October 2, 2020
Faramarz Tofiqi, the chairman of Iran’s Wage Committee of the Supreme Labor Council, says that the minimum rate of the “subsistence basket” in Iran increased from seventy-five million rials (about $1,780) in August to nearly eighty million rials (roughly $1900) in September.
The subsistence basket is the Iranian version of a model the USSR Institute of Nutrition developed in 1991, determining 38 foods that a person needs for a monthly subsistence, including bread, flour, pasta, rice, fish, meat, milk, butter and cream.
The subsistence basket functions as an economic indicator that is usually calculated and announced by trade unions. The basket’s primary meter, the “poverty line,” is determined and reported by government institutions. Still, in recent years, government and public institutions have deviously avoided the official announcement of the “poverty line” rate.
Iran’s average basket rate represents the lowest living cost throughout Iran, except in Tehran and metropolitan areas.
According to the state-run Iran Labor News Agency (ILNA), Tofiqi announced the subsistence basket rate in September was 79 million rials (approximately $1,876) and emphasized the minimum cost of living in Tehran and other urban areas were much higher.
The Supreme Labor Council, ILNA says, performs independent calculations of the subsistence basket.
The subsistence basket rate was announced at 49.4 million rials in March 2020 and 75 million rials in August, proof that the minimum cost of living has increased by at least sixty percent to thirty million rials (almost $713) during the last six months.
Similarly, the Research Center of Islamic Legislative Assembly (RCILA) announced at the beginning of the Iranian calendar year on March 20 that the poverty line for four-person households in the last two years was calculated at 45 million rials (approximately $1,068). The figure shows an eighty percent increase compared with two years ago.
However, numerous reports on soaring prices and Iran’s living cost show that RCILA’s figure is far from the reality of people’s lives in the nation.
Recently, the Inspector of the Supreme Assembly of Workers’ Representatives set the poverty line for a family of four at 100 million rials (about $2,375) and shared that “half of the country’s population lives in absolute poverty.”
The Islamic Revolution Guards Corps (IRGC)-linked Fars News Agency dismissed that figure and claimed that the poverty line rate was “about 50 million rials.”
While the cost of living in Iran has risen by at least sixty percent in six months, the Statistics Center of Iran (SCI) has set the annual inflation rate in September at 26 percent.
Simultaneously, an economic researcher, Ehsan Soltani, told ILNA that figures presented as inflation rates in Iran are not real, cannot be trusted, and fall into the category of “figure-imaginary.”
The cost of living in Iran has risen to the extent that the government and Majlis Parliament are considering a plan to issue coupons to provide for some essential household goods.
The Kalabarg plan, dubbed the “electronic coupon” by the media, is reminiscent of what people experienced during the devastating eight-year war between Iran and Iraq from 1980-1988.
At the time, the government distributed eight foodstuffs, including meat, rice, and sugar, via coupons.
In the last two years, after the withdrawal of the United States from the Joint Comprehensive Plan of Action (JCPOA) 2015 nuclear deal with world powers, as well as the reimposition of economic sanctions by the U.S. o Iran, the value of the Iranian national currency, the rial, has fallen sharply and inflation has risen dramatically.
The U.S. sanctions, along with problems caused by the novel coronavirus outbreak, have put severe pressure on Iran’s already struggling economy.
Admitting the excessive cost of foodstuffs and other essential goods, Iranian President Hassan Rouhani maintained that since the U.S.’ withdrawal from the JCPOA in 2018, Iran has been grappling with an economic war.
In addition to the impact of the U.S. sanctions on the increasing inflation rate in Iran, some experts believe that the “systematic financial corruption,” as well as the “massive and secret” costs of Iran’s military and nuclear activities, have contributed to the country’s chaotic economic situation.