May 3, 2023
Iranians React With Skepticism To Proposal To Sell Strategic Islands For Pension Funding
A statement by a senior Iranian Labor Ministry official suggesting that Tehran might have to sell some of Iran's strategic Persian Gulf islands to pay pensions has ignited a wave of skepticism and opposition from the Iranian public.
Sajjad Padam, director-general of social insurance at the ministry, said in an interview on May 1 with the Tehran-based 90 Eghtesadi news website that the country may be forced to sell some of its southern islands, including Kish and Qeshm in the Persian Gulf, to pay pensions as the government struggles with financial difficulties amid a deepening economic crisis.
Padam said budgetary difficulties forced the government to shift funds earmarked for infrastructure projects to pension payments.
That led to only 20 percent of the planned 850 trillion rials ($1.6 billion) allocated to construction work being actually used on such work over the past five months, he said.
He also noted that even if Iran were to sell 3 million barrels of oil per day without sanctions and receive the complete sum, it wouldn't resolve the retirement funding crisis.
Prior to sanctions, Iran exported around 2.5 million barrels of oil per day. Now is sells approximately 1 million barrels daily.
The loss of oil profits at current prices amounts to roughly $45 billion annually, equivalent to 1 1/2 times the total government budget for the current year.
Unrest has rattled Iran since last summer in response to declining living standards, wage arrears, and a lack of welfare support. Labor law in Iran does not recognize the right of workers to form independent unions.
Padam's statement generated significant reactions in social media.
Iranian political analyst Ahmad Zeidabadi wrote on his Telegram channel that the warnings given by Padam about the bankruptcy of Iran's retirement funds underscored the fragility of the country's economic situation.
Former political prisoner Hengameh Shahidi highlighted the potential of Kish and Qeshm islands on Twitter, arguing that with proper management and granting some freedom to these free-trade zones, it would be possible for the two islands and their surroundings to generate foreign-currency revenues from tourism.
"This income could replace the money Iranians spend on leisure trips to destinations such as Turkey, the United Arab Emirates, Cyprus, and Malaysia, ultimately benefiting Iran's economy," Shahidi added.