Official statistics on poverty in Iran are difficult to come by, so a recent report published by the parliament’s Research Center has been welcomed by analysts, economists, socialists and activists, among other groups in Iran. For years, no detailed data on poverty on Iran has been available, apart for a small number of studies — mostly conducted by experts relying on data pertaining to “households’ income and expenses” provided by the Statistical Center of Iran. For this reason, it has been difficult to determine exactly where the theoretical poverty line cuts across Iranian economy and society.
Article 95 of the Fourth Development Plan Law, passed in 2004, required the government to determine Iran’s poverty line on an annual basis. And yet, since that time, some cabinet ministers have said they have received no information, while others have claimed that the publication of this data has been done on a “discretionary” basis, and others still seem content with issuing general statements such as “poverty is increasing in Iran.”
In recent years, experts have presented a variety of figures regarding absolute poverty in Iran. For instance, in 2016, the economist Hasan Raghfar said that households living on an income of four million tomans (close to $96) or less per month constituted the poverty line in urban areas. It concluded that 33 percent of Iranians live in absolute poverty. Another example came in August 2018, when Rasoul Khezri, a member of the parliament’s Social Affairs Committee, claimed that the absolute poverty line in Iran was six million tomans ($143) and that more than half of the population lives in absolute poverty.
The parliament’s Research Center study for the Iranian calendar year 1395 (March 20, 2016-March 20, 2017), clears up uncertainties to a large degree. The Research Center is not an official authority on statistics, but it is considered to be a reliable research institute and the facts presented by its experts are trustworthy. In particular, it details how it the center calculated the poverty line, thereby portraying a somewhat realistic picture of existing conditions. It shows how extensive poverty is in Iran, and also points out how susceptible Iran is to poverty, especially in the current fragile economic climate, in which more people can slip into the poverty at any moment.
This article will attempt to understand the levels of poverty on a national level and analyze the data provided by the Research Center in a way that presents an accurate picture and tangible account of poverty in Iran.
How Reliable are Figures Presented by the Research Center?
Setting out the definition of “absolute” or “extreme” poverty is key to understanding the available data. It is not simply a superlative term used to drive home the severity of the situation — it is defined specifically within the discipline of social studies. A report published by the United Nations in 1995 described it: “Absolute poverty is a condition characterized by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to social services.”
The World Bank has a more quantitative standard. It defines the poverty line at a daily income of $1.9 in 2010 prices, which translates to more than $2 in 2016 prices or more than $600 per month. In 2016, one US dollar was worth 3,500 Iranian tomans, so the poverty line in Iran stood at around 2.1 million tomans per month.
This figure must be adjusted for the purchasing power of the American dollar in various countries. In its current calculations, the World Bank uses a coefficient of 3.86 for the purchasing power of one dollar for the year 2017. Dividing 2.1 million tomans by 3.86 results in a figure of around 544,000 tomans as the per capita absolute poverty line in Iran, close to the number the parliament’s Research Center uses as an average.
What is the Poverty Line in Iran?
According to study by the Research Center, in 2016 the absolute poverty line in Iran ranged from 200,000 tomans (around $57 in 2016 currency prices) in the rural areas of Sistan and Baluchistan to 770,000 tomans in Tehran. The following chart illustrates the poverty line for urban areas in four groupings.
Source: Iranian Parliament Research Center
The chart below illustrates the poverty line for rural areas in five groupings.
Source: Iranian Parliament Research Center
Based on the data provided by the study, the highest poverty line is as follows: More than 1.3 million tomans for a family of two, close to 2.1 million tomans for a family of four and close to 2.85 million tomans for a family of six.
Calculated by the author based on the data provided parliament’s Research Center (Numbers are in tomans)
The poverty line is decisive, a sign of palpable health risks. An individual living below the poverty line cannot afford to purchase food that can supply 2,100 calories per day and so is likely to suffer from hunger and malnutrition — potentially causing irreversible damage to the body if it lasts for a significant period of time.
Poverty Line Update for Autumn 2018
To get a more comprehensive picture of the current situation, it is important to update the figures taking into account inflation, which has been running extremely high since the United States re-imposed sanctions on Iran. The latest numbers published by the Statistical Center of Iran provide solid data to attempt this.
According to the data, the price index in the urban areas of Tehran province has increased by a shocking 50.4 percent since the same period last year. In the impoverished province of Sistan and Baluchistan the increase in the price index has been 52.9. The chart below shows the highest and lowest poverty lines updated for the fall of 2018 by taking inflation into account.
Calculated by the author based on the data provided by the parliament’s Research Center and inflation numbers as reported by the Statistical Center of Iran (Numbers are in tomans
Who are the People Living Under the Poverty Line?
Wherever people are in the world, losing one’s job can plunge that person into poverty. But comparing numbers and statistics with the levels of wages and salaries shows that in Iran, not only do the unemployed but also some groups of employed people — teachers, government employees, laborers and retirees — face absolute poverty and hunger. The difference between minimum salaries and the poverty line in Iran is very small, and for falling under the poverty line is a continuing possibility for those people earning minimum salaries.
This year, the minimum salary of government employees and retirees was 1.2 million tomans ($286 according to the current exchange rate) per month. The minimum pay for an unmarried employee was 1.26 million tomans ($300), 1.372 ($327) million tomans for a married employee with one child and 1.483 ($354) million tomans for a married employee with two children.
It is clear from these numbers that, in Tehran, a single employee or retiree is only slightly above the poverty line but if this individual marries, a single salary would not suffice to buy food for the family. And even if the spouse gets a government job at the minimum salary, their combined income would not lift a family of four above the capital’s poverty line.
According to Jamshid Ansari, Rouhani’s Vice President for Workforce Affairs, in 2018, the average monthly salary of a government employee was 2.29 million tomans ($545). Therefore, even a government employee who receives an average salary cannot support a family of four and the family will sink beneath the poverty line. Considering the inflation and the prospects of a deep recession, the outlook for the coming years looks foreboding. The combination of recession — which means increasing unemployment — and inflation can only lead to a marked increase in the number of Iranians living below the poverty line.
How many Iranians Live Below the Poverty Line?
According to the findings of the parliament’s Research Center, of a population of 80 million Iranians in 2016, more than 13.3 million lived below the poverty line. This amounts to something close to 17 percent of the population, or around 3.44 million families whose income cannot support the lowest standards of living. On average, these families have four members.
The following map shows the distribution of poverty among the 31 Iranian provinces.
Of the total number of poor in Iran, 10.7 million live in urban areas. This number comes to a little over 18 percent of Iran’s total urban population. According to the Research Center’s study, more than 2.7 percent of Iranian households, each with an average of four members, mostly live on the margins and in decayed urban areas.
In 2016 the urban poverty line for a family of four, depending on where they lived, was somewhere between one million to 2.1 million tomans. If these numbers are updated for inflation, they come to 1.5 million to 3.1 million tomans respectively.
Although people living in villages have been fighting unrelenting poverty for years, the poverty rate in rural areas is surprisingly lower than that of urban areas. This, perhaps, can be attributed to the lower cost of living, especially when it comes to housing — putting the quality of the housing aside. According to the Research Centers’ study, in 2016 more than 2.617 million villagers, or around 737,000 families, lived below the poverty line. The average size of a rural poor family is 3.6, a little smaller than the average urban family. In summary, at least 13 percent of Iranian villagers live below the poverty line — almost one in every eight villagers.
In 2016, the poverty line for a rural family of four, depending on where they lived, ran between 550,000 and 1.17 million tomans. Taking inflation into account, for the fall of 2018 these numbers amount to between 850,000 and 1.75 million tomans.
The Specter Hanging over Iranian Society
In a country where 17 percent of the population live under absolute poverty line, in an urban society where one-fifth of its population face hunger, how can one hope for growth and improvement?
In addition, political and economic instability complicate the situation further on almost a daily basis. A shadow hangs over the middle class and sanctions, recession and inflation continue to be major contributing factors in pushing people into poverty.
The story of individuals losing their jobs, and then losing purchasing power, making them unable to afford to pay for even 2,100 calories per day, is becoming increasingly commonplace and shockingly familiar.
خط فقر ایران در سال 1395 و مروری بر روش محاسبه آن (PDF), Iran’s Parliament Research Center, December 2018
قانون برنامه چهارم توسعه اقتصادی، اجتماعی و فرهنگی جمهوری اسلامی ایران, Iran’s Parliament Research Center, October 20, 2004
علی ربیعی: فقر در ایران رو به افزایش است, Radio Zamaneh, May 8, 2016
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۳۳ درصد جمعیت در «فقرمطلق» /۴میلیون تومان؛ «خط فقر» شهریها در سال ۹۶, Iranian Students News Agency (ISNA), April 7, 2018
شاخص قیمت مصرف کننده به تفکیک استان – آبان 1397 (PDF), Statistical Center of Iran, November 13, 2018
تعیین ضریب حقوق و حداقل و حداکثر حقوق کارمندان, Shenasnameh Qanoon, April 22, 2018
متوسط حقوق کارمندان دولت چقدر است؟, Khabar Online, January 16, 2018
Revealed: Absolute Poverty in Iran, December 7, 2018
Could a 20% Salary Increase Help State Employees?, December 5, 2018
Iran Rushing Toward 30 Percent Inflation, November 27, 2018
Iran’s Economy Is Stagnating Even Before New US Sanctions Hit, October 30, 2018
Runaway Inflation and the Nationwide Trucker Strike, October 4, 2018
Families and Fishermen Lose Out as Prices Rise, October 1, 2018
Can Iran Survive the Inflation Hike?, August 29, 2018
Living on the Margins in Iran: Bandar Abbas and Hormozgan Province, August 24, 2018
Iranian Protesters: Death to High Prices!, July 31, 2018
Living on the Margins in Iran: An Introduction, July 11, 2018
Read the first article in the new series