In December 2017, countrywide protests broke out in Iran in response to almost four decades of a brutal dictatorship that had presided over a deteriorating economy and an increasingly corrupt establishment. "Death to the Islamic Republic," "Death to [Supreme Leader] Khamenei," and "Death to [President] Rohani" were among the slogans that highlighted the crisis of legitimacy the regime is facing for its neglect of the people's misery. After the elections in May 2017, and most recently on January 22, 2018, in a live television interview, Rohani promised that, before the end of his second term in 2021, he would abolish absolute poverty1 in Iran. However, such promises are merely empty words. Forty years seems time enough to ameliorate poverty, the primary social concern among millions of Iranians, who have no expectation of any profound change. The severity of the situation can be seen, not only in the protests but also in the scholarly research and official and semi-official media discussed below.
Countless studies have already dealt with poverty in Iran, but very few are critical of the official data, not least due to the strict academic censorship administered by the regime's security apparatus. Official statistics often contain internal discrepancies, and there are contradictions between official and independent statistics. Thus, this research has been undertaken to make the literature more complete through critical investigation.
A TOTALITARIAN REGIME
Iran is ruled by a regime that falls entirely within Sartori's definition of "totalitarian."2 Its legitimacy is based on ideology (Shia Islam), not on free elections, empowering an elite group (Ayatollah Ali Khamenei and his followers) to pronounce on public and private matters and enforce their decisions through coercion.
Ali Khamenei replaced Ayatollah Ruhollah Khomeini as the supreme leader after the latter's death in 1989. His powers are observable within the de facto politics of the country, where the elected president and all other regime officials are permitted to act only within the scope set by the supreme leader. Although the constitution gives the president the right to select cabinet ministers, Khamenei has on several occasions intervened in this process and chosen his own preferred people. The most widely known incident was the reinstallation of Heidar Moslehi in the spring of 2011 as the head of the regime's notorious Ministry of Intelligence (VAJA) after President Ahmadinejad had ordered his dismissal.
The supreme leader's power derives from his control over the Council of Guardians, which supervises national elections; the Expediency Council, which resolves conflicts between the parliament and the Council of Guardians by having the last word in negotiations; the judiciary; the broadcast media; the military; the Islamic Revolutionary Guard Corps (IRGC); the intelligence community; the organs of law enforcement; the supreme leader's own representatives, who are placed in all governmental organizations; the Special Clerical Court, which investigates offenses within the clerical establishment; and the many bonyads (foundations) he controls.
The bonyads that the supreme leader oversees allow him to mobilize support among the poor, although the demonstrations since December 2017 may be a sign that this is becoming difficult. The bonyads have access to billions of dollars. According to Karbassian, they account for about 11 percent of the country's gross domestic product.4 Katzman estimates that number much higher, at 33-40 percent.5 The principal bonyad under Khamenei's supervision is the Islamic Revolution’s Mostazafan Foundation. Katzman claims that it "manages over 400 companies and factories, with a total value estimated by Iranian experts at as much as $12 billion, and it is considered the largest economic entity after the government."
The IRGC, over which Khamenei has immense influence, is another important player in the economic sector. A BBC report concludes that the IRGC’s share in the Iranian economy is one full third.6 At least 60 percent of the Iranian economy, according to Milani, is controlled by the Corps, and it has the capacity to conduct missions outside Iran.7
Sadjadpour asserts that the power of the regime stems from its total control of about 80 percent of the country’s economy.8 This claim aligns with Karbassian’s9; according to semi-official estimates, the private sector in Iran makes up only 15-20 percent of the economy. It is unnecessary to add that the private sector itself is controlled extensively by the state, through the intelligence community and other parts of the state apparatus and through the state officials who invest in the private sector.
OFFICIAL POVERTY LINES
The state, with Ali Khamenei as its supreme leader, controls the Iranian economy and is therefore responsible for poverty in Iran. Despite the emphasis in the constitution on the importance of eradicating absolute poverty, only in 2004 did the government take its first real step in that direction. In that year, it enacted the Comprehensive Structure of Social Welfare and Security Law,10 requiring that absolute and relative poverty11 lines be determined and that poverty be measured on a continuing basis. In 2005, the government was required to monitor extreme poverty12 by the newly adopted Social Welfare Safety Umbrella Regulation.13 The question of why it took the regime 25 years to establish these vital laws has not yet been analyzed properly, but it must be borne in mind that until these measures were adopted in 2004 and 2005 law, no adequate official assessment of the poverty line existed in Iran. Each state institution made its own estimation, usually to suit the organization’s interest; the products of these processes were therefore biased. Discussions of poverty were mainly based upon scholarly research, which is influenced by a variety of types of academic censorship, perpetuated by the Ministry of Intelligence and the IRGC, among others.
This problem did not cease to exist after the poverty-related law and regulation were introduced. The government is reluctant to publicly present a formal poverty line and related statistics; to do so would be to indicate the government’s ongoing failure. Both the Ahmadinejad (2005-13) and the current Rohani (2013-present) administrations have avoided journalists’ questions on poverty and poverty lines,14 de facto transforming the issue into a state secret. Ahmadinejad’s minister of welfare and social security, Abdulreza Mesri, even discouraged journalists from investigating why the official poverty line was not being announced publicly.15 Despite the unwillingness of the government to cooperate with the media, various sources of news inside Iran have managed to report on the state of poverty in the country, using the official statistics obtained from various state organizations, some of which are more or less independent of the government.
OFFICIAL STATISTICS
In February 2017, Mehr News Agency, reporting on statements from the head of the Imam Khomeini Relief Foundation, published a news item claiming that 11 million people — equal to 14 percent of the population — were living below the poverty line.16 The line was estimated at 8,120,000 rial per month ($8 per person per day), but what this figure means and how it was estimated were left unexplained. As reported by Bazar News, the Central Bank of Iran calculated that 16 percent of Iran’s 80 million people lived in absolute poverty in 2015, while 50 percent were believed to live below the relative poverty line.17 Khabar Online noted that the Statistical Centre of Iran estimated that 31 percent of Iranian households lived below the poverty line in 2014 (without stating whether the poverty line used was extreme, absolute, or relative), representing an increase of 6 percent over 2006.18
While such reports depict poverty clearly as a major social concern, they also show an inability to fully grasp the situation. They are based on secondary sources and give no methodological explanations of how poverty was defined and measured. Neither do they explain how or when the lines were established. These problems render a comparison over time impossible.
FAO ESTIMATES
Perhaps the closest official measures of poverty that have been clearly defined and can be compared periodically are the estimates on undernourishment in Iran by the UN Food and Agriculture Organization (FAO), based on official agriculture and trade data provided by the Iranian government.
According to the UN Global Database on Sustainable Development Goals Indicators,19 the prevalence of undernourishment was, at best, about 5 percent during the period 1991-2015. In 1991, the percentage of undernourished Iranians was estimated at 5.1 percent; and it decreased to less than 5 percent between 1992 and 1999. In 2000, the number increased significantly, reaching a peak of 6.6 percent in 2006. In 2009, the share began to decrease again, reaching 5.1 percent in 2014 and less than 5 percent in 2015.
During President Khatami’s second administration and President Ahmadinejad’s first, increases in poverty occurred from 2000 to 2008. During those years, the Iranian economy was growing noticeably. In fact, its purchasing-power-parity-adjusted gross national income, in current international dollars, nearly tripled, from 7,140 in 1990 to nearly 20,050 in 2016.20 More important, from 2000 to 2010, government revenues exceeded expenditures,21 allowing greater room to maneuver for poverty reduction.
Just when the government had more resources to fight poverty, the number of undernourished people had increased, which casts serious doubt on the poverty policies of both the so-called reformist and conservative administrations of Khatami and Ahmadinejad, respectively. This is surely one of the reasons that Iranians chanted "reformist, conservative, the end of this story has been reached" in the 2017-18 demonstrations, denoting criticism of the entire establishment. It should be added here that the past four decades have seen the Iranian population grow, from less than 39 million in the 1980s to more than 80 million in 2017. Even if the poverty rate had remained the same 5 percent, poverty increased in absolute numbers, from around 2.9 million people in 1991 to about 4 million in 2014.
THE POVERTY LINE OF $1.9
The UN Global Database of Sustainable Development Goals (SDG) Indicators has also published figures, based entirely on statistics provided by the Islamic regime, showing that poverty in Iran has decreased from 6 percent in 1990 to 0.08 percent in 2013.22 Here, poverty is measured using the international poverty line of $1.9/per person per day. However, that line as a way of measuring poverty has been contested, not least because it is not sensitive to national conditions.23
In 2005, the Ministry of Welfare and Social Security published The Estimation of the Poverty Line for 2005 (1384 in the official Persian calendar), in which it explained how the different poverty lines are estimated.24 For the first and last time in the regime’s history, it also announced estimated poverty lines for extreme and absolute poverty in both urban and rural areas. These estimates were beneath contempt, and the ministry admits that housing costs did not receive necessary attention. Nevertheless, these are official estimates and the basis for government policy; hence, they can also be used to question the validity of the international poverty line and measurements based on it.
Table 1 shows the poverty lines in urban and rural Iran for 2005 and 2013, based on the Ministry of Welfare and Social Security estimates. The ministry’s original figures in 2005 were for a single month. By dividing the line given by 31 days, I estimated the poverty lines on a per-day basis. Using data on the consumer price index for urban25 and rural areas,26 I estimate the poverty line for 2013, knowing that inflation has been deemed higher than what the regime claims it is.
TABLE 1.
Official Poverty Line in Iran per person per day
Urban |
Rural |
|||
Year |
Extreme Poverty |
Absolute Poverty |
Extreme Poverty |
Absolute Poverty |
2005 |
2.11 |
5.28 |
1.67 |
4.18 |
2013 |
2.74 |
7.11 |
2.67 |
6.67 |
Source: Author extrapolation.
Note: based on international dollars of 2011.
Using the World Bank’s data on purchasing-power parity to convert the Iranian currency to the international dollar of 2011,27 the Iranian poverty lines can be compared with the international poverty line.
The results show that the international poverty line of $1.9/PPPD did not measure the same type of poverty in Iran in 2005 and 2013 and, therefore, was not sensitive to Iran’s high inflation. Moreover, the international poverty line was closer to the extreme poverty line than to the absolute poverty line, leaving out people who lacked access to life-sustaining items and resources.
It should be added that totalitarian regimes (and dictatorships, in general) tend to manipulate data to make their governance appear beneficial. This also means that poverty in Iran may be worse than what appears in the regime’s data, not least in the data reported to the FAO. This will be clearer from the scholarly research and observations presented below.
ACADEMIC RESEARCH
According to Raghfar and Ebrahimi, absolute poverty decreased generally in Iran from 1989 to 2004, but trended upward in urban areas from 2001 to 2004 and in rural areas from 2003 to 2004.28 The authors’ estimations show that the urban poverty rate decreased from more than 40 percent in 1989 to about 20 percent in 2001, then increased again to 30 percent in 2004. In rural areas, the poverty rate was estimated to be about 50 percent in 1989, decreasing to less than 30 percent in 2004.
Arshadi and Karimi, investigating absolute poverty from 1989 to 2010, claimed that, in general, poverty had declined.29 Their estimates show that the rates of urban and rural absolute poverty decreased from 36.73 percent and 45.50 percent, respectively, in 1989, to 15.9 percent and 27.33 percent in 2010. Their estimates also show that absolute poverty increased, again, in urban areas from 2006 and in rural areas from 2005. The authors estimated the poverty rate in 2004 to be 12.5 percent in urban areas and 18.89 percent in rural areas, a much lower figure than Raghfar and Ebrahimi’s.
Djavad Salehi-Isfahani, a Harvard-educated professor of economics at Virginia Polytechnic Institute and State University, also reported an overall trend of decreasing poverty in his research. Using a poverty line of $5 per person per day, Salehi-Isfahani found that poverty fell significantly, from 19.4 percent in 1984 to 4.1 percent in 2012, reaching the same conclusion as in his previous studies, that "[t]he Islamic Revolution has been as a whole a very successful anti-poverty endeavor."30
The statistical discrepancies produced in the course of the above-mentioned studies result from the authors’ use of different definitions and poverty lines. It is indeed to be expected that scholars will have different perspectives and, therefore, reach different results and conclusions. Nonetheless, these scholars and many others base their findings on official data, without any critical assessment.31 Salehi-Isfahani’s work, in particular, should be subject to further examination, as he is one of the most prolific investigators of poverty and income inequality, publishing several articles that cover the past four decades.32 Moreover, as an active researcher and blogger, Salehi-Isfahani has influenced the work of many other scholars, who use his results without critically examining his conclusions or data.33
Salehi-Isfahani bases his estimate on the Household Expenditure and Income Surveys collected by the Statistical Centre of Iran and the Consumer Price Index (CPI) calculated by the Central Bank of Iran. He treats these data without scholarly caution, calling them "evidence."34 Salehi-Isfahani’s noncritical approach has also been noted by Hanke, a professor in economics at The Johns Hopkins University, who questions the reliability of official Iranian data:
Prof. Salehi-Isfahani simply accepts the Central Bank of Iran’s official CPI inflation rate […]. Never mind that this statistic runs counter to all serious analysis of Iran’s inflation problems. […] As I have documented, regimes in countries undergoing severe inflation have a long history of hiding the true extent of their inflationary woes. In many cases, such as the recent hyperinflation episodes in Zimbabwe and North Korea, the regimes resort to underreporting or simply fabricating statistics to hide their economic problems. Often, they stop reporting economic data altogether; or, when they do report economic statistics, they do so with such a lag that the reported data are of limited use by the time they see the light of day.35
A closer examination of Hanke’s text shows that he is clearly questioning Salehi-Isfahani’s intentions in publishing his writings:
What has puzzled me for the past few months is why Prof. Salehi-Isfahani has been so hell-bent on denying Iran’s inflation problems. But finally, in his most recent article in Al Monitor, he showed his hand, revealing his underlying thesis — the same claim propagated by the Iranian regime — that the sanctions imposed by the West have not inflicted economic damage on Iran to the extent that has been reported.
Lucas, a professor of international relations at the University of Birmingham, has also observed something political in Salehi-Isfahani’s writing, which appears to cleave closely to the regime’s narrative, although Lucas notes, "Salehi-Isfahani may not intend to take this path, but the politics of his piece means that others will do so."36
Nevertheless, neither Salehi-Isfahani nor the other scholars mentioned here account for the statistics produced by the FAO. In fact, none of them even make a serious attempt to discuss research showing poverty to be increasing, either generally or periodically. This is a problem that deserves to be highlighted, in particular because many studies and observations lead to the conclusion that poverty is on the rise.
According to Assadzadeh and Paul, absolute poverty in urban areas grew about 40 percent from 1983 to 1993.37 However, according to the same study, it decreased slightly in rural areas, and in general, the situation improved somewhat after the end of the Iran-Iraq War (1980-1988). Assadzadeh and Paul hold that the increases in poverty over the entire country were a result of worsening income inequality, a problem that persists.38
Mahmoudi argues that absolute poverty increased by about 18 percent during 1989-94 and by 4.5 percent during 1995-99, but decreased significantly, by 29 percent, during Khatami’s final administration, from 1999 to 2004.39 He adds that poverty again increased, by 34 percent, between 2004 and 2007, during Ahmadinejad’s term. This means that, according to this measure, there were about 17 million poor people in 1989, increasing by about 18 percent to almost 20 million in 2007.
Mahmoudi’s claim that poverty decreased during Khatami’s presidency has been questioned by the FAO statistics and by Khodadad Kashi and Shaikhi Tash, who deem that extreme poverty (based on the cost of 2,000 calories) increased during 2001-07, from 4 percent to 4.9 percent.40 Mahmoudi’s research, it must be noted, may have been biased by his close cooperation with the Khatami administration. This resulted in the drafting of two letters of appreciation from Mohammad Shariatmadari, Khatami’s minister of commerce (and one of the founder of the regime’s Ministry of Intelligence, who today is minister of industry, mining and trade in the Rohani administration).
Rising poverty is also noted by Raghfar, Babapour and Yazdanpanah, who studied absolute poverty and economic growth in Iran from 1984 to 2013.41 Based on official data from the Statistical Centre of Iran, the authors conclude that poverty was as high in 2012 as it was in 1984 — that is, 30 percent of the population, which, in absolute numbers, means rapidly increasing poverty due to a growing population. Their work shows that poverty significantly decreased from 1987 to 1990, remained stable from 1990 to 2001, then decreased again until 2005, and again increased by 2013, reaching higher levels than in 1984. In 2013, about 40 percent of the population was considered to be living below the absolute poverty line. The authors conclude,
. . . during the studied period, on average, 3 of 10 individuals lived below the poverty line. […] The conclusions tell us that, after 30 years, there is still no coherent plan in the country to reduce poverty and inequality.42
In 2015, Hossein Raghfar, professor of economics at Alzahra University, told the reformist Shargh Daily that absolute poverty increased from about 30 percent in 2004 to more than 40 percent in 2015.43 This statement is in line with his research, together with Babapour and Yazdanpanah, and his figure is 2.5 times higher than the percentage provided by the Central Bank of Iran for 2015, as given in the previous section. If Raghfar, who is active in the reformist camp among the regime elite, is to be believed, more than 31 million Iranians lived in absolute poverty in 2015.
SUPPLEMENTARY RESEARCH
The effects of rising poverty in Iran could be observed during the protests that broke out in Iran after December 2017, with people chanting, "The people are begging for money — the clerics are living as gods." The poverty of the people can also be observed in viral videos and photos on conventional and social media, showing not only adults and the elderly living in poverty and begging for money, but also street children either begging, cleaning car windows or selling flowers for a penny. More than 200,000 children are living on the street, defined as those who spend more time in the streets than at home.44
Another way for many Iranians to cover the rising cost of living is to sell their organs. Mostafa Eghlima, head of the Association of Social Workers, said in an interview with the magazine Zendegi-e Salem that most of those who sell their kidneys are destitute and do it for the money.45 Of 478 living unrelated donors interviewed, 79 percent were breadwinners, 29 percent were unemployed and 62 percent lived in poverty.46 In 64 percent of the cases, the donors and recipients agreed upon an additional payment above that given by the government.
Prostitution, including that involving children, is also on the rise in Iran. According to the accounts of people living in Iran with whom I have been in contact over the last decade, prostitution is becoming widespread. Saeed Madani Ghahfarokhi, in an interview by Afrozmanesh, states that many prostitutes are married women who are either forced by drug-addicted husbands to sell themselves for sex, or prostitute themselves to support their families.47 Prostitution is generally believed to begin at the age of 16 to 22 years old, though this is now decreasing.48 The average age of prostitutes in 1968 was 31 but fell to 26-27 by 2008, according to Madani Ghahfarokhi.49 The Parsine News Site reported the conclusions of Amanollah Gharayi Moghadam, the head of Iran’s Sociology Association, that 300,000 to 600,000 prostitutes can be identified in Iran.50 Thanks to the phenomenon of temporary marriage (sigheh), legitimized by the religious thinking of the Islamic regime, the number of prostitutes is likely much higher than admitted. This is especially true because temporary marriage has opened a path to legal religious brothels (Khaneh-e Efaf, House of Chastity).
The deteriorating economic situation of the last decades in Iran has been observed by the sociologist and scholar Moidfar, who published a note on his website in which he referred to the social and economic condition of the Iranian people:
During the last two to three decades, certain measures that have been taken in this country have had severe consequences for society. Today, people and families are suffering from profound and complicated problems. These problems are highly important from a quantitative and qualitative aspect, and each of them may embroil society in a very serious crisis […].51
A leading cause of poverty is high unemployment (statistics presented below), which renders it impossible for many to keep up with the rising cost of living. "When housing policies make the 30 percent of the population who lack their own housing pay double for their accommodations, over the course of a few months, some of them will be certain to fall below the poverty line," according to welfare researcher Saeed Madani Ghahfarokhi in the online platform Aftab.52 The rising share of people renting their homes indicates that more and more are vulnerable to changes in rents, incomes and inflation. Khabar Online, using information from the Central Bank of Iran, reports the share of Iranians owning their housing decreased significantly in recent decades, from 75.5 percent in 1993 and 77 percent in 1994, to 64.4 percent in 2013 and 2014.53 However, this data ends on a slight upward trend in ownership, from 60.8 percent in 2011 to 64.4 percent in 2013 and 2014.
Another factor contributing to rising poverty is medical costs. According to Madani Ghahfarokhi, relative poverty grew considerably, from 50 percent during the 1980s to 60 percent in the 1990s, reaching 70-80 percent around 2005.54 Adding that the middle class is shrinking, he uses the term "proletarianization" to describe the process of downward social mobility experienced by millions of Iranians. He states that the poverty lines given by officials have not kept up with inflation: "Iranian families have in the last two years [2005-07], due to their stagnant incomes, been forced either to live in inappropriate housing or to decrease other costs, such as health costs and visits to doctors. This is something that Iranian families have done for the last three decades."
Raghfar et al. conclude, in their study of poverty and health costs from 1984 to 2009, that "annually, a considerable number of people, both rural and urban, are driven below the poverty line by excessive health costs."55 According to a report from Mehr News Agency, about 2.5 to 4 percent were forced below the poverty line in 2009 and 2010 for this reason.56 This share increased to 7.5 percent in 2011 and 2012. That article also claims that Iranians spend 54.8-75 percent of their incomes on medical costs; the equivalent figure is about 18 percent in many other countries.
The exorbitant costs of education also deserve attention. Many Iranian parents accept these costs for the sake of the welfare of their children. Although the constitution of the Islamic Republic stipulates that education must be free through high school, parents must still pay for registration, school uniforms, books, notebooks, writing instruments and other tools such as calculators, rulers and compasses. Many schools also expect "voluntary" gifts from the parents, enforced through stiff social pressure on the children.57 Such costs only increase with the level of education. It is worth mentioning here that many universities in Iran have relatively high tuition fees, although the low quality of education is deemed insufficient preparation for the existing labor market.58 Many Iranian youths whom I have encountered privately or in the course of work have told me that they gave up their university studies because they could not pay the tuition fees, or passed the national university entrance exam several years in row, only to be admitted to a state-owned university, where the costs are lower.
The main cause of poverty in Iran, in the end, is its political system. Here I refer not only to Sen’s Development as Freedom, where he states that political participation and transparency in decision making (democracy) force states to prevent or mitigate misery.59 I stress also the security policies of the Iranian regime, which has taken advantage of destitute people to strengthen their own power within the country, mobilizing the poor in support of the regime through the provision of aid.
REJECTING DISSATISFACTION
Salehi-Isfahani rejects such observations as "faulty subjective comparisons":
Dissatisfied Iranians who complain to visitors and reporters conveying the impression of living in desperate times, are unaware of how Iran compares to other countries in terms of income and poverty. […] Most Iranians now have but a foggy memory of life before the Revolution. Lacking objective criteria to compare the quality of life in present day Iran with that in the 1970s, many depress themselves by using for comparison either an imaginary pre-Revolutionary Iran or some present-day advanced country which a distant relative calls home.60
Salehi-Isfahani’s rejection of the dissatisfaction of Iranians fails on several grounds.
First, the standard of living was growing quickly before the revolution, during the rule of Mohammad Reza Shah Pahlavi 1941-79.61 This is a reason protestors chanted slogans in support of the dynasty in the 2017-18 demonstrations. At the end of 1972, unemployment was estimated to be 1.2 percent and underemployment 2.2 percent. During the Fifth Development Plan (1973-78), the state predicted a serious labor shortage.62 In stark contrast, the official statistics of the Islamic regime show an unemployment rate higher than 10 percent from 1991 to 2017.63 Additionally, high youth unemployment also exists in today’s Iran, which puts a great deal of pressure on parents’ economic situation. Youth unemployment has been increasing since the 1990s, from almost 22 percent in 1991 to almost 27 percent in 2017.64 Salehi-Isfahani himself claimed that "[a]bout one quarter of men and half of women ages 20-24 were unemployed in 2004 […]. Since the burden of youth unemployment is borne by families who support their children well into their late twenties, economic dissatisfaction spreads to all ages."65
Poverty was decreasing rapidly during the shah’s reign. According to Van Ginneken, poverty was swiftly and substantially reduced from 1971 to 1975.66 Van Ginneken’s estimates, based on official data, show that 54 percent of all households were poor in 1971, but the number was reduced to 28 percent in 1975. The largest reduction was seen in rural areas, where poverty among households decreased from 68 percent at the beginning of the period to 41 percent at its end. In urban areas, poverty rates were 34 percent and 15 percent, respectively. Van Ginneken put the individual poverty rate in 1975 at 20 percent.
In his 2017 article, Salehi-Isfahani mentions Van Ginneken’s research in the context of criticism of the shah for not sufficiently prioritising poverty, but fails to mention the near halving of poverty from 1971-75.67 As is clear from his 2009 and 2017 articles, Salehi-Isfahani takes a firm stand against the late shah and, therefore, refuses to see the improvements that took place during the ’60s and ’70s. Under the shah, the socioeconomic basis of the country was strengthened to the point that this period still matters. Cooper appreciates this correctly:
It was the shah who invested in the technology and purchased the reactors that started Iran’s nuclear programme. He championed the social welfare state that today provides Iranians with access to state-run health care and education. He raised the scholarship money that allowed hundreds of thousands of Iranian university students, including many luminaries of the Islamic Republic, to study abroad at leading American and European universities. The shah ordered the fighter jets that made Iran’s air force the most powerful in southwestern Asia. He established the first national parks and state forests and ordered strict water, animal, and environmental conservation measures. Perhaps it is not a surprise that Iran today has the look and feel of a haunted house. The man who built modern Iran is nowhere to be seen but his presence is felt everywhere. The revolutionaries who replaced the shah may not like to hear it, but Iran today is as much his country as it is theirs.68
Second, contrary to Salehi-Isfahani’s claims, Iran has lost its position in the post-revolutionary era to other countries. This is clear not least from the global ranking of adjusted gross domestic product in purchasing-power parity per capita for different countries, based on constant 2011 international dollars from 1990 to 2013.69 Among 166 countries, Iran ranked number 52 in 1992 (the best ranking) and 62 in 2013 (the worst ranking). During most years it ranked 55 or better.
In the Human Development Index, Iran’s global position has been at best unchanged. This index shows an improvement, but the results are questionable: the index is based on the data provided by the regime and is positively affected by growth in the overall economy. However, if the rankings in the index are accepted as correct, it shows that Iran was ranked 70 in 1995 and 69 in 2015.70 Between these years, Iran was ranked 95 in 2000, 99 in 2005 and 70 in 2010.71 This means that Iran lost many opportunities for development.
Moreover, the policies pursued by the Islamic regime have resulted in international trade sanctions, reduced foreign direct investment, weak financial markets and degraded industry. Alireza Mirzaei, deputy president of Iran Khodra, Iran’s oldest and foremost car producer, told Fortune Magazine’s Ellis, "In the 1970s, Koreans regarded us as a developing-world model for their own new car industry […]. Now we are following them."72
Finally, Salehi-Isfahani disregards totally the statistics presented by the FAO, which show unchanged rates of poverty in relative terms and increasing poverty in absolute numbers. He also disregards the studies conducted by the many scholars inside Iran who, using official data, have shown a growing number of destitute people.
CONCLUSIONS
The best-case scenario, based on official data that can be compared over time, is that found in the statistics of the UN Food and Agriculture Organization. It shows that the prevalence of undernourishment was unchanged in relative terms from 1991 to 2015. Taking the growing population into account, poverty has, however, increased in absolute numbers. This has occurred as the economy was growing, giving the regime greater opportunity to maneuver against poverty.
The FAO results are also supported by the work of Raghfar et al., who, using official data, concluded that an average of 30 percent of the population lived in absolute poverty from 1984 to 2012. These scholars add that poverty increased to 40 percent in 2013, and Raghfar found the same percentage for 2015. Raghfar’s estimates for 2015 are 2.5 times higher than the statistics given by the Central Bank of Iran, making it clear that the official data and statistics should be used with extreme caution, something many scholars ignore. If the Central Bank’s statistics are accepted as factual, more than 12.5 million Iranians lived in absolute poverty in 2015, and about 40 million below the relative poverty line.
The evidence for the worst-case poverty scenario in Iran comes from observations and research that identify its various aspects (unemployment, education, health, rents and prostitution). There are many reasons to believe poverty is much more prevalent than can be claimed from the official data, and it will remain high, even if it does not continue to increase. It is evident that President Rohani cannot keep his promise to eradicate poverty by 2021; even if he has the will to do it, he does not have the power. This may be the same conclusion the Iranians themselves have reached; their call for the regime’s overthrow in the protests that exploded in December 2017 stemmed from rising poverty and the growing cost of living.
Iran lacks a comprehensive and coherent plan for combating poverty, something that Raghfar et al. also note briefly. Why does such a plan not exist, especially after almost four decades of a totalitarian regime? One repeated argument is the poor management and administration of the state apparatus. However, this fails to explain how a state with its alleged poor administration has been able to survive for 40 years, to consolidate domestic power, generate a growing economy, conduct an active foreign policy and run an advanced nuclear program. The abilities of the Islamic regime should not be underestimated.
This study also questions whether the international sanctions against the Islamic regime could possibly be a cause of poverty in Iran. Before the main sanctions were introduced in 2011-12, Iran witnessed a growth in its economy that could have been used to reduce poverty. This must be noted by policy makers who deal with Tehran. International trade with the Islamic regime will positively affect the regime’s economic power and thereby improve its position relative to the people it rules.
If we agree that poor management and sanctions are not the principal causes of poverty in Iran, scholars must create new explanations, focusing on the regime’s intentions, their religious conception of poverty, and the political arrangements of the country. These subjects have been neglected in academia and should receive immediate attention, if for no other reason than to understand the domestic challenges Iran will face.
1 Absolute poverty is the condition where a person lacks shelter, enough food and water for a normal active life, clothing, and access to health services and a basic education.
2 Giovanni Sartori, "Totalitarianism, Model Mania and Learning from Error," Journal of Theoretical Politics 5, no. 1 (1993): 5-22.
3 "Constitution of the Islamic Republic of Iran," Islamic Parliament Research Centre. http://rc.majlis.ir/fa/content/iran_constitution.
4 Akbar Karbassian, "Islamic Revolution and the Management of the Iranian Economy," Social Research 67, no. 2 (2000): 621-40.
5 Kenneth Katzman, "Iran’s Bonyads: Economic Strengths and Weaknesses," Emirates Center for Strategic Studies and Research, August 6, 2006, http://www.ecssr.com/ECSSR/appmanager/portal/ecssr?_nfpb=true&_pageLabe….
6 Mark Gregory, "Expanding Business Empire of Iran’s Revolutionary Guards," BBC, July 26, 2010, http://www.bbc.com/news/world-middle-east-10743580.
7 Abbas Milani, "Taking Tehran’s Temperature: One Year On," Carnegie Endowment for International Peace, June 8, 2010, http://carnegieendowment.org/2010/06/08/taking-tehran-s-temperature-one….
8 Karim Sadjadpour, "Guidelines for Approaching Iran," Carnegie Endowment for International Peace, June 19, 2007, http://carnegieendowment.org/2007/06/19/guidelines-for-approaching-iran.
9 Karbassian, "Islamic Revolution and the Management of the Iranian Economy."
10 "Comprehensive Structure of Social Welfare and Security Law," Islamic Parliament Research Centre, 2004, http://rc.majlis.ir/fa/law/show/94018.
11 Relative poverty considers the overall economic situation in a country, including absolute poverty and the ability of individuals to ‘[…] play the roles, participate in the relationships and follow the customary behaviour which is expected of them by virtue of their membership of society’ (Peter Townsend, The International Analysis of Poverty (Hemel Hempstead: Harvester Wheatsheaf, 1993). Page 36).
12 Extreme poverty, or undernourishment, is defined as not having enough food for a normal active life.
13 "Social Welfare Safety Umbrella Regulation," Islamic Parliament Research Centre, 2005, http://rc.majlis.ir/fa/law/show/123612.
14 "A Poverty Line That Is One Year behind the Life of the Poor, Do Not Need Avocation," Aftab, August 15, 2007, https://goo.gl/1na57d; "The Ministry of Welfare’s Success in Not Determining the Poverty Line!," Asr-e Iran, March 31, 2008, https://goo.gl/Etgvp6.; "Statistical Centre of Iran Has Extracted the Poverty Line," Asr-e Iran, February 14, 2009, https://goo.gl/Ar3oGq; "What Is the Poverty Line in Iran?" Serat News, November 16, 2015, https://goo.gl/TvcpFB; and "Details about the Costs of Households That Has Increased 4.7 Times/Has the Poverty Lines for the Cities become 2.7 Million?" Mehr News Agency, November 16, 2015.
15 "A Poverty Line That Is One Year behind the Life of the Poor, Do Not Need Avocation," Aftab.
16 "11 Million People Are below the Poverty Line/6 Million People Lacks Insurance," Mehr News Agency, February 26, 2017, http://www.mehrnews.com/news.
17 "How Many Poor People Live in Iran?," Bazar News, December 22, 2016, http://bazarnews.ir/fa/news.
18 "Report from the Department of Economics about the Results of Implementing the First Phase of Targeting: The People Have Become Poor, the Class Gaps Have Increased," Khabar Online, July 4, 2014, http://www.khabaronline.ir/detail/363531/Economy/1379.
19 United Nations’ Global Database of Sustainable Development Goals Indicators, November 30, 2017, https://unstats.un.org/sdgs/indicators/database/?area=IRN.
20 "GNI Per Capita, PPP (Current International $)," International Comparison Program Database, World Bank, December 22, 2017, https://data.worldbank.org/indicator/NY.GNP.PCAP.PP.CD?locations=IR.
21 "General Government Revenue & General Government Total Expenditure," World Economic Outlook Database, International Monetary Fund, April 2017, goo.gl/baV3qv.
22 United Nations’ Global Database on Sustainable Development Goals Indicators.
23 Angus Deaton, "Price Indexes, Inequality, and the Measurement of World Poverty," American Economic Review 100, no. 1 (2010): 5-34.
24 "Estimation of the Poverty Line for Year 2005, Ministry of Welfare and Social Security, November," 2005.
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26 "Monthly or Annual Percentage Change in the Consumer Price Index of Households in the Rural Areas Separated in Month, Year, and Major Groups, Based on Year 2011=100," Statistical Centre of Iran, December 31, 2017, https://www.amar.org.ir/Portals/0/PropertyAgent/461/Files/6288/Roostaii….
27 "PPP Conversion Factor, GDP (LCU per International $)," World Bank, 2017, https://data.worldbank.org/indicator/PA.NUS.PPP?locations=IR&view=map&y….
28 Hossein Raghfar and Zahra Ebrahimi, "Poverty in Iran during the Years 1989-2004," faslnameh-e elmi pajoheshi-e refah-e ejtemaii 6, no. 24 (2007): 55-82.
29 Ali Arshadi and Abdolali Karimi. "Investigating the Absolute Poverty Situation in Iran during the Years of the First to the Fourth Development Plan," faslnameh-e siasathay-e rahbordi va kalan 1, no. 1 (2013): 23-42.
30 Djavad Salehi-Isfahani, "Poverty and Income Inequality in the Islamic Republic
of Iran," Revue Internationale des Études du Développement 1, no. 229 (2017): 113- 136; and Djavad Salehi-Isfahani, "Poverty, Inequality, and Populist Politics in Iran," Journal of Economic Inequality 7, no. 1 (2009), 5-28. Page 7.
31 Pooya Alaedini and Hamid R. Ashrafzadeh, "Iran’s Post-Revolutionary Social Justice Agenda and Its Outcomes: Evolution and Determinants of Income Distribution and Middle-Class Size," in Economic Welfare and Inequality in Iran: Developments since the Revolution, eds. Mohammad Reza Farzanegan and Pooya Alaedini (Palgrave Macmillan, 2016), 15-46; and Nasrin Arzeroom Chilar,. "Various Dimensions of Poverty in Iran, Central Bank of Iran," 2005, https://goo.gl/2dxrfe.
32 Djavad Salehi-Isfahani, "Poverty and Income Inequality in the Islamic Republic
of Iran"; Djavad Salehi-Isfahani, "Poverty, Inequality, and Populist Politics in Iran"; Djavad Salehi-Isfahani, "Revolution and Redistribution in Iran: Poverty and Inequality 25 Years Later," August 2006, https://www.researchgate.net/publication/23721422_Revolution_and_redist…; and Djavad Salehi-Isfahani, "Mobility and the Dynamics of Poverty in Iran: What Can We Learn from the 1992-95 Panel Data?," October 8, 2003, https://www.researchgate.net/publication/252904538_Mobility_and_the_dyn….
33 Pooya Alaedini and Hamid R. Ashrafzadeh, "Iran’s Post-Revolutionary Social Justice Agenda and Its Outcomes: Evolution and Determinants of Income Distribution and Middle-Class Size"; Suzanne Maloney, Iran’s Political Economy since the Revolution (Cambridge University Press, 2015); and Kevan Harris, "Lineages of the Iranian Welfare State: Dual Institutionalism and Social Policy in the Islamic Republic of Iran," Social Policy & Administration 44, no. 6 (2010): 727-45.
34 Djavad Salehi-Isfahani, "Poverty and Income Inequality in the Islamic Republic
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35 Steve H. Hanke, "The Tyranny of Confusion: A Response to Prof. Djavad Salehi-Isfahani on Iran," January 30, 2013, http://www.cato.org/blog/tyranny-confusion-response-prof-djavad-salehi-….
36 Scott Lucas, "Iran Feature: The Political Propaganda around an Analysis — ‘Economy Is Not on the Verge of Collapse,’" in Enduring America World View, October 5, 2012, http://www.enduringamerica.com/home/2012/10/5/iran-feature-the-politica….
37 Ahmad Assadzadeh and Satya Paul, "Poverty, Growth, and Redistribution: A Study of Iran," Review of Development Economics 8, no. 4 (2004): 640-53.
38 "How Many Poor People Live in Iran?," Bazar News.
39 Vahid Mahmoudi, "Poverty Changes during the Three Recent Development Plans in Iran (1995-2007)," African & Asian Studies 10, no. 2 (2011): 157-79.
40 Farhad K. Kashi and and Mohammad N. Shaikhi, "Effects of Macroeconomic Variables on Poverty in Iran (Application of Bootstrap Technique)," Theoretical & Applied Economics 21, no. 5 (2014): 85-96.
41 Hussein Raghfar, Mitra Babapour and Mohadase Yazdanpanah, "Investigation of the Relation between Growing Economy, and Poverty and Inequality in Iran during the First to Fourth Development Plan," faslnameh-e Elmi-pajoheshi-e motaleat-e Eghtesadi karbordi-e Iran 4, no. 16 (2015): 59-79.
42 Hossein Raghfar, Mitra Babapour and Mohadase Yazdanpanah, "Investigation of the Relationship Poverty and Inequality in Iran During the First to Fourth Development Plan." Scientific Journal of Iranian Economic Studies, 4 (2016): 76.
43 "Raghfar: The Poverty Line Has Become 2 Million and 700 Thousands Toman," Shargh Daily, May 30, 2015, http://www.sharghdaily.ir/News
44 Hamid R. Ahmadkhaniha, Seyed V. Shariat, Sharif Torkaman-nejad, and Mohammad M. H. Moghadam, "The Frequency of Sexual Abuse and Depression in a Sample of Street Children of One of Deprived Districts of Tehran," Journal of Child Sexual Abuse 16, no. 4 (2007): 23-35.
45 "The Catastrophe of Vending Kidneys in Iran," Zendegi-e Salem, January 12, 2014, http://zendegisalemnews.ir/visitorpages/show.aspx?IsDetailList=true&Ite….
46 Tahereh Malakoutian, et al, "Socioeconomic Status of Iranian Living Unrelated Kidney Donors: A Multicenter Study," Transplantation Proceedings 39, no. 4 (2007): 824-25.
47 Mehdi Afrozmanesh, "Growing Educated and Married Female Prostitutes, Interview with Saeed Madani Ghahfarokhi," November 22, 2008, http://news.gooya.com/society/archives/080057.php.
48 Saeed Madani Ghahfarokhi, Fariborz Raisdana, and Peyam Roushanfekr. "The Market of Street Prostitution in the Metropolis of Tehran," majaleh-e motaleat-e ejtemai-e Iran 6, no. 1 (2011): 130-53.
49 Mehdi Afrozmanesh, "Growing Educated and Married Female Prostitutes, Interview with Saeed Madani Ghahfarokhi,"
50 "From Falling Age of Prostitution to the Prostitution of Married Women," Parsine News Site, November 24, 2013, goo.gl/XHJKLK.
51 Said Moidfar, "The Society Does Not Feel Well," February 20, 2014, http://saidmoidfar.ir/?p=134.
52 "80 Percent of the People, below the Poverty Line, Interview with Saeed Madani Ghahfarokhi," Aftab, July 1, 2007, goo.gl/6T7heC.
53 "Is Housing Ownerships in Iran Declining? The Confusing Tangle of Mehr Housing Projects," Khabar Online, August 18, 2015, https://www.khabaronline.ir/detail/447594/Economy/house.
54 "80 Percent of the People, below the Poverty Line, Interview with Saeed Madani Ghahfarokhi," Aftab.
55 Hossein Raghfar, et al,"Impact of Health Insurance Inefficiency on Poverty among Iranian Households," Hakim Research Journal 16, no. 1 (2013): 9-19.
56 "5 Million People Stricken by the Devastative Health Treatment/Growing Households below the Poverty Line," Mehr News Agency, April 20, 2013, https://www.mehrnews.com/news.
57 "Receiving Gifts in Cash from Students Is Not Mandatory/Encountering with Violating Schools in Ardabil," Mehr News Agency, October 11, 2014, https://www.mehrnews.com/news.; and "Mandatory Gifts to Some Schools in Abdanan," Iranian Student’s News Agency, January 16, 2014, http://isna.ir/fa/news.
58 Jahangir Amuzegar, "Iran’s Post-Revolution Planning: The Second Try," Middle East Policy 8, no. 1 (2001): 25-42; Djavad Salehi-Isfahani, "Growing Up in Iran: Tough Times for the Revolution’s Children," Brown Journal of World Affairs 15, no. 1 (2008): 63-74; and Vahid Mahmoudi, "Poverty Changes During the Three Recent Development Plans in Iran (1995-2007)."
59 Amartya Sen, Development as Freedom (Clays Ltd, St Ives plc, 1999).
60 Djavad Salehi-Isfahani, "Poverty, Inequality, and Populist Politics in Iran" 39.
61 David J. Freiman, "Persian Gold: Doing Business in Iran," Management Review 64, no. 5, (1975): 9-15; George Lenczowski, ed., Iran under the Pahlavis (Standford: Hoover Institution Press, 1978); Jahangir Amuzegar, Iran’s Economy under the Islamic Republic (London: I.B.Tauris & Co Ltd, 1997); Jahangir Amuzegar, "Iran’s Post-Revolution Planning: The Second Try"; and Gholam R. Afkhami, The Life and Times of the Shah (University of California Press, 2009).
62 Charles Issawi, "The Iranian Economy 1925-1975: Fifty Years of Economic Development," in Iran under the Pahlavis, ed. George Lenczowski (Hoover Institution Press, 1978), 129–66.
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64 World Bank. "Unemployment, Youth Total (% of Total Labor Force Ages 15–24) (Modeled ILO Estimate), March," 2017, https://data.worldbank.org/indicator/SL.UEM.1524.ZS.
65 Djavad Salehi-Isfahani, "Revolution and Redistribution in Iran: Poverty and Inequality 25 Years Later," 39.
66 Wouter van Ginneken, "Some Methods of Poverty Analysis: An Application to Iranian Data, 1975-1976." World Development 8, no. 9, (1980): 639-46.
67 Djavad Salehi-Isfahani, "Poverty and Income Inequality in the Islamic Republic
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68 Andrew S. Cooper, The Fall of Heaven: the Pahlavis and the Final Days of Imperial Iran (Henry Holt and Company, LLC, 2016), 8–9.
69 "GDP Per Capita, PPP (Constant 2011 International $), 1990-2013," World Bank, 2017, http://databank.worldbank.org/data/reports.aspx?source=2&series=NY.GDP….
70 "Human Development Report," United Nations Development Programme, 1995 and 2015, http://hdr.undp.org/en/global-reports.
71 "Human Development Report," United Nations Development Programme, 2000, 2005 and 2010, http://hdr.undp.org/en/global-reports.
72 Eric Ellis, "Made in Iran," interview with Alireza Mirzaei, Fortune Magazine, September 12, 2006, http://archive.fortune.com/magazines/fortune/fortune_archive/2006/09/18….
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