over 12.4 percent. Expanding income inequalities in the country are also becoming quite widespread due to major deficiencies in the taxation and welfare systems offered to the people.

How Iran’s Political Climate Could Affect Poverty

Historically, since the culmination of the Pahlavi dynasty and revolution in Iran in 1979, the country’s social and economic progress has been a vital priority. In recent years, owing to the perceived threat of its nuclear arsenal, Iran’s diplomatic relations with its western counterparts have impacted its trade and commerce majorly due to the imposition of crippling international sanctions.

Furthermore, the changing attitudes of the Trump administration are a major threat to the deal as it may be detrimental to the future economic and diplomatic recovery Iran is trying to seek. Unfortunately, the collapse of the deal could be a major hindrance to countering poverty in Iran.

The Iran nuclear deal can help greatly bolster the capacity to alleviate poverty in Iran due to the level of investment Iran could easily achieve in the future with the expansion of its oil market, given its vast and abundant reserves. Iran can boost its oil output, GDP and household incomes in the future with diminished sanctions.

Consequently, the introduction of the Iran nuclear deal was followed by noticeable economic recovery in the country with Iran’s economy growing at an annual rate of about 12.5 percent after a sizeable contraction of about 1.6 percent in the year 2015. The country hopes to maintain growth amounting to four percent annually.

Alleviating Poverty in Iran through Investment

Moreover, remediating poverty in Iran can also be achieved by increasing the level of investment and tapping into Iran’s potential. Iran is beginning to expand and diversify its industries, especially its hydrocarbon, agriculture and services sectors, and is also continuing to focus on boosting its financial and manufacturing capabilities as well. Additionally, this may help decrease Iran’s over-reliance on its oil market as prices have often tended to remain quite volatile, especially in recent years.

The government is also implementing its twentieth-year vision and sixth five-year development plan in order to focus more on market-based reforms and techniques. This strategy is targeting three important realms: economy, science and technology. The subsidy reforms orchestrated by the government will directly help reduce poverty in Iran as they aim to target price adjustment and further increase cash transfers to low-income households in the country.

Alleviating poverty in Iran shall largely depend on existing and future initiatives that involve opening up the economy further, engaging in economic and trade liberalization with its key trading partners and embarking on further domestic structural reforms.

– Shivani Ekkanath
Photo: Flickr

Five Year Development Plan
Though most of China is now urbanized, some parts of the third-largest country in the world still remain cut off from industrial society. Tibet is the western part of China, dominated by high planes and an agriculture-based economy. The region can almost be considered its own country, given that the isolated culture differs so much from that of other more populated places in China such as Beijing or Hong Kong. Not only does Tibet differ in population and culture but in poverty as well. China’s 13th Five-Year Development Plan hopes to change this.

The current President of China, Xi Jinping, has stated that getting rid of poverty in rural areas such as Tibet would be the hardest part of building a “prosperous society.” In addition to building better access to transportation, the government plans to expand access to water, the internet, education and health care.

While the poverty rate in China was measured at just about 6.5% in 2012, the rate in Tibet was a staggering 32.9% by the end of 2015. The Chinese government is now being forced to strategize and increase its efforts to support Tibet. Through many provisions in China’s 13th Five-Year Development Plan (2015-2020), Tibet will benefit greatly. Included in the Five-Year Development Plan is the Sichuan-Tibet Railway, which has recently begun construction.

The China Railway Eryuan Engineering Group states that the railway will go from Chengdu, the capital of Sichuan province, all the way to Lhasa, the capital of Tibet. This line will connect the most remote villages of Tibet with the most globally connected parts of China, making travel easier and faster. The $36 billion project will promote and increase economic prosperity, which is exactly what the Five-Year Development Plan set out to do.

Since the construction of the Qinghai–Tibet Railway increased the tourism economy of the region, the Sichuan-Tibet Railway is sure to have the same effect. This construction project will be a huge job-creator, and, with more money from tourism, government jobs and increased access to industrialized markets, the people of Tibet will have many more opportunities to escape from poverty.

Vicente Vera

Photo: Google