Iran Launches Fifth Phase of Electronic Commodity Coupon System This Week
In a significant move to bolster household purchasing power, the Iranian government is set to roll out the fifth phase of its national electronic commodity coupon system within the coming week. The initiative, a cornerstone of the administration’s social welfare policy, is designed to provide targeted support for essential goods.
A Long-Standing Commitment to Social Welfare
The framework for this system is rooted in the “Comprehensive Welfare and Social Security System Law” passed in 2004. An official from the Ministry of Cooperatives, Labour, and Social Welfare explained that the law’s primary goal was to streamline and target subsidies that were previously dispersed across various executive bodies. The objective has always been to increase the share of support for lower-income deciles while reducing that for higher-income groups.
To centralize these efforts, the Organization for Targeted Subsidies was established in 2010 under the former Ministry of Welfare. However, subsequent administrative shifts moved the organization, first to the Presidential Office and then to the Plan and Budget Organization, which reportedly led to coordination challenges in implementation.
Renewed Focus Under the Current Administration
The current government has placed a renewed emphasis on this program. Following a report on decreased household calorie intake presented to the President and the Supreme Leader, permission was granted to allocate resources for the electronic commodity coupon system, now managed by the Ministry of Cooperatives, Labour, and Social Welfare.
The official highlighted that the government’s main concern is preserving the people’s purchasing power and mitigating the impact of price shocks on family living standards. Four phases have already been successfully executed, and the fifth is poised to begin imminently.
Two Scenarios for Enhanced Support
Authorities are finalizing the details for this new phase, with two primary scenarios under consideration:
- Continuation of the Credit-Based Method: This popular approach, which has garnered a 72% public preference rating according to parliamentary research, involves depositing a direct credit into the heads of households’ subsidy accounts. This credit is then used to purchase 11 essential commodity items.
- A New Hybrid Model: A new combined method is also being explored. If final coordination with the Ministry of Agriculture is achieved, essential goods would be offered at a 20-30% discount in contracted chain stores, while the traditional credit method would continue in smaller retail shops.
The final decision on which method to employ will be announced by the end of the week. The official stressed that the government’s philosophy is to grant more autonomy to the people and minimize direct market intervention, as this has been shown to increase public satisfaction.
Streamlining for Greater Efficiency
The official also addressed the ongoing refinement of the subsidy roster, noting that out of a total population of approximately 72 million subsidy recipients, 17 million have already been removed. An additional 8 million have been recently excluded, with a ongoing process to remove 1 to 1.5 million higher-income individuals per month. This careful streamlining ensures that resources are directed to those most in need.
The official concluded by reaffirming the government’s dedication, stating, “The main goal is to prevent any livelihood tensions, and all our effort is to continue supporting the people’s livelihood with the available resources.” Full details for the launch of the fifth phase will be officially communicated following a final coordinating meeting.