IRAN MIGHT BE MOVING TOWARD A BIG
Overshadowed by the recent turmoil in Iran, the government has been making strong moves toward introducing something very much like a basic income guarantee. According to Hamid Tabatabai, of the International Labor organization, “In January 2010, the Majles (Iran’s parliament) adopted a far-reaching law that progressively replaces subsidies on energy and basic goods with direct cash transfers to the population. The subsidies run into tens of billions of dollars annually, mostly on fuel, and benefit the richer strata of society more than others. Half of the proceeds will be passed on directly to the people through their bank accounts, with the rest used to boost the development of agriculture and industry and strengthen the country’s social security system. Estimated at some 10 to 20 billion dollars in the first year, the transfers would be unconditional, i.e. without any quid pro quo, and universal, except for households who opt out by failing to provide the needed information about their composition and socioeconomic status. In setting the amount of the transfer to each household the law requires consideration of household income but the most important factor is likely to be the household size. Implementation will begin in spring 2010 and take five years.”
Cash transfers are not new in Iran; a variety of programs have been in place for years, but many Iranians, including many in government, see that too much of the benefit of existing programs goes to already well off people. According to Tabatabai, “the concept of a universal, unconditional and regular cash grants emerges almost seamlessly as a by-product of an attempt to address the shortcomings of the present system. However, even if a BIG proves to be a logical and feasible proposition from economic and social perspectives, its prospects would depend on how the subject is broached and argued in the highly charged political environment in the country.”
The situation is developing rapidly as the content and implementation strategies of reforms are being worked out. Tabatabai will present a paper on the Iranian situation at the Thirteenth BIEN Congress in Sao Paulo this June.