Economic restructuring in Iran
Economic realities align with some populist goals of Iran's president, and the government announced the beginning of the reduction of massive subsidies. It all began at the gas pumps. No one knows where it will end.Gas Prices Soar in Iran as Subsidy Is Reduced
Gasoline prices nearly quadrupled on Sunday and the riot police guarded filling stations around the capital as deep cuts in subsidies on fuel and other essential goods took effect…
President Mahmoud Ahmadinejad announced the long-anticipated subsidy reductions in a live television interview on Saturday night, calling the reform “a great victory for Iran.”
Policy makers have described the program as a “rationalization” or “targetization” of Iran’s vast and inefficient subsidies system, but some analysts fear it could increase living costs for millions of middle- and low-income households…
Mr. Ahmadinejad said… that the prices of water, electricity and natural gas would increase “gradually,” and that the subsidy for bread would also be gradually eliminated. He predicted that the bottom 60 percent of income earners would be better off under the new plan while the wealthier 40 percent would “need to economize.”…
Iranian governments have sought for years to rein in the expensive and unwieldy subsidy system but have feared a strong public backlash. Price supports amount to $4,000 per family per year, a recent International Monetary Fund report found…
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Labels: economics, Iran, politics
posted by Ken Wedding @ 7:34 AM
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