Iran Says It Can No Longer Afford Ahmadinejad’s Cash Handouts

Rouhani Administration Signals Intention to Cut Cash Allowances

Iran’s Minister of Labor and Social Welfare Ali Rabi’i is saying Iran can no longer sustain the billions of dollars neded to pay cash handouts enacted by former president Mahmoud Ahmadinejad, signaling plans to halt them.

The handouts began as a partial replacement after government subsidies on staples such as electricity, gas, water and bread were reduced or cut altogether. In an open letter published today, Rabi’I wrote that change was needed as the bill for monthly payments of 445,000 rials (around $14) to individuals was too high. 78 million Iranians, out of a population of 80 million, receive the cash each month, or nearly one billion dollars a month.

“We should face the reality; reforming the current allowance payment is a major step toward increased social justice,” Rabi’I wrote in his open letter.” (IRNA/The Guardian, 19 May)

As the government pushes the subsidy reform program, it continues cash payouts, which have become a lifeline for the poor and unemployed.

“Since 2010, 500,000 people have lost their jobs in development projects,” Rabi’I assed. “This is the result of (government) raiding development funds in order to pay cash allowances.”

File photo: Iran’s Minister of Labor and Social Welfare Ali Rabi’I (IRNA)