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Ahmadinejad cuts Iranian subsidies
President Mahmoud Ahmadinejad said the ambitious plan was a critical part of coping with Iran's ailing economy - burdened by both mismanagement and four rounds of United Nations sanctions - and promised the compensation scheme of $40 per person monthly would benefit 60 percent of Iran's population,[link widoczny dla zalogowanych].
Although recognize the huge cost the subsidies have imposed on the economy - the government says it spends $100 billion each year, though experts suggest it may be one-third that - we are seeing strong criticism,[link widoczny dla zalogowanych], including from economists, politicians,[link widoczny dla zalogowanych], and citizens.
Riot police were deployed at some gas stations in Tehran on Sunday to prevent a repeat from the 2007 violence and protests that came after fuel rationing was announced - stealthily, and late into the evening. So far there have been no reports of unrest due to the long-expected plan.
"I ask the people to not hoard gasoline since it carries many dangers. God forbid, accidents might happen," Mr. Ahmadinejad said on live television, when announcing the first phase of subsidy cuts would begin on Sunday.
The Iranian president invoked the Shiite Messiah,[link widoczny dla zalogowanych], the Mahdi, when describing the compensation plan,[link widoczny dla zalogowanych], noting that two months' worth had already been deposited into personal bank accounts to become withdrawn from Sunday onward.
"This scheme will continue and can continue for many years, because of the divine wisdom,[link widoczny dla zalogowanych], so no-one can annul it,[link widoczny dla zalogowanych]," Ahmadinejad claimed. "The people should not hurry in withdrawing these funds [or] the marketplace is going to be disturbed."
'Ahmadinejad may be the right person to do it'Iran has provided costly state subsidies because the 1979 Islamic revolution. The effort to lessen them is definitely a political hot potato. But Ahmadinejad,[link widoczny dla zalogowanych], that has relatively strong backing the type of that appears to be affected, has said he hopes to wean Iranians off the subsidies completely by the end of his term in 2013.
"Ahmadinejad may be the right person to do it, since the brunt of this adjustment is going to be felt by people below the median income, particularly when you receive into bread,[link widoczny dla zalogowanych], maybe even medicine," says Djavad Salehi-Isfanhani, an economist at Virginia Tech along with a fellow in the Brookings Institution, contacted in Tehran.
Such Iranians,[link widoczny dla zalogowanych], known as the "pious poor,[link widoczny dla zalogowanych]," have formed the backbone from the populist president's support since Ahmadinejad was initially elected in 2005. Many still support him,[link widoczny dla zalogowanych], despite the disputed reelection in 2009, and also the arch-conservative president has taken some unpopular decisions while at the same time enhancing the power of the president's office.
"He said,[link widoczny dla zalogowanych], 'I am using the people, I'm for anyone,' he kept stating that," notes Mr. Salehi-Isfahani. "He am emphatic concerning the fact that they considered everything… 'We know of the truck drivers who operate there,' it was a confidence-building speech."
37,000 clerics deployed to make the caseBut experts are uncertain about the impact or success of the subsidy reforms,[link widoczny dla zalogowanych], in addition to of the ability of the government - which has shown "sheer incompetence" in some economic issues, says Salehi-Isfahani - to transport them out. Making the money deposits ahead of time, however,[link widoczny dla zalogowanych], was "very clever" because it helped counter the deep-seated belief that "the government is a thief," he adds.
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