According to the latest official information released between 1998 and 2002, relative poverty line has decreased from 20.50 to 19.60 in urban areas and increased from 16.30 to 16.60 in urban areas. Also, official figures denote that 9 percent of total population is deprived of the least food energy and 6 percent of the population is below 2-dollar poverty line, which indicates extreme poverty. Therefore, in view of expert views on expansion of poverty, it seems that Iran is facing major challenges for reducing poor population by half until 2015. The most important of those challenges are as follows:

1. Non-realization of sustainable economic growth

Realization of long-term goals of economic, social, and cultural development, especially social justice, is closely related to economic growth and prosperity. Absence of sustainable economic growth will pave the way for persistence of poverty and deprivation. The higher the economic growth rate, more resources would be available to the society to create jobs, promote production and social development and eradicate poverty and deprivation. However, due to dependence of goods and services market to imports, the country’s economic structure is vulnerable and, as a consequence, economic growth rate is currently low and may continue to be so in the future.

2. High inflation

During recent years, as share of domestic production has shrunk, goods and service markets have been awash with imported foreign products.

While the number of countries with a two-digit inflation rate is on decline, Iran has been grappling with that problem for the past 30 years. The Fourth Economic Development Plan has envisaged a ceiling for drawing from the Oil Stabilization Fund which aims to prevent expansion of liquidity as a result of excessive use of oil revenues to fund projects. However, it seems that huge withdrawals from the fund by the government have led to heavy inflation. The result of monetary and financial policies adopted in 2005 was 35 percent rise in liquidity and that trend continued into 2006. That situation combined with reduction of bank profit rate would lead to inflation and negative impact of high inflation on the economy, including expansion of liquidity and unequal distribution of income, has dealt serious blows to less fortunate social classes. Economists believe that expansionary policies adopted by the government will worsen poverty, widen class divide, and exacerbate inflation and unemployment. Therefore, the inflation, which has had negative impacts on salaries, has also exacerbated poverty and inequalities and has paved the way for more poverty and deprivation by worsening recession and slowing down production.

3. Monetary and financial policies

As said before, the Fourth Economic Development Plan has thought of mechanisms for spending oil revenues and the government has been obliged to delegate part of its powers to the private sector and focus on supervision. However, a review of government’s expansionary policies as reflected in two budgetary supplements of 2005 and the budget act of 2006 as well as excessive withdrawal from the Oil Stabilization Fund has oversized the government and thwarted its economic plans. In short, selling oil as a capital commodity to earn petrodollars and converting part of that revenue into rials which are poured indiscreetly into the market as well as publishing new banknotes has expanded liquidity in the market and led to untoward economic phenomena such as high inflation, which lead to more widespread poverty.

4. Unemployment

Creating new jobs and generation of wealth for the poor will mean less vulnerability to various risks which threaten them. Therefore, employment plays an important role in increasing financial abilities of families.

Job creation calls for suitable business environment and active presence of the private sector in addition to attraction of foreign and domestic investments. However, statistics indicate a two-digit unemployment rate while some policies are worsening the situation and increasing the number of jobless people.

One of those policies was increasing workers salaries by 50 percent. Although salaries in Iran are lower than the developed countries, temporary solutions and inattention to economic factors including unemployment as a result of pay rise, cannot be effective. In reaction to pay rise, many workers lost their jobs because when base salary increases, economic corporations would have no choice but to reduce number of employees and reduction of demand for labor force would increase unemployment which will, in turn, lead to poverty and deprivation, especially among less fortunate social classes. Such a situation would undoubtedly lead to social crises.

5. Subsidies

Government revenues and expenses affect poverty directly or indirectly. Payment of subsidies is among the most important policies of the government and a big part of the annual budget is allocated to such subsidies which are paid on price of essential goods. However, most experts maintain that payment of subsidies has not only done nothing to alleviate poverty and deprivation, but has also led to spread of poverty. Sugar and cooking oil are goods whose prices are subsidized. Statistics show that per capita consumption of sugar and cooking oil in the country is higher than the recommended amount which is not detrimental to health and, as a result, the number of patients with cardiovascular diseases is increasing. Gasoline subsidy has also had no benefit but excessive increase in motor traffic, air pollution, environmental destruction, and increased incidence of respiratory disease. As said before, the government also subsidizes the production sector. Domestic industries avail of inexpensive fuel up to subsidized raw materials. Some experts maintain that one of the most important factors that have led to underdevelopment of the country is payment of subsidies through revenues earned by selling national resources. Economic policies are based on crude oil prices and fluctuation in those prices in addition to misallocation of budget has, thus far, widened the gap between the poor and the rich. Therefore, experts have frequently noted that the system of subsidies is ineffective and, at times, even unfair.

6. Imports

During recent years, as share of domestic production has shrunk, goods and service markets have been awash with imported foreign products. In other words, domestic production has not increased in proportion to corresponding increase in demand, but those demands have been met through raising imports.

The trend is such that total value of imports was announced at over 39 billion dollars in 2005. In fact, as a result of record high oil prices and corresponding rise in oil revenues, domestic markets have been teeming with foreign goods. There is no doubt that reduced oil price will lead to many restrictions including forced reduction of imports and high inflation. Apart from that, excessive imports despite urging citizens to consume domestically produced goods, will lead to closedown of domestic plants, increased unemployment and higher rates of poverty and deprivation in the society.

According to human development indexes, when it comes to gender equality, Iran stands 78^th among 140 countries while gender equality ranks for some neighboring countries are 97 for Bahrain, 70 for Turkey, 39 for Kuwait, and 60 for Oman. Increased number of female university students compared to their male counterparts has always been mentioned by concerned officials as major evidence to establishment of gender equality and improved situation of women. However, unemployment among girls graduating from high schools and high educational centers is a major challenge. Various statistics show that unemployment for university graduate girls is 28 percent in cities while unemployment rate for girls graduating from high schools is 50 percent nationwide. Of course, it should be noted that the figures pertain to girls who are allowed to work and look for a job. Employment rate for women has decreased from 12.6 percent in 1966 to 9 percent in 2001. However, in recent years, it resurged to 14 percent.

Therefore, the highest rate of unemployment for women pertains to 1986 and in industry. From 1978 to 1986, each year, 24,000 women have been discarded by the industry sector. According to a report by the United Nations, Iran enjoys the fourth lowest revenue for women compared to men in the world. Average earning of the Iranian women is 28 percent of the men. No accurate statistics are available on share of women in manpower and their share of economic activities and determining employment status of the Iranian women is difficult due to ethnic, cultural and social factors; absence of good tools to consider women’s work at home and traditional workshops and also because household jobs undertaken by rural women, including handicrafts, are not taken account of in official figures. However, existing figures show that share of women in public sector jobs has never gone past 16.4 percent while the figure is more than 36 percent for men. There are 10 job groups for urban women while job groups for rural women are limited to 6.

A major obstacle barring serious presence of women in various social and economic areas is cultural notions and unsuitable economic situation of the country.

According to statistics, one health instructor is needed for every 750,000 schoolchildren to maintain health and sanitary standards. Due to lack of suitable coordination between Ministry of Education and Ministry of Health and Medical Education since 25 years ago, implementation of "health instructor" plan has been forgotten. Our country currently needs 25,000 health instructors, whose presence at schools, especially girl schools to answer physical and sexual needs of youngsters, should be considered a requirement for sustainable development.

According to studies carried out by the United Nations Children Fund (UNICEF), more than 500,000 Iranian children are suffering from extreme hunger and more than one million children live below the poverty line. Those children are also deprived of a home, suitable schooling, as well as good food due to extreme poverty of their families and their emotional needs are not taken care of. Malnutrition and low sanitation in less developed provinces of Iran such as Sistan and Baluchestan, West Azarbaijan, and Hormuzgan, lack of equal educational opportunities for boys and girls and high number of dropouts for girls in elementary schools in addition to child abuse and exploitation are major obstacles to sustainable human development in Iran.

According to head of UNICEF’s children support fund, about 11 percent of the Iranian infants are underweight and in some parts of the country, one out of four Iranian children suffers from malnutrition. He has stressed the need to take political and social measures to fight malnutrition and has noted that the sole way for that problem is concerted and organized efforts by organizations responsible for health, provision of healthy water, education, increased infant care and establishment of special centers to take care of children. However, the official still maintains that although half of malnourished children live in Sistan and Baluchestan, Khorasan, Hormuzgan, Fars, and Kerman provinces, Iran has no clear framework for such measures.

Supplying nutrients especially those needed by mothers and women is of high importance. A national study on nutrition in 2002 has shown that 40 percent of pregnant women suffer from iron deficiency and 44 percent have zinc deficiency. Therefore, fighting malnutrition is needed for women, especially pregnant ones.

There is no doubt that any improvement in health status of women and mothers is not solely dependent on adequate health series, but other factors such as reduced fertility, increased education, access to specialized treatments, access to primary healthcare, training of health staff and availability of needed facilities also play a part.

According to a report issued by AIDS Office of the Iranian Ministry of Health and Medical Education, the number of patient infected with HIV virus has increased by 5.2 percent up to October 2005 compared to a year before. During the same year and in summer and fall (June 2005 to January 2006) the number of AIDS patients has increased by 11.8 percent. At present, HIV infection among drug addicts (who make up over 18 percent of known patients) has been estimated to stand somewhere between 5 percent and 25 percent.

Unfortunately, no exact figures can be produced on AIDS and incomplete figures show that public understanding of the disease has got to be changed. Figures, however, show that the number of infants born with AIDS, who have contracted AIDS from their mothers through blood-borne transmission, is on the rise. If the current trend continued, the number of pregnant women with HIV infection will hit 1,700, which can increase the number of children suffering from AIDS up to 30 percent. Observing prevention methods for women whose husbands are AIDS patients is a way for tackling this problem, which in turn, hinges on promotion of public education.

According to a report issued by the World Bank, each year, 125,000 hectares of forests are destroyed in Iran. On the other hand, Food and Agriculture Organization (FAO) has reported that Iran ranks the 16^th in terms of producing industrial woods in Asia by producing one million cubic meters of industrial woods. Despite those figures, destruction of forests is raging on. Each year, 600,000 hectares of forests fall victim to shortage of fuel in such areas, on the one hand, while 75,000 families live in forests who account for destruction of 13,000 cubic meters of woods per year, on the other hand. Population density in north Iran has encouraged construction activities on the shores of the Caspian Sea. According to the latest figure, 1.5 tons of hospital waste and 2,000 liters of wastewater enter water sources in Mazandaran province everyday. In addition to problems with burying wastes, since there is no specific organization to take care of separating various kinds of garbage and recycle them, increased garbage will be followed by increased frequency of various diseases. Each year, 14,000 hectares of forests lose their natural plants or are used for other purposes and the trend is taking more speed year after year. Apart from the said factors, excessive grazing by, at least, 6 million head of livestock does away with saplings, which can be used to revive half a million hectares of forests per year. Soil erosion in north Iran has been estimated at 15-25 tons per hectare per year according to local conditions while it will take a long time before a small amount of soil is formed.

According to the World Bank report, losses resulting from cutting trees in north Iran will amount to 906 million dollars per year, which is equal to one percent of gross domestic product. More than 106,000 cubic meters of woods were cut in 2004 while 257,000 cubic meters were collected to be used as fuel. Apart from economic value of forests, they are also very important in preventing flooding. According to available information, 74 percent of 421 cases of flooding in Iran during the past 20 years has occurred in north Iran, so that, flooding in this region has increased seven-fold compared to 40 years ago. FAO has estimated the total area of the Iranian forests at 7.3 million hectares while in 1977 the figure announced by FAO was 21 million hectares. Destruction of forests is not limited to north Iran. Shortage of fuel in Zagros Mountains has led to annihilation of 100,000 hectares of forests in those parts.

Water resources are among the most contaminated resources of the country. According to the latest studies, nine biggest rivers of Iran, namely, Sefid Roud, Karkheh, Simineh Roud, Zarrineh Roud, Helleh, Gorgan Roud, and Haraz and two international rivers, that is, Atrak and Aras need urgent attention and a comprehensive plan for decontaminating those rivers should be carried out by establishing decontamination stations.

Sepid Roud should be singled out as the most contaminated river in Iran. In 2005, 1,840 tons of nitrate and phosphate has been discharged into the Caspian Sea in addition to more than 15 tons of various pesticides and herbicides to make Sepid Roud and the Caspian Sea the most contaminated water basins of the country. Southern rivers which lead to the Persian Gulf are also seriously contaminated. According to statistics released in 2001, Khuzestan province has the highest number of contaminant industrial sewerage and 36 percent of industrial workshops and plants send the wastewater into Karoun and Dez rivers. Each year, 25,000 oil tankers cross the Persian Gulf and about 2 million barrels of crude oil is spilled into the water. On the whole most rivers in Iran are contaminated somewhere between 70 percent and 100 percent.

Illegal construction is another factor which is seriously threatening water resources. Director of Tehran province Department of Environment has noted that illegal construction activities along Jajroud River and Latian Dam, which supply one-third of Tehran’s drinking water, is greatly threatening water resources of the capital city. On the other hand, manipulation of wildlife habitats has made them insecure to various animals and led to problems for winter and summer immigrations.

Air pollution in most big cities of Iran is another impediment to sustainable development of the environment. Imbalanced and one-dimensional development of Tehran has created dangerous conditions, so that, according to figures released by Behesht Zahra Organization, mortality of patients with respiratory diseases has increased fourfold. Today, 10-15 percent of the population is suffering from various allergies which stem from air pollution.

According to a report issued by the United Nations, Iran ranks low among 118 countries assessed for energy efficiency: in return for consumption of every unit of energy in Iran, which is equal to one kilogram of crude oil, only 3.1 dollars is added to the gross domestic product. On the other hand, increased power consumption is a major reason which exacerbates environmental pollution. In most countries, the rate of growth in power consumption stands at 2-3 percent while the figure for our country is 10 percent. Power consumption by home appliances in Iran is still eight times that of the global average. Construction sector in Iran also uses 2.56 percent more energy than world average. Excessive consumption and low efficiency of energy in Iran, which includes everything from gasoline burnt by cars up to power plants, has had its untoward effects on the environment.

On the other hand, some experts maintain that development is dependent on the realization of true liberties of citizens such as political liberties, citizenship rights, civil rights, freedom of expression, as well as freedom of the press and media while considering underdevelopment as a spinoff of inability of citizens to choose.

It seems that the international community is bent on improving the situation in countries which have been suffering from underdevelopment for years. If international will exists to do this, the main burden should be shouldered by governments and nations which consider development as the main prerequisite for effective presence in the modern world and predict the future only through changing the present conditions.