Iranian Society in the 1390s: Greater Inequality Alongside a Shrinking Table

In all countries, class divisions lead to social, economic, and political abnormalities. However, there is a significant difference between societies experiencing intensified social inequalities against a backdrop of economic growth and remarkable increases in national wealth, and other societies that simultaneously lose their productive capacity while also tumbling down a path of wealth distribution bipolarization.

For example, China today has a much more unequal society than during the Mao Zedong era, when, after the victory of the communist revolution in 1949, he ruled the country for nearly three decades.

In contrast, the Chinese, thanks to their legendary growth over the past 40 years, have moved from the hell of poverty to relative prosperity, and in these circumstances, class gaps and the increasing number of billionaires are far more tolerable than the severe deprivations that gripped almost all of Chinese society during Chairman Mao’s tenure, except for a small layer of communist elites.

Conversely, there are other countries where national wealth is collapsing due to the decline of their productive apparatus, yet at the same time, this dwindling wealth is distributed among their citizens in a more unequal manner than before.

Iran is among these countries, and particularly in the years of the 1390s, which is the last decade of the fourteenth century in the Persian calendar, an increasing portion of its population struggles in dire poverty stemming both from the fall in growth rates and skyrocketing inflation, and from the greed and avarice of oligarchs who demand an ever-larger share from this shrinking table of national production at the expense of the country’s most deprived segments.

The Millionaires’ Frenzy

In a report titled “Income Distribution in Iran in 1399,” published last month of Mordad, Iran’s Statistical Center addresses the widening class gap in the country.

When examining income distribution in Iran, the research centers of the Islamic Republic, including Iran’s Statistical Center, primarily use the renowned “Gini coefficient.” This coefficient was developed in the first half of the twentieth century by Corrado Gini, an Italian statistician and demographer, to measure social inequalities, and it is currently the most important index used by countries and international organizations in this field.

The Gini coefficient fluctuates between zero and one. Zero indicates a perfectly equal society, and one represents a completely unequal society. In other words, in a society, the closer the Gini coefficient is to one, the more unequal that society is.

Iran’s Statistical Center stated in its Mordad report that between 1390 and 1399, the Gini coefficient in Iran increased from 0.37 to 0.40. In the same report, we read that last Persian year, the share of the poorest 20 percent of society in total income was only 5.8 percent, while the richest 20 percent of society controlled 47 percent of total income.

The United Nations Development Program (UNDP) in its latest report evaluates the average Gini coefficient in Iran between 2010 and 2018 as 40.8. If we use these statistics as a benchmark, Iran during those years was one of the most unequal societies in the Middle East, which itself is one of the most unequal regions in the world. In the same report, we read that during those years, on average, one percent of Iran’s population, consisting of the wealthiest segment of society, controlled 16.3 percent of total income, equivalent to the share that went to the poorest 40 percent of society.

As mentioned, Iran’s Statistical Center estimated the country’s Gini coefficient at 0.40 last Persian year. In contrast, the Majlis Research Center in a report titled “Review of Support Policies,” published this month of Shahrivar, currently estimates Iran’s Gini coefficient at 0.45 (page 21). If we accept this assessment, the Islamic Republic has created the most unequal society in the Middle East during its 43 years of rule over the country.

Whether we accept the data from Iran’s Statistical Center or what has been published by the Majlis Research Center, there is no doubt that the gap between the rich and the poor in Iranian society is increasing in an alarming manner.

Capgemini Institute in its latest annual report on wealth in the world states that Iran in 2020 rose three places in terms of the number of its millionaires and ranked fourteenth globally. According to this report, the Islamic Republic last year increased the number of its millionaires with a 22 percent jump compared to the previous year (the highest millionaire growth rate among countries in the world) to 250,000 people, and in this regard, surpassed Spain, the Russian Federation, Brazil, Saudi Arabia, and several other wealthy countries.

“Kleptocracy”

The increase in the number of millionaires in Silicon Valley, America, or in China is a normal and understandable phenomenon. The former is the world’s largest hub of cutting-edge technologies that shape the future of the world, and the latter, with a very high growth rate, is the world’s most important exporter. On what real economic levers does the 22 percent growth in the number of millionaires in Iran rest?

While the country is under the pressure of the severest international sanctions, average economic growth over the past 10 years has hovered around zero, there is no sign of foreign investment and tourism, and people are falling to the ground like autumn leaves under the assault of coronavirus, from what source are all these millionaires being satisfied?

This is an extremely bitter question for Iran’s public opinion that, simultaneously with the peak in the number of millionaires in the country, witnesses the day-by-day increase in “garbage collectors.” Finding a direct connection between these two phenomena is not difficult.

In fact, since the wealth of the Islamic Republic’s millionaires is neither derived from invention and production nor from exporting goods and attracting foreign tourists, there is no choice but to seek the root of this wealth, for the overwhelming majority of them, in “kleptocracy.” In other words, these individuals, relying on political or religious power, have achieved sustenance by stripping their compatriots. In conditions where the collapse of national production is making Iranians’ tables smaller, “kleptocrats” do not even spare these shrunk tables for their compatriots, pushing an increasing number of them below the poverty line.

Defining the poverty line in the Islamic Republic has become a tangled mess. Despite legal obligations, the Islamic Republic’s statistical institutions, particularly Iran’s Statistical Center, which is the official body responsible for preparing and publishing the country’s economic and social data, refrain from publishing a very important index such as the poverty line, the identification of which is an indispensable necessity for identifying affected and vulnerable groups and supporting them.

The reluctance of these institutions to publish the criteria determining the poverty line and the population below it is understandable, as fighting poverty alongside addressing social inequalities was one of the fundamental slogans of the Islamic Revolution, and the system born from the revolution can hardly accept that it has been severely defeated in these two sensitive areas.

In these circumstances, to find the characteristics of the poverty line in Iran, there is no choice but to refer to publications of think tanks associated with government and non-governmental institutions of the Islamic Republic, positions taken by professional bodies, especially authorized labor unions, and academic research in the form of books, articles, and university theses.

Here we point to several examples of data related to identifying the poverty line in Iran that have been recently published:

First, in late last year, during tripartite negotiations over setting the minimum wage for 1400, labor unions calculated the poverty line for a household (consisting of 3.3 people) at between 9 to 10 million tomans per month. Due to the role of these unions in bargaining over the minimum wage, this assessment naturally faced objections and the unions in question were accused of exaggeration.

According to international standards, the figure presented by labor unions for determining the poverty line of a household in Iran is not unrealistic. In World Bank calculations, for the income group of countries in which Iran is located, the poverty line is equivalent to $3.20 per day.

If we apply this standard to a household of 3.3 people, the poverty line reaches $317 per month, which, if calculated based on the dollar price in Iran’s free currency market, is approximately equivalent to labor unions’ estimate of the poverty line in Iran (between 9 to 10 million tomans per month).

Second, Morteza Bakhtiari, head of the Imam Khomeini Relief Foundation, also said in late Mordad last year: “The poverty line (for a household) has increased from 950,000 tomans in 1390 to 10 million tomans in 1399.” According to him, during the period from 1380 to 1398, 33 percent of the country’s population fell below the multidimensional poverty line.

Despite ambiguities and confusion in Morteza Bakhtiari’s discourse on the poverty line, his statements cannot be taken lightly, because the very powerful organization under his supervision (the Imam Khomeini Relief Committee) is almost certainly obliged to use specific criteria in identifying the individuals under its coverage, of which the poverty line is naturally one.

Third, per capita consumption of at least 2,100 calories per day is one of the most important criteria in assessing the poverty line. In a 52-page report titled “Proposed Program for Economic Reforms,” prepared by the “Research Center of the Iran Chamber of Commerce, Industries, Mines and Agriculture” on the occasion of the start of Ibrahim Raisi’s administration, referring to the decline in calorie consumption in Iran, we read: “From 1396 onwards, more than 50 percent of people have consumed less than the required amount (2,100 calories per day).”

In fact, Iran’s Chamber Research Center, relying on “official reports,” states that 50 percent of Iranians live below the poverty line. From this center’s perspective, half of Iranians cannot meet their daily calorie requirements because their country has not grown in the past 10 years, after Venezuela, Zimbabwe, and Sudan, it has had the world’s highest inflation rate, its investment rate over the past 10 years has mostly been negative, and its share of the global economy has been halved over the past 40 years.

Fourth, and finally, Iranian media have recently reflected some excerpts from a Tehran Chamber of Commerce report, quoting Kaveh Zargaryan, a member of the Board of Representatives and head of the Agriculture and Food Industries Commission of the institution. This report has not been published for certain reasons, but what has been raised by Kaveh Zargaryan shows what has happened to the people’s tables. According to him, between 1390 and 1399, household consumption of seafood was halved, and consumption of red meat also declined by 46 percent. During this same period, consumption of sugar and candy, rice, and dairy products decreased by 33, 25, and 17 percent, respectively.

From the totality of this information, a grim picture emerges: the dancing of newly-minted millionaires around plundered tables.

Source: Radio Farda