The Poverty Line in Iran. A “Hoax?”

Translator’s note: At a recent press conference in Tehran, fraudulently elected president Mahmoud Ahmadinejad claimed that customary approaches used by economists to determine the poverty line are a “hoax” and cannot be used as a measure to prove that there is poverty in Iran. Existing facts, however, contradict Ahmadinejad’s statement.

According to a World Bank study done in 2005 and published in 2008, over 8% of Iran’s population of 72 million live under the severe poverty line of $2 per day or $240 per month for a family of four.(1) Based on a study done by the Central Bank of Iran in 2006, the general poverty line is currently no less than $400 per month for a family of four. (2) Another study done by the Iranian economist Hussein Raghfar, and endorsed by the Iranian newspaper, Capital, states that the poverty line in Tehran is around $800 per month for a family of four. This study also claims that given the large number of Iranian city dwellers, around 30% of the population fall below the poverty line. Raghfar’s study emphasizes that an increasing percentage of the following groups have fallen below the poverty line: 1. Laid off and unemployed workers. 2. Farmers who cannot compete with the cheaper prices of imported agricultural goods. 3. Civil servants whose salaries cannot pay for living expenses, given the current 26% inflation rate(3) While a minority of Iranian economists claim that poverty has declined during the past ten years, most Iranian economists think otherwise. (4) The following report from the Iranian Labour News Agency (ILNA) responds to Ahmadinejad’s latest claim that there is no poverty in Iran. ILNA was launched in February 2003. It belongs to the Workers House, a labor union set up by the Iranian government. However, it is considered close to the Iranian reform movement. ILNA was banned in the Summer of 2007 and was reinstated a year later after much pressure from workers’ organizations, students and journalists.(5)

1. Poverty Data: A Supplement to World Development Indicators 2008, p. 19.



The following summary of a report by Iran’s Chamber of Commerce states that only 30% of Iran’s production units are actually engaged in production.

Also see the following article for a recent analysis of the Iranian economy by an economist inside Iran.

4. Djavad Salehi-Isfahani is an Iranian economist and a Dubai Initiaitve research fellow at Harvard University, who believes that the current protests in Iran are not proof of mass dissatisfaction with rising poverty and economic stagnation. He believes that “poverty has declined steadily in the last ten years.” However, he does admit that “in the last ten years, a huge inflow of oil revenues has taken place without any improvement in income inequality.” See

Two other Iranian economists, Sohrab Behdad and Farhad Nomani, have also carefully examined economic life and labor in Iran since the 1979 revolution, and have presented a more critical analysis in their recent book, Class and Labor in Iran: Did the Revolution Matter? (Syracuse University Press, 2006)

ILNA Examines the Government’s View:
The Poverty Line Hoax
By Tara Bonyad
Translated by Frieda Afary

You need not travel too far from the city to see the poverty hoax. In order to discover the poverty line hoax, you simply need to turn your head to see the child peddlers and the homeless people who spend their days and nights under freeway bridges.

You need not travel too far from the city to see this poverty hoax. You simply need to open your eyes a little and turn your head. In order to discover the poverty line hoax, you simply need to see the children who hang by your clothes to sell you something, the old women and men who stick out their hands to beg, the women and men who make a living through peddling, or the homeless people.

We enter a street. Children are playing. As soon as they see the camera, one screams out: “Reporters are here. Run away. Tomorrow our pictures will be in the newspapers. Run away.” Each runs in a different direction and disappears in the narrow streets.

Ashkan has a sister and a brother. He lives with his parents, sister and brother in a two-story dilapidated place. His father is a cobbler on the street. His mother cleans homes. His mother says: “But we can’t make ends meet.” Ashkan is a citizen of Tehran. His parents are Afghans. . . .

The Iranian Labor News Agency reports that according to experts, the poverty line in Iran is $850 [per month for a family of four –tr]. If Ashkan’s parents earned half this amount, they could have fixed their home. The first floor is uninhabitable. The entire family lives on the second floor.

In the first press conference of the tenth government [on September 7, 2009 –tr.], Mahmoud Ahmadinejad called the poverty line a hoax. He said that first you have to pay attention to the definition of the poverty line. It changes depending on whether the definition considers minimum needs or less important needs.

Ashkan has a home, a dilapidated one. Are his minimum needs satisfied? Does he live above the poverty line?

The further we walk on the streets, the narrower the streets get. A door is open. Dirty soap suds are seeping out from the bottom. I knock on the door. A beautiful young woman opens the door and calls on someone who turns out to be her sister-in-law. They emigrated from Kurdistan years ago. Her husband went bankrupt four years ago. She says he was a garment worker and a foreman at a production unit. A few years ago, after the introduction of Chinese goods, the business slowed down. It cost this workshop $22 to make a raincoat. But retail stores could buy that item for $14 or $15 [from importers—tr.]. Clearly it is more economical to buy the Chinese goods . . .

According to the Iranian Labor News Agency, between the years 1992 and 2007, family incomes in Iran have increased by 71%. At the same time, family expenses have increased by 1840% . . . In his aforementioned press conference, the president claimed that the addition of 200,000 people to the rolls of the unemployed in one year is not very large, but in fact normal. He claimed that the labor market continuously involves job loss for some and job gains for others. This means that those who are laid off today, may regain employment after a while. Therefore, the labor market is constantly engaged in the exchange of human labor power.

This woman’s husband has not “regained employment” after four years. However, based on the above [Ahmadinejad’s statement about the poverty line—tr] her family does not live below the poverty line. They have food and clothing and a dwelling, in the worst possible way. . .

According to the president, having barely enough food to survive, enough clothing to cover yourself, and a roof to protect you from the rain, constitutes the satisfaction of minimal needs. Thank God we all have that. Therefore, no one lives under the poverty line in Iran.

September 22, 2009

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