| Some economic nuggets, all bad for ShortRound, in this article. |
TEHERAN - The head of the Iranian central bank resigned on Sunday, the third departure of a key economic policymaker from President Mahmoud AhmadinejadÂ’s administration in just two weeks.
The resignation of Ebrahim Sheibani comes after the unexpected departures of the oil and industry ministers on August 12, a move that was widely seen as an attempt by Ahmadinejad to increase his control over the economy. “The resignation of Ebrahim Sheibani has been accepted by President Mahmoud Ahmadinejad,” government spokesman Gholam Hossein Elham was quoted as saying by the official IRNA agency. He added that the government was seeking to appoint Tahmasb Mazaheri -- the economy minister under Ahmadinejad’s reformist predecessor Mohammad Khatami -- as new central bank chief and the process was now in its “final solution stage”.
No explanation was given for the resignation, which had been widely predicted in the Iranian media.
But Sheibani had reportedly been at odds with Ahmadinejad over a surprise government decision on May 22 to cut interest rates. Both Sheibani and Economy Minister Davoud Danesh Jaafari were reported not to have been consulted over the decision, which many economists considered highly unwise in an economy which was already facing inflationary pressures.
| Wasn't exactly classic Keynesian economics, was it ... |
Domestic politics is also heating up in Iran up as the country enters a crucial period leading to elections for the conservative-controlled parliament on March 14, 2008 followed by presidential polls in summer 2009. The economy will be a top election issue and Ahmadinejad has been criticised for IranÂ’s high inflation and for ploughing windfall revenues from high oil prices into expensive military and nuclear infrastructure projects.
Both the industry and oil ministers issued stark warnings to Ahmadinejad over his economic policies after they quit. Former oil minister Kazem Vaziri Hamaneh, a veteran of the ministry who revealed he had been sacked by the president, said that the country was heading to an energy “catastrophe” owing to high consumption.
Industry minister Alireza Tahmasebi also launched a stinging attack on AhmadinejadÂ’s economic policies in his resignation letter, complaining of under-investment and damaging personnel changes.
Prices of basic goods and services -- especially vegetables and poultry -- have leapt in Iran since the New Year in March, hitting the poor hardest. The central bank has forecast that inflation will reach 17 percent in the current Iranian year to March 2008, compared with an official rate of 13.5 percent last year. But many economists dispute even this figure, and Iranian parliamentary research has estimated that inflation this year is running at 22.4 percent on the back of money supply growth of a colossal 40 percent.
| C'mon guys, you can catch Zim-bob-we if you just try harder ... |
| Apparently Mahmoud has already caught a raging case of Chavez envy... |
Social Security and Welfare Minister Abdolreza Mesri was quoted as saying earlier this month that 9.2 million out of IranÂ’s 70.4 million people were living under the poverty line.
| And unlike the U.S. or Europe, we're talking real poverty here ... |
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