Wednesday 20th Feb 2019 

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News: Iran Economy

A Look at Iran's Bankrupt Economy and People's Distresses

NCRI - Last week, the price of U.S. Dollar was up from 3791 to 3797. Price of each newly designed Bahar Azadi gold coin reached one million and 169 thousand tomans, a 5600 toman increase compared to its price a day before.

As for the stock exchange, shares of seven auto manufacturing groups were traded lower in the capital market, according to gold and jewelry union website.

According to a report by state-run Shahrvand newspaper on February 9, 2017, 11 percent of Iran’s population are below absolute poverty line, with another 30 percent below relative poverty line. Put simply, the meaning of these two indicators is that people under absolute poverty line are not able to provide their least basic needs. Specifically, of the 10 items in household expenditure, including food, clothing, housing, education, healthcare, etc., none can be afforded by people below absolute poverty line. Hunger and malnutrition are the complications of this type of poverty. With 11 percent of Iran’s 80-million population below absolute poverty line, it means that eight million 800 thousand Iranians are living in such a miserable situation. It should also be noted that this is the least figure given. There are other regime’s experts who have even pointed to 30 percent.

As for the relative poverty line, it refers to people whose income are lower than standard household spending level, so that if for example the poverty line is set at three and a half million, naturally those with lower income will be considered below poverty line.

With 30 percent of Iran’s population below relative poverty line, it means that nearly 24 million Iranians are living under such conditions. This figure, again, is much less than the real figure, since if you just consider Iran’s 13-million workers community, it accounts for a 40-million population with their families included. And all the workers are paid below poverty line, which accounts for more than 50 percent of Iran’s population. Some regime experts have announced that more than 80 percent and even 90 percent of the population are below poverty line.

This week, the amount of debts owed by Rouhani’s government to banks reached 210 thousand billion tomans, a 20 percent increase compared to the same period last year, according to the Central Bank.

Also it was in the news that Rouhani’s government assigns public companies to banks in order to pay its debts as it’s struggling with shortage of credit. This, however, is not going to solve the problem as the companies assigned are mostly loss-making ones and as Rouhani’s Minister of Economic Affairs and Finance ‘Tayebnia’ has pointed out on February 14, “the companies the government gives over to banks as debt, are really not worth a dime, with most of them being loss-making companies that have irregular financial statements.” (State-run Asre Iran, February 14, 2017)

As for the dire situation of banks, both structurally and in terms of corruption within them, Rouhani’s economic adviser ‘Masoud Nili’ said this week that “the banking system has been hit more than any other entity by bad policies, particularly over the past ten years, and there’s no sign of a turning point, either.”

“Iran’s economy is at a historic juncture”, Nili added, “The decision makers have no option but to choose between bad decisions and hard decisions. Iran’s future economic path can only be paved by reviving its lost social capital.” (Revolutionary Guards’ Fars news agency, February 14, 2017)

And now a report by the Central Bank on high prices of basic commodities. According to this report, during the period leading to February 10, 2017, the price of basic commodities have risen 31.7 percent for rice, 21.7 percent for grains, 27.5 percent for fresh fruits, 5.1 percent for fresh vegetables, 7.3 percent for red meat, 13.5 percent for chicken, 23.9 percent for sugar and sugar loaf, 12.9 percent for tea, 8.4 percent for vegetable oil and finally 9.7 percent for dairy products. (state-run Taraz website, February 14, 2017)

 

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