Economic Crisis Could Force Many Iranians into Poverty, Academic Warns

The current economic crisis in Iran is likely to force a large segment of the population into poverty, with low-income households, the disadvantaged and the middle class hit hardest, according to Reza Omidi, a university professor and researcher in social policy.

The high cost of living, escalating housing expenses, inflation, unemployment and the volatile foreign exchange market are to blame, Omidi explained. He added that while the middle class and the poor were separated by a very narrow margin, there was substantial economic inequality between the wealthiest five percent of the population and the rest.

“The top 300 wealthiest families in the country haven’t paid any taxes in the past 35 years,” Omidi said. “One of the major banks in Iran released a report a few months ago claiming that 20 of its customers owed it nearly $1.6 billion. The amount of unpaid taxes by the wealthiest segment of society stands at more than $10 billion a year. Many people avoid paying taxes using the many loopholes in current tax laws. Banks paid more than $66 billion in interest on certificates of deposits last year. The middle class and the poor didn’t receive any of the windfall.”

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According to Omidi, the U.S. Congress’ Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA) forced an additional four million Iranians into poverty. They were mostly middle-class Iranians who couldn’t protect themselves against the impact of the sanctions. Experts believe that the new wave of sanctions will push another four million people below the poverty level.

Meanwhile, the cost of housing including rent has increased significantly in the past five or six months. Conditions for most people will only worsen in the coming months, especially if the government fails to devise a comprehensive and coherent economic policy.

In Omidi’s view, the government’s discriminatory practices in the past 30 years — especially in the areas of housing, health and education — have contributed significantly to income inequality and unfair distribution of wealth.

According to the latest data, the inequality ratio between the wealthiest 10 percent and the poorest 10 percent of the Iranian population is 11 to one. The gap is five to one when it comes to food, two to one as regards health, and 60 to one in terms of education.

Translated from Persian by Fardine Hamidi