Posts

, , , ,

Hope for Iran’s Impoverished With Potential Lifting of Sanctions

Iran's ImpoverishedIn the past decade, Iran’s impoverished have floundered due to an overwhelming bombardment of economic sanctions. Documented human rights violations and insincere promises to slow its uranium enrichment program have garnered the Iranian state’s pariah status. Iran’s tumultuous relationship with the West has only worsened following President Trump’s decision to abandon the multilateral nuclear agreement and impose harsher sanctions in 2018. Forced to pay the price of their government’s politics, Iranians have found themselves virtually isolated from the West. With the potential lifting of sanctions, hope is on the horizon for impoverished Iranians.

Potential Lifting of Sanctions

Iran’s reintegration into the international economy may be coming sooner than expected as the Biden administration has made concerted efforts to restore the nuclear deal and implement some stability in the region. Following initial negotiations, Iranian chief of staff Mahmoud Vaezi proclaimed to state media that more than 1,000 sanctions would be lifted. “An agreement has been reached to remove all insurance, oil and shipping sanctions that were imposed by Trump,” said Vaezi on June 23, 2021. With the lifting of sanctions, Iran’s impoverished will see their economic outlooks drastically improve.

Loss of Jobs

While U.S. sanctions are intended to target the hardliner regime, Iran’s most marginalized communities have paid the biggest price. Iran’s energy, shipping and financial sectors have been completely stifled, causing essentially all foreign investment to dry up. President Trump explained that the strict sanctions “intended to bring Iran’s oil exports to zero, denying the regime its principal source of revenue.” Since 2018, Iran’s gross domestic product (GDP) has shrunk by nearly 15%. In addition, the unemployment rate has risen to nearly 20%. Unsurprisingly, the IMF reported zero growth in Iran’s economy in 2020.

Economic Downturn

The stagnancy of the economy can be felt everywhere, most notably in the rapid devaluation of the Iranian currency. The reinstatement of sanctions in 2018 has caused the Iranian currency to lose 50% of its value against the U.S. dollar. As a result, the rial (the Iranian dollar) is increasingly worthless. The effects of such extreme inflation have been disastrous, to say the least.

While the regime and its key supporters have been able to subsist due to rampant corruption, Iran’s most impoverished citizens have not been so fortunate. In Tehran, it is commonplace for the children of Iran’s impoverished to wait in a government-subsidized queue for free food. Parents simply cannot afford to feed their children at home due to the rapid increase in daily costs.

The costs of essential items such as meat and vegetables have more than doubled. Equally concerning, the price of healthcare has skyrocketed. Iran’s impoverished have no resources to access affordable healthcare, unable to pay the rising medical prices for tests. Even the prices of tobacco have increased by nearly 80%.

Reactions to Vaezi’s Claim

Understandably, Iranians were ecstatic upon hearing Vaezi’s claim that the infamous sanctions would be brought to an end. However, the U.S. has since denied that an official agreement has been reached. An unnamed spokesperson for the U.S. has emphasized that “During negotiations of this complexity, negotiators try to draft text that captures the main issues, but again, nothing is agreed until everything is agreed.” While there is still work to do, it seems that the conversation between the two countries is headed in the right direction, bringing the hope of reduced poverty in Iran.

– Conor Green
Photo: Flickr

, , ,

Reasons and Solutions for Poverty in Iran

Poverty in Iran

Poverty in Iran has been fluctuating over the years. There are many reasons for this, but also many solutions that the government, citizens and other countries can take to make changes and help those in poverty. The current population of Iran is around 82 million, and in 2017,  28.40 percent were unemployed youth.

According to a World Bank study, poverty in Iran is estimated to have fallen from 13.1 percent to 8.1 percent between 2009 and 2013. This was most likely because of a universal cash transfer program in late 2010 that focused on eliminating the subsidies on energy and bread. However, poverty is still a major issue. According to another World Bank study, poverty increased again in 2014 and declining social assistance could be a potential reason.

Poverty in Iran is not only affecting citizens’ ability to afford basic necessities, but is also causing negative issues related to mental health, including suicide, in Iran’s youth. Regardless of all the causes of poverty, there are actions being made to make changes.

Income Gap Causing Problems

Unemployment is a major problem in Iran. Many individuals are working more than one job to afford basic necessities and pull themselves and their families out of poverty, while others are barely working at all. According to an Iranian economist, “there are currently 3.3 million jobless people in the country.” This is due to the increasing income gap between the rich and the poor. The minimum wage jobs of many individuals with lower incomes can not help them move out of poverty and the wealth gap has been expanding. On top of this, there aren’t enough jobs to go around.

According to World Bank statistics, unemployment in Iran was 11.26 percent in 2016, 11.06 percent in 2015 and 10.57 percent in 2014. There is hope that the unemployment rate will keep going down by creating more jobs and having the government adopt new approaches to pull individuals out of poverty.

In 2017, President Rouhani stated that his government wants to prioritize reducing unemployment and creating around 900,000 job opportunities per year. On the other hand, Labor Minister Ali Rabiei said that realistically his government can create 300,000 to 400,000 job opportunities annually.

Sanctions Hurt the People Too

U.S. sanctions imposed on Iran don’t only affect the politicians but the citizens too. Sanctions are seen as one of the major causes of food insecurity, mass suffering and eventual high poverty rates. According to The Economist, 75 million Iranians are suffering from the U.S. sanctions imposed on them. Oil, for instance, is the largest source of income for Iran. When there is no oil coming, there are no U.S. dollars, and everything purchased in Iran is with U.S. dollars. With no U.S. dollars, the value of Iranian rial is falling drastically, causing many companies to go bankrupt. Therefore, they have to let a lot of employees go.

The World Bank released a report on the economic improvement in Iran and stated that many of the economic developments in Iran are due to the removal of the sanctions over the country’s nuclear energy program enforced in 2016. Removing the sanctions will make living conditions for Iranian citizens in poverty less difficult. However, as of November 2018, the U.S. is imposing the sanctions again and informing and requesting all other countries, including India, China and the European Union countries, to stop working with Iran. With reinforced sanctions that were in place before 2016, there is a lot of unrest and fear among citizens for more unemployment and more people going into poverty.  

Action to Reduce Poverty

Poverty in Iran can be seen as a major issue, exasperated by the upcoming sanctions on businesses and oil in the country as well as the increasing gap between the rich and poor in society.  However, statistics show that creating jobs and removing sanctions can significantly improve the lives of Iranians living in poverty. Communication is key to global change.

– Negin Nia
Photo: Flickr