When the world gets closer.

We help you see farther.

Sign up to our expressly international daily newsletter.

Geopolitics

Why Inflation In Iran Is Hitting Even Harder

Inflation is nothing new in Iran. But its staggering rise is pushing millions of Iranians toward abject poverty.

Why Inflation In Iran Is Hitting Even Harder

At the Grand Bazaar in Tehran

Roshanak Astaraki

-Analysis-

As inflation in Iran spikes to record heights, President Ebrahim Raisi and his Economy Minister Ehsan Khanduzi insist the government is working to curb the price hikes wreaking havoc on household budgets. Yet there is very little in Raisi's year-long record to indicate earnestness in getting a grip on inflation or mitigating its impact on the poor. The endemic inflation of the last four decades, and particularly the explosive inflation of the last three years, are forging a frightening picture of daily life for many Iranians.


In April-May this year, consumer prices had risen 52.5% year-on-year, though the annual inflation rate for foodstuffs stood at 81.6% in those weeks. The rates are based on figures given by the Iran Statistics Organization and the Central Bank, which many observers believe are notched down. But even they show an average rate of over 40% for the past three years and over 20% in the past three decades. Per capita earnings meanwhile have fallen while all welfare and consumer indicators are in free-fall.
Separately, Iranians are thought to be paying 15 times as much in taxes this year as in 2011-12. The only thing that has missed the inflationary rocket is wages.

Below poverty line

Every year, the purchasing power of vulnerable groups like pensioners or working-class families buckles under the pressure of inflation as prices leap ahead of stable wages. The government raised state-sector wages by no more than 10% in the Persian year to March 20, 2022. That has pushed millions of state-sector employees and their households below the poverty line.

The family has become one of the most vulnerable of social units in Iran

Four decades of inflationary conditions of varying intensity have had and will have long-term socio-economic and cultural effects. Large sectors of society have ended all spending on leisure, travel, culture, eating out and extra-curricular studies. Currently, many are trying to pay the rent without cutting on food.

Even reducing some of the items in a standard family basket of goods, households are finding it hard to pay rent and eat properly. There have been recurring reports recently of falling demand for basic foods including meat, chicken and dairies. The head of an association of fruit and vegetable retailers recently reported a 25-30% drop in demand for fruit over a week. Fruit was already a luxury in Iran, and as a senior nutritionist at the Health Ministry stated six years ago, 88% of Iranians were not eating enough of them.

Most figures out of Iran will confirm that numerous households are reducing or altering their nutrition to dangerously poor levels, and malnutrition will likely affect the health of future generations.

Iranian President Ebrahim Raisi speaking during a parliament session

Iranian Presidency/ZUMA

What will last

The family has become one of the most vulnerable of social units in Iran. Many people work several shifts to make ends meet, prompting distancing, stress and dismay inside families. Stress can undermine the affection children need. Down the line it can provoke failed studies, misdemeanors or addiction.

The middle class is another victim of the inflationary hurricane, being hit by falling purchasing power and a crisis in their sense of identity and belonging in Iran. This decline has prompted many of its members to move into cheaper residential districts. Perhaps the effects of impoverishment on them are not yet as grave as they have been on the poor: in their case, inflation is hastening such trends as increased criminality, addiction, child labor, child marriages or homelessness.

When people lose hope in the here and now, they will seek a way out

Inflation has also encouraged social exclusion and discouraged voluntary activities and even attention to environmental issues or ethical questions like animal rights.

While in many countries the state meets some very basic needs of the poor such as healthcare and schooling, such rights are now far from assured in Iran. Online schooling during the pandemic, for example, became extremely difficult for families without access to tablets or computers, or in those parts of Iran where Internet access is sketchy.

The Islamic Republic should be afraid

The Iran Statistics Organization estimates that a million Iranian youngsters missed the 2020-21 school year for a range of reasons, and a few thousand more are likely to miss school this year because of growing poverty. Persistent schooling gaps now will only feed economic poverty in coming years, as children will grow up without the skills the job market may require.

When people lose hope in the here and now, they will seek a way out, including by leaving the country. Iran has been losing a vital workforce for some years now.

But much more threatening to the Islamic Republic is the enormous and growing gap between most Iranians and a ruling minority whose corruption and ruthlessness is leading the country toward utter ruin.

There is only so much people can take. In Iran, that pressure may finally push millions of desperate citizens onto the path of ridding themselves of an erratic and hated regime.

You've reached your monthly limit of free articles.
To read the full article, please subscribe.
Get unlimited access. Support Worldcrunch's unique mission:
  • Exclusive coverage from the world's top sources, in English for the first time.
  • Stories from the best international journalists.
  • Insights from the widest range of perspectives, languages and countries
Already a subscriber? Log in

When the world gets closer, we help you see farther

Sign up to our expressly international daily newsletter!
Migrant Lives

Not My Problem: Individual Responsibility And Government Abuse Of Asylum Seekers

Denial and indifference drive the way ordinary Australians face the mistreatment of refugees.

A Syrian refugee camp in the outskirts of Athens

Jamal Barnes

-OpEd-

As one of its first acts in government, the newly elected Labor government turned back a boat of Sri Lankan asylum seekers trying to enter Australia.

Labor has vowed to continue Operation Sovereign Borders, including boat turnbacks and offshore detention. This is concerning. Not only do turnbacks violate international law, but offshore detention has resulted in torture and cruel and inhuman treatment of refugees.

Even more concerning is the lack of criticism Labor has received for continuing offshore detention and turnbacks. Apart from being condemned by human rights groups and minor political parties, Labor’s refugee policies appear to have gone without much comment from a large part of the Australian public.

As I found in my new research paper, the Australian government has used three forms of denial, creating physical and psychological distance between itself and refugees.

Keep reading...Show less

When the world gets closer, we help you see farther

Sign up to our expressly international daily newsletter!
You've reached your monthly limit of free articles.
To read the full article, please subscribe.
Get unlimited access. Support Worldcrunch's unique mission:
  • Exclusive coverage from the world's top sources, in English for the first time.
  • Stories from the best international journalists.
  • Insights from the widest range of perspectives, languages and countries
Already a subscriber? Log in
Writing contest - My pandemic story
THE LATEST
FOCUS
TRENDING TOPICS

Central to the tragic absurdity of this war is the question of language. Vladimir Putin has repeated that protecting ethnic Russians and the Russian-speaking populations of Ukraine was a driving motivation for his invasion.

Yet one month on, a quick look at the map shows that many of the worst-hit cities are those where Russian is the predominant language: Kharkiv, Odesa, Kherson.

Watch VideoShow less
MOST READ