At the same time last year, Mohammad was still able to buy fruit and chicken for his three children.
But as US sanctions and the coronavirus pandemic have devastated the economy and spurred inflation – nearly tripling the price of fresh fruit – the 47-year-old unemployed man and his family are surviving on bread, potatoes and eggs and only then because he received the “bonus” status, sold household appliances and dipped into his savings.
“I get around 9 million rials ($ 38) in monthly government financial aid and spend around the same amount on my own money [and we still] live as war refugees, ”said Mohammad, a polio survivor who quit selling cigarettes three years ago due to his disability.
Millions of people have been pushed into extreme poverty over the past year, adding to the pressure on the regime in an Iranian election year to resume negotiations on the nuclear deal with the new US President Joe Biden.
The Islamic Republic boasts that the economy has survived in the face of US sanctions and the coronavirus pandemic, in part due to non-oil exports such as petrochemicals and steel, bartering, and the sale of small amounts of crude to China. But many Iranians are much poorer than they were when Donald Trump pulled the United States out of nuclear deal the Islamic republic had signed with the great powers.
“More than 60 percent of Iranian society lives in relative poverty because the wages of workers are sufficient for about a third of their cost of living,” said Faramarz Tofighi, head of the wages committee of the Islamic Labor Council, an industrial relations group. . “Half of those who live below the poverty line struggle with extreme poverty.”
Saeed Laylaz, a reformist economist, confirmed figures cited by Mr Tofighi and said the number of those fighting extreme poverty had quintupled in three years since the United States abandoned the agreement and reimposed the sanctions. There are no official government figures available on poverty and experts rely on purchasing power data to estimate deprivation.
Rising poverty has increased pressure on the regime to reopen negotiations with the United States, Laylaz said. “After the pandemic, if the Islamic republic cannot reduce poverty, it could face political and social instability. The government must compensate. . . for the tremendous pressure put on people over the past three years.
The official annual inflation rate is now 46.2%, down from less than 10% in May 2018 when the United States withdrew from the agreement. The price of food and drink is higher again, with Iranians complaining that the cost of chicken, rice and eggs has nearly doubled over the past year, while the prices of beans and vegetable oil increased about three times. In a country where youth unemployment stands at 16.5 percent, many workers have lost their jobs in the past year due to the pandemic.
Many would have been starving if it hadn’t been for the government’s monthly payments to offset reduced energy subsidies as well as payments to help mitigate the impact of the pandemic, analysts say.
Iran’s smart cash payment system covers around half of the 83 million people and targets those with no source of income. The poorest families – with an average of four members – are entitled to a minimum of 5.7 million rials per month, enough to afford bread and potatoes. This has helped make bread “affordable for many families and helps them not to starve,” Laylaz said.
Ghodrat, the janitor of a residential building in affluent north Tehran, said his monthly salary of 18.5 million rials had risen to 24 million rials since March, but that he still struggled to get out. He sends almost all of his salary to his wife and two children in another town to survive. “I have never felt such financial pressure in my life. I eat a lot less these days and rely on neighbors who sometimes give me food, ”he says. “But sometimes I sleep hungry or only drink water or tea for breakfast.”
In Zahedan, one of the most disadvantaged regions in the country, the situation is even worse, according to charities. The Abid Vafamanesh charity supports 370 families, four times more than last year, in part because of the exodus of the poor from larger and more expensive cities. “Families with two children live in shelters of 12 m². Breakfast is meaningless to them, ”he said.
The risk for the regime is that this poverty could also have political consequences. In November 2019, protests by the poor were brutally suppressed. Hundreds of people have been killed. “If we cannot close the widening gap between the rich and the poor, we will see an explosion of resentment and depressed feelings in society,” Tofighi said.
While Mohammad put a lot of hope in the Iran-US talks and the lifting of sanctions, he said corruption and mismanagement were big issues as well. Iranian leaders had to prioritize the “real needs” of the people such as their dignity and basic economic problems, he said, over “false needs” like regional problems and forcing women to observe the laws on Islamic clothing.
“Today, if my father dies, I cannot afford to travel to attend his funeral. This is not how a nation can be treated, ”he said. “This approach doesn’t even benefit leaders, because people can be suppressed and killed today, but they will pick up arms tomorrow to defend their right to lead a life of dignity.”