Iran Pension Crisis: Official Sacked after Proposing to Sell Islands

A senior official at Iran’s Ministry of Labor was sacked after suggesting that the government might have to sell some of the country’s Persian Gulf islands to pay pensions, sparking sharp criticism among Iranians.

Sajad Padam, director-general of social insurance at the ministry, made the controversial comments in an interview on May 1 as the government and many Iranians face financial difficulties amid an intensifying economic crisis.

Declining living conditions, wage arrears and a lack of welfare support has sparked unrest in Iran since last year’s summer, with many workers and pensioners taking to the streets to demand their dues.

“Greece sold 100 islands to pay for the demands of its pensioners, and we may soon find ourselves in a similar situation,” Padam said. “We sacrificed 300,000 martyrs to preserve every inch of our land (during the Iran-Iraq war in the 1980s), but we may now have to sell [the islands of Kish and Qeshm and Khuzestan [province] to pay pensioners' salaries."

The official noted that even if the country were to sell 3 million barrels of oil per day and receive the full proceeds from the sales, it would still not be enough to resolve the retirement funding crisis. Iran currently sells only 1 million barrels daily due to sanctions.

After the publication of the interview, the Ministry of Labor’s press service announced that Padam had been removed from his position.

Padam later tweeted: "I’m gone, but you didn’t appreciate honesty, transparency, openness and reform."

Padam’s remarks garnered significant attention on social media. 

Reformist politician and former spokesperson for Mohammed Khatami’s government, Abdullah Ramzanzadeh, ironically tweeted: “Selling off land to compensate for government inefficiency.”

Historian Majid Tafreshi compared Padam’s suggestion to Britain's offer in the 1920s to write off Iran’s debt in exchange for the hand-over of Persian Gulf islands, a proposal rejected by the Iranian government.

Political analyst Reza Alavi criticized the comparison between Greece and Iran, arguing that “Greece is a democratic government elected through free elections, whereas Iran is a provincial dictatorial government.”

“This has created a deep divide between the Iranian nation and the government, causing many to distrust the government's officials and their words,” he told IranWire.

Alavi noted that “the same government that has sacrificed hundreds of thousands [of people during the war] to protect the country's territory from foreign aggression is now discussing selling Kish and Qeshm islands to pay the pensioners' pensions.”

Over the past year, economic experts have warned of the imminent bankruptcy of most Iranian pension funds.

According to Alavi, “the government's disregard for expert warnings about the state of pension funds has exacerbated the situation into a super crisis.”

Even if Kish and Qeshm islands were sold, the analyst said, the crisis would persist due to the rent-seeking and inefficiency of managers, political corruption and the government’s isolationist policies in the international arena.

"Pension funds, which have now gone bankrupt, have been used as personal playgrounds for government ministries and managers for years. The government and the leader of the Islamic Republic are responsible for this situation," Alavi said.