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Ahmadinejad's Plan to Curb Government Subsidies Threatens to Alienate Recipients
Gasoline? It's 36 cents a gallon. Laundry detergent? Fifty cents for a standard-size box. Milk? About 20 cents a quart. These prices are so low because Iran's government spends half its national budget to subsidize many of life's necessities. Not for long.President Mahmoud Ahmadinejad has launched a sweeping economic restructuring plan that would end many of these subsidies within a couple of months. To blunt the blow of gasoline prices quadrupling and similar increases for other goods, he also proposes to give as much as $70 a month to poor Iranians. Ahmadinejad, a populist leader with a working-class background who came to power three years ago, is staking his political future on his ambitious plan, which threatens to alienate Iranians who have benefited from the subsidies. Known abroad for incendiary rhetoric and his defense of Iran's nuclear program, Ahmadinejad's domestic political standing relies more on his largely unfulfilled promises to use Iran's oil wealth to improve the lives of poor people. Some aspects of the plan, such as a sales tax, have provoked unrest, forcing Ahmadinejad to slow its implementation. The president had said he would present a bill on subsidies to parliament on Wednesday, but the introduction of the legislation was postponed without explanation. Many members of Iran's urban middle class fear that the plan will ruin them. "If the subsidies are stopped, my family will be pushed into poverty. What the president plans to pay us in return will be far too little," said Payman Vatandoust, a technical manager at a battery factory in Tehran who like many highly educated Iranians did not support Ahmadinejad in 2005. Vatandoust's worries are shared by several Iranian leaders, many of them adversaries of Ahmadinejad who accuse the president of proposing the cash handouts to boost his popularity in advance of presidential elections set for June. Ahmadinejad says his "economic evolution" plan will narrow the gap between rich and poor and eventually will help bring down inflation, which has risen to an annual rate of 24 percent, according to Iran's Central Bank. Posted by: Fred 2008-12-05 |
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