In a significant move to address widespread public discontent, the Iranian government has unveiled a plan to provide direct monthly cash payments to its citizens. This decision comes against a backdrop of intense protests and a severe economic downturn that has drastically eroded living standards.
Direct Payments to Counter Inflation and Unrest
On Monday, the government, represented by spokeswoman Fatameh Mohajerani, announced that the vast majority of Iranians will receive a monthly payment equivalent to approximately $7. The primary objectives of this scheme, as stated by Mohajerani, are preserving household purchasing power, controlling rampant inflation, and ensuring basic food security for the population.
However, the relief offered by this amount is widely seen as symbolic. Analysts point out that the minimum monthly living costs for an Iranian family exceed $200, making the $7 payment a drop in the ocean. At current market prices, this sum would cover the cost of about 100 eggs, one kilogram of red meat, or a few kilograms of staple foods like rice or chicken.
A Year of Economic Turmoil and Public Anger
The government's action is a direct response to mounting social pressure. The economic situation reached a boiling point in December, when merchants, traders, and university students across multiple cities staged protests. These demonstrations led to the shutdown of marketplaces and rallies on campuses, highlighting the deep-seated frustration with the country's financial woes.
The roots of the crisis are starkly visible in key economic indicators. Over the past year, Iran's national currency has lost more than half of its value against the US dollar. Inflation has skyrocketed, with official statistics showing it surpassed 42% in December alone, placing immense strain on ordinary Iranians trying to make ends meet.
Policy Shifts and Funding the New Plan
In reaction to the December protests, the government took swift administrative action, including replacing the governor of the central bank. Last week, it also reformed its currency exchange policy. This policy had previously subsidised imports of essential goods, creating a complex and often corrupt system.
According to a statement released on Sunday, the new direct payment plan will be funded by reallocating the money used for those import subsidies. Spokeswoman Mohajerani clarified that the $10 billion previously spent annually to subsidise certain imports will now be channelled directly to citizens. Labour Minister data indicates that these payments will be made to around 80 million Iranians, constituting the overwhelming majority of the country's population.
While the direct cash transfer model aims to simplify support, experts remain sceptical about its impact. The fundamental issues of currency devaluation and international economic pressures remain unaddressed. The $7 monthly aid, therefore, is perceived more as a political stabiliser than a genuine economic solution to Iran's profound crisis.
