As protests sparked by economic hardship show little sign of abating, the Iran government rolled out a plan to pay citizens about $7 a month for living expenses. But with the root causes of the economic crisis unresolved, most observers say this stopgap measure is unlikely to have a real effect.
On the 5th (local time), the Jerusalem Post and other outlets said the Iran government announced it would provide about 80 million citizens with 1 million toman per month (about $7; about 10,000 won) for living expenses. Spokesperson Fatemeh Mohajerani explained the goal of the move is "to maintain household purchasing power, curb inflation, and ensure food security."
With support of about $7, people can currently buy roughly 100 eggs, 1 kg of red meat, or several kilograms of rice or chicken at Iran's price levels. Funding will be drawn from the $10 billion that has been spent annually on subsidies for some imports. The Iran government said it will provide the living-expense support in the form of vouchers that can be used to purchase specific goods for those who meet eligibility requirements.
The protests in Iran began on the 28th and have spread to 22 of the country's 31 provinces. Iran fell into a full-blown economic crisis after then-U.S. President Donald Trump declared a withdrawal from the Iran nuclear deal (JCPOA) in 2018 and reinstated sanctions on Iran. On top of that, with the war with Israel, the value of Iran's currency has fallen by more than half against the dollar over the past year, and inflation topped 42% in December last year.
As people, no longer able to endure it, poured into the streets, the Iran government hurriedly replaced the Central Bank governor and revamped its exchange-rate policy that had provided subsidies for importing certain essentials. But the fervor of the protests has hardly subsided and has instead intensified as young people joined in. As the protesters' demands expanded beyond resolving the economic crisis to calling for the resignation of Iran's supreme leader, Ali Khamenei, the Iran government ultimately moved to calm public anger through cash support.
The outlook for the measure is largely negative. Esfandyar Batmanghelidj, founder of the U.K. think tank Bourse & Bazaar Foundation, said, "For the middle class, the amount is too small to meaningfully raise living standards, though conditions for the very poorest could clearly improve," but added, "Support at this level is not sufficient to ease the economic pressures most Iranians face."
Since Iran's economic crisis stems from international sanctions, some say a fundamental fix is needed. The New York Times (NYT) said, "Far broader policy changes are required to reverse the crisis," adding, "This includes nuclear talks to lift sanctions, as well as a strong crackdown on economic mismanagement and corruption that have deepened wealth inequality."
The Iran government is grappling with how to handle protest crackdowns. It has put forward conciliatory measures, but there were also foreign media reports that it is preparing to flee to Russia and other countries in case it fails to suppress the protests. To make matters more complicated, U.S. President Donald Trump has repeatedly warned that if Iran's authorities use deadly force against protesters, "the United States will rescue them." Since Trump recently captured Venezuela's President Nicolás Maduro, some analysts say the Iran government is in no position to suppress the protesters by force.