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Last Updated: Sep 8, 2008 - 8:30:18 AM |
In his 2005 election campaign, President Mahmoud Ahmadinejad
famously promised to bring Iran's "oil [money] to the table of every
Iranian." Oil prices may have more than tripled to over $130, but few
Iranians see benefit. Across the Iranian political spectrum, officials
and even the president's former allies have blamed Ahmadinejad's
policies for runaway inflation and shortages of basic commodities.
Outgoing Finance Minister Davoud Danesh-Jafari, acknowledged Iranians'
frustration as he stepped down in May 2008, "In economics, a government
is not judged by its intentions."
As Ahmadinejad increases subsidies and spending, inflation has become
Iran's chief domestic issue. While the government acknowledges an
inflation rate of
18 percent, parliamentarians and central bank officials say the real
rate is closer to 25 or 30 percent.
Inflation has hit certain commodities hard. This past winter, bread
prices increased between 200 and 700 percent across northern Iran. To
alleviate prices, the government shipped bread from Tehran to the
northern prices, sparking shortages and bread lines in Tehran. As a
brutal winter dumped record snow across northern Iran, the
Revolutionary Guards deployed to northern Iran to counter potential
unrest amidst gasoline, kerosene, and electricity shortages.
Inflation continues. According to the National Bank, rice prices rose
90 percent this spring. The price of other basic foodstuffs has
increased 30 percent. On May 19, the head of the Butcher's Guild
complained that declining purchasing power was undercutting the
public's ability to eat meat, once a staple of Iranian cooking.
Politicians are distancing themselves from their president.
Parliamentarian Hossein-Ali Shahriari, an ideological ally of
Ahmadinejad, quipped, "The economic team of the government is the main
reason behind rising prices." Former President Ali Akbar Hashemi
Rafsanjani quipped, "You can't improve the economy by raising beggars."
Ahmadinejad has remained stubborn in the face of accelerating
inflation. He has ordered bank to lower interest rates to ten percent
and clashed with the director of the Central Bank after he refused.
Sarmayeh, Iran's main financial daily, ridiculed Ahmadinejad's new
finance minister after he denied any relationship between interest
rates and inflation. As the Central Bank issues 100,000 rial notes for
the first time, the government's only proposed solution is to knock
zeros off Iran's currency. Ahmadinejad refuses to accept responsibility
and instead, in a number of speeches in April and May, has blamed
shadowy mafias and conspiring competitors.
Austerity measures have failed due to lack of fiscal discipline. Upon
questioning, Oil Minister Gholam-Hoseyn Nowzari acknowledged that the
Iranian government spent $4 billion above budgetary limits to import
gasoline obviating the self-sufficiency sought by rationing.
Privatization schemes have also languished. While announcements of
impending factory privatizations are many, sales are few. The reformist
daily Aftab-e Yazd observed, "The misguided policies of the government
hit us harder than the sanctions of the foreigners."
As tempers rise, however, Ahmadinejad calls on Iranians to have faith.
During the Islamic Revolution, Ayatollah Khomeini famously quipped,
"You can't have a revolution over the price of a watermelon." As the
Islamic Revolution nears its 30 year anniversary, Ahmadinejad may test
that proposition.
Source:Ocnus.net 2008
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