News; News & Events

IRAN: Parliament slashes cash subsidies to citizens

A story that brought much excitement to Basic Income News six years ago may be winding to its end.

In 2010, Iran became the first country to pay a de facto basic income to its citizens–a policy that emerged as a byproduct of a pressing demand to reform the nation’s system of fuel subsidies.

At that time, the Iranian government determined that it would dedicate half of its oil revenues to government services and businesses, while distributing the other half in the form of unconditional cash payments to all citizens. The monthly amount was equivalent to about 40 USD, paid to heads of households.

Within a year, however, the government began facing difficulty in financing the subsidy program, and eventually resorted to asking comparatively well-off citizens to voluntarily opt out. As a result of the requests, about two-and-half million citizens began declining their subsidies, while 73 million retained them.

But these voluntary withdrawals from the program proved insufficient to halt Iran’s growing budget deficit–and, in January 2016, the government announced that it would remove an additional 3.3 million Iranians from the subsidy program, as determined based on an assessment of their financial situation. (For example, as the New York Times reported, one middle-class merchant was unenrolled after purchasing a car worth $7000.)

Finally, in April, the Iranian parliament approved a bill that will result in the loss of the cash payments to about 24 million citizens — nearly one-third of the population. The cuts will go into effect in September of this year.

For more about the recent cuts in the dividend, see:

Khatereh Vatankhah (Apr 26, 2016) “Outgoing Iran parliament moves to radically cut cash handouts,” Al Monitor.

For more on the history of the Iranian oil dividend, see these previously published columns in Basic Income News:

IRAN: On the verge of introducing the world’s first national basic income” (Aug 12, 2010) by Karl Widerquist

IRAN: Economic reforms usher in a de facto basic income” (Nov 9, 2010) by Yannick Vanderborght

IRAN: Basic Income Might Become Means Tested” (Jan 18, 2012) by Karl Widerquist

Iran’s Citizen’s Income Scheme and its Lessons” (May 21, 2012) by Citizens’ Income Trust

Image Credit: dynamosquito at flickr

Kate McFarland

About Kate McFarland

Kate McFarland has written 503 articles.

I mostly do stuff that interests me and wait and see where it leads next. I used to be the lead writer for Basic Income News, and now I am not. Right now, my life is an open-ended adventure, which you can follow at a safe distance via my recently launched blog, uselessliving.wordpress.com. I oppose the direct monetization of my advocacy-related writing and other labors of love; however, I accept donations on Patreon (where all content is free and none "patron only") and PayPal.

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The views expressed in this Op-Ed piece are solely those of the author and do not necessarily represent the view of Basic Income News or BIEN. BIEN and Basic Income News do not endorse any particular policy, but Basic Income News welcomes discussion from all points of view in its Op-Ed section.

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