Iran International
Tehran’s plan to distribute cash handouts to nearly the entire population appears aimed at calming protests driven by relentless price increases. Whether it will work remains an open question.
Officials say the payments are meant to offset the elimination of a subsidized exchange rate previously used to import essential goods, a policy shift that has already pushed prices higher.
Under the plan, the government would issue monthly coupons worth one million tomans—about $7 at the open-market rate—to every Iranian.
Some economists have questioned whether the measure can achieve its stated aim.
In an editorial published on January 5, the daily Setareh Sobh described the policy as an “economic gamble,” warning that similar efforts in the past had failed to stabilize prices or restore public confidence.
The paper noted that Iran’s currency has lost roughly 20,000 percent of its value since the 1979 revolution, when the dollar traded at seven tomans.
“This devaluation,” the daily wrote, “is the result of policies such as hostage-taking, hostility toward the West and Israel, mismanagement and the exclusion of experts from parliament and government.”
Questions of feasibility
Mahmoud Jamsaz, a leading Iranian economist, went further, arguing that the handouts risk aggravating the very pressures they are meant to relieve.
“Under current conditions,” he wrote, “the president knows very well he lacks the executive power even to pay government employees’ salaries.”
The government has acknowledged inflationary risks. Fatemeh Mohajerani, a government spokeswoman, told reporters on Sunday that the policy could raise prices of some essential goods by 20 to 30 percent.
Labor Minister Ahmad Maydari said the payments would be issued as coupons redeemable for basic commodities, rather than cash transfers, in an effort to limit price pressures.
Still, critics question whether the state has the fiscal capacity to sustain such a program, particularly as tax revenues are already under strain.
A broader breaking point
Public reaction has been largely dismissive.
On social media, many pointed to continued protests despite the announcement, stressing that rising prices were only one factor behind demonstrations that have spread across more than 200 cities and towns.
Sociologist Taghi Azad Armaki told the Shargh newspaper that the unrest reflected “accumulated, unresolved social and political challenges,” adding that economic hardship had exposed deep divides within Iranian society.
“These gaps,” he said, “have eroded the government’s social capital and heightened concerns about the country’s future.”
Reformist commentator Abbas Abdi echoed that concern in Etemad, warning that Iranian society had reached a critical threshold. “Society has a breaking point,” he said, “and Iran is rapidly approaching it.”
Even Iran’s tightly controlled press has increasingly described the demonstrations as political in character, reflecting broader dissatisfaction with governance rather than price levels alone.
For now, the government appears to be betting that targeted relief can buy time. Whether it can ease public anger—or instead accelerate inflation while leaving deeper grievances unresolved—remains uncertain.
Fatemeh Mohajerani said the increase was the result of the government’s decision to end subsidized dollars for essential imports in an effort to stabilize the foreign exchange market and curb corruption, a move that has pushed up the local-currency cost of imports of goods and raw material.
“It is evident that by ending or reducing subsidized and preferential official foreign currency exchange rates, the prices of some items will rise,” she said.
Earlier on Monday, parliament said it had approved the general outlines of the budget for the next Iranian year, which begins in March, after the bill was initially rejected and subsequently amended by the government.
The government described the changes as reforms aimed at improving livelihoods, as authorities seek to ease ongoing anti-government protests and strikes.
The revisions are said to include a pay rise of up to 43% instead of 20%, a cut in value-added tax to 10% from 12%, and the allocation of $8.8 billion in subsidized foreign exchange to curb price rises for basic goods.
The budget was also reported to earmark funds for guaranteed wheat purchases to supply bread and for adjusting pensioners’ salaries.
Lawmakers approved the budget framework with 171 votes in favor, 69 against and six abstentions, out of 246 lawmakers present.
Meanwhile, nationwide protests entered a ninth day on Monday, with merchant strikes continuing in parts of the country.
The unrest began after the rial fell to record lows in late December and has since broadened into a wider test of the government’s ability to manage a country under sustained economic strain.
“Anyone who had money in Venezuela has already taken it out,” Majidreza Hariri said, responding to concerns about Iranian assets worth an estimated two billion dollars.
He added that instability in Venezuela had been evident for at least five to six months, leaving ample time for Iranian funds to be withdrawn, and warned against attempts to use the crisis as a pretext to write off debts.
He said Iran-Venezuela Bank has not functioned as an effective commercial bank in recent years as financial transactions between the two countries were not conducted through this bank.
According to Iran’s foreign ministry on Monday, economic and diplomatic relations with Venezuela remain intact in the wake of Maduro’s arrest, and political developments do not automatically alter bilateral ties.
“Relations between states are based on mutual respect and interests,” said spokesperson Esmail Baghaei earlier in the day.
He said Iranian diplomats and citizens in Venezuela are safe and that Tehran continues to monitor the situation closely.