Experience has shown that a group of countries that are unable to exploit their resources due to low productivity and inefficiency in internal economic policy, as well as an inability to speed up foreign trade and engagement with the rest of the world, are doomed to remain impoverished indefinitely.
According to the analysis of the People’s Mujahedin of Iran (PMOI / MEK Iran), and the National Council of Resistance of Iran (NCRI), the Iranian economy has shown evidence of all three of the above reasons since 2011, particularly in the backdrop of rising poverty and the number of poor people.
The poverty rate increased by 32%
The recent research conducted by Iran’s Ministry of Welfare, a large portion of the country’s households have been imprisoned in poverty during the last decade. According to public data, the poverty rate increased from 22% in 2017 to 32% in 2019 (the highest percentage in ten years), implying that roughly 32% of the country’s population, or 26.5 million people, were poor in 2019.
For the past ten years, Iranian households have faced declining wellbeing due to high inflation rates, particularly since 2018, the recession, and the persistent decline in per capita national income. The poverty rate in 2020 was 31%, which means that 31% of the population, or roughly 26 million people, lived in poverty last year, based on a population of more than 83 million people.
The poverty situation in Iran has worsened
According to studies, the poverty situation in Iran has worsened in 2020, with an estimated average poverty line of 1.254000 million tomans per capita last year, with a poverty line of 2.758000 million and 3.385000 million tomans for a household of three and four, respectively.
Food and housing have a larger part of poor households’ expenditures than other commodity groups, and so high inflation in these commodities is the main explanation for the increase in poverty last year.
Poor households must pay much higher costs
Because the cost of providing a basket is a basis for assessing the poverty line, an increase in the poverty threshold indicates that poor households must pay much higher costs to provide a fixed minimum; this is despite the fact that, first, incomes have not improved to this extent, and second, even if income grows, the share of low-income households may be less than this increase, or even despite the increase in the poverty line.
In fact, independent of the effect of substitution or poorer household spending, the consequent price shock is likely to lower consumption for many households in the short run.
The steep increase in the poverty line
As a result of the steep increase in the poverty line last year, it is reasonable to conclude that, due to a lack of a comparable increase in income and sluggish economic growth, more households will fall below the poverty line this year, and poverty will rise.
Since the outset of the development of its nuclear projects after the US imposed sanctions on Iran’s economy, Iran has been unable to utilize its most liquid asset, oil.
Lack of sufficient domestic and foreign investment
On the other hand, Iran’s most valuable human resources, which are the country’s highest valuable assets, have also fallen victim to unemployment, and a lack of sufficient domestic and foreign investment is destroying the Iranian youth’s prime working years.
While Iran no longer has a chance to return to a normal life cycle and a healthy relationship with the rest of the world due to years of government corruption and resource wastes, it will forever be poor due to the waste of human resources, which are the most valuable and irreplaceable resource for any country.