Iran Economy NewsThe State of Iran’s Misery Index

The State of Iran’s Misery Index

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In 2013, during the Presidential election campaign in Iran, Hassan Rouhani, who at the time was running for the presidency, promised to create such an economic boom that people would no longer need a 45,500 toman subsidy.

These promises gave the people a greater sense of well-being. Even after Rouhani become the president for now eight years, he repeatedly made promises of greater prosperity to the people, and even announced in September 2019 that, “as the representative of the Iranian nation, I am ready for any sacrifice, a sacrifice that leads to the realization of the rights of the people and a sacrifice that leads to the welfare of the people.”

Now, with only 100 days left of the eight-year term of the government of prudence and hope, it is better to answer the question of whether this promised welfare was achieved? And the simplest way to prove this are the economic statistics used for this purpose.

In economics, three rates are very important, and by examining these three rates, one can get an overview of the economy. These three rates are: the economic growth rate, unemployment rate and inflation rate.

The two rates of unemployment and inflation, however, are more important to people because, firstly, they feel their increase and decrease daily, and secondly, their changes can have a great impact on their lives. Therefore, given the importance of these two rates, in the early 1970s, Arthur Melvin Okun used these two economic rates to create an index called the Misery Index.

This index, as its name suggests and its calculation method, does not indicate positive and promising events in the economy. In later years, economists such as Robert Barro, Steve Hanke, and others, tried to calculate the misery index more accurately by adding other variables such as GDP, GDP per capita growth rate, interest rates, and housing inflation.

Iran's misery rate
Iran’s misery rate

Since with the increase of the misery index level, the welfare of society is directly affected, this index can be considered as one of the most important criteria for measuring the performance of governments and their survival.

The lower the numerical value of this index, the greater the welfare of the people, and this indicates the better performance of governments. Conversely, the higher the numerical value of this index, it means that the level of welfare of the people has decreased. As a result, the performance of governments in such cases will be questioned.

The chart below shows the misery index from 1997 to the summer of 2020. As can be seen from the chart below, the misery index in 2013, when Rouhani’s government took over the helm of the executive branch, was about 43.2 percent.

This index reached 46% by the end of 2020. In other words, according to the misery index, the welfare of the people has decreased in these years, despite all the promises made for greater welfare by the regime’s government. And this number is hitting a record during this period of 23 years.

The main reason for the increase in the misery index in recent years has been the upward and terrible trend of inflation. And inflation caused by the regime’s corruption and over-spending on its nuclear and missile projects and meddling in the Middle East.

Eventually, the government resorted to printing money and growing liquidity to escape its predicament, which led to further inflation and a subsequent jump in the misery index.

The welfare of the Iranian people is not good these days, and the promises made to increase the level of welfare have not been fulfilled, and now government officials are claiming in a ridiculous way and are happy that they did not allow a famine to break out in the country.

The only way for the next government to get rid off this catastrophe is to stop all its missile and nuclear programs and its interference in the region, then it should provide a program to increase the people’s welfare, by taking control over the inflation and decreasing the unemployment rate, otherwise they will face the people’s fury. But as the experience over the past 40 years shows, this way is impossible for the regime.

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