While until quite recently the supreme leader of the Islamic republic, Mahmoud Ahmadinejad and his supporters boasted the Subsidy Reform Plan as an accomplishment of the regime, some Majlis representatives now not only publicly the uncontrollable inflation but even proclaim that a government decision to talk the implementation of the second phase of the plan to be wise adding that implementing the plan will impoverish people.
At the twelfth meeting of the Assembly of Experts on Leadership, its leader Mahdavi Kani called on Ahmadinejad’s administration to focus on the living conditions of the country’s masses. “At a time when the enemies of the regime, including Western and European countries and political and economic activists, put us under pressure, the government must quickly take control of the living conditions of people. This revolution did not come about just so that our people will be more religious, but this world and the next have been its goals as well,” he said. He continued, “The government must utilize the elite and the devotees. Political and economic activists outside the government must provide assistance so that this ship arrives at its destination. We will not get anywhere if we negate each other. Economic activists must think less about their personal profits at these times; this is mentioned in Islam as well.”
Addressing the same issue, Abdol-Reza Azizi, the head of the social committee of the Majlis also said, “If the second phase of the targeted subsidy program is implemented as the government plans, people will become destitute. The wisest action for the government is to not implement the second phase of the plan.” He said inflation has already broken people’s back and caused discontent.
In a related development, Ahmad Bakhshayesh, a member of the national security committee of the Majlis pointed the finger of blame on the government and said, “The source of inflation is the government’s weak supervision and performance in implementing the targeted subsidy plan.” He mentioned “lack of foresight and lack of proper economic management” as the key reasons for inflation and claimed that “economic managers have no specific plan in fighting inflation.” “People believe that if the second phase of the targeted subsidies is implemented, prices will shoot up astronomically.”
The implementation of the second phase of the Majlis approved Targeted Subsidy Plan has in the past been the source of deep differences between the various agencies of the Islamic regime. The Majlis and the Central Bank for example have been against the implementation of the plan arguing that if implemented, it would bring about very sharp price increases across the country.
The Subsidy Reform Plan was passed by the Majlis in January 2010. Most of the principlist in the legislature voted for the plan on orders from none other than ayatollah Khamenei himself and interference from the security-military establishment, despite objections from specialists and critics. One year into the implementation of the initial phase of the subsidy reform plan Gholam-Reza Mesbahi Moghadam, the head of the special Economic Reform Plan committee in the previous Majlis, said last winter, “The supreme leader personally told me to do anything so the president would be pressured to implement the plan and so he becomes sympathetic to it. The president did accept it through measures in the Majlis.”
In a letter to the supreme leader, the head of the eight Majlis Ali Larijani asked that the implementation of the second phase of the subsidy reform plan be suspended. Speaking on the floor of the parliament he proclaimed that he could “not approve of plans that had not been supported by specialists and which would bring a new wave of inflation, similar to what had happened months earlier and which had reduced people’s possessions.” Criticizing the manner in which the first phase of the Subsidy Reform Plan was implemented by Ahmadinejad’s administration, he said, “When the Majlis insisted that 30 percent of the revenues of the country be spent to help production it was not a tactical decision but the conclusion of deep studies by experts who had concluded that these were necessary to avoid the current conditions facing farm, agricultural and industrial producers.” The Majlis’ research unit also had predicted that the implementation of the plan could produce inflation higher than 60 percent of current prices.
Others in the Majlis too had objected to the plan. Alef website belonging to hardline politician Ahmad Tavakoli had written that in addition to Larijani, the State Inspectorate Organization also had written a letter to the supreme leader on the Subsidy Reform Plan. “We have prepared various experts reports, particularly on the targeted subsidies and one of the recipients of these was the office of the supreme leader,” it wrote.
But as these objections were being raised, the head of the office responsible for implementing the subsidies plan Mohammad-Reza Farzin had said, “While the law requires that the second phase of the targeted subsidies be implemented in the current year, it does not exactly say when. This office is studying the best timing for this.” But the remarks of the minister of economy, Shamseddin Hosseini, seem to have ended the debate over the issue when he said, “The implementation of the Targeted Subsidy Law as a way to reform or increase prices has been removed from the agenda. More preparatory work will be done but the second phase of the targeted subsidy plan with the interpretation of increasing prices has been removed from the agenda.”
The targeted subsidy plan calls for the removal of many subsidies of food and fuel in the Iranian economy which had been in place since the days of the 1980s war with Iraq and replacement with targeted social assistance to the lower economic groups of the country.
But despite the end of the public debate of the plan, discussions over inflation continue among officials. Government authorities have on numerous occasions publicly criticized the high inflation rate in the country. Members of Ahmadinejad’s administration point the finger of blame on economic sanctions while some other state officials believe mismanagement to be the cause root of higher prices. Some Majlis representatives have even said that the president’s allies – specifically a group normally referred to as the deviant group – are responsible for the inflation.
In more recent months, even many Friday prayer leaders who are designated by an appointed group close to the supreme leader have also pointed the finger of blame on Ahmadinejad and his administration. Beyond that, even some senior clerics, grand ayatollahs, have also criticized the government. Such criticism was grown so much that Mohammad-Reza Mirtajeddini, the government’s point man on clerical affairs, recently announced that a “team of economic specialists from the cabinet would be visiting the homes of the senior clerics to explain the economic conditions of the country.”
Tabnak site, close to former Revolutionary Guards commander and current secretary of the State Expediency Council Mohsen Rezai, also criticized the government and the Majlis for the current growing inflation and wrote, “Holding meetings and talking are not the solution to inflation.” It specifically said that the creation of a special committee by the Majlis and the administration to control the rapid rise in prices was useless which would give the people “nothing but talk” without addressing the roots of the problem.
The recent price hikes around the country have forced some normally available staples such as dairy products to be eliminated from people’s shopping lists. Farda website close to general Talai has reported that cheese, yogurt, butter and milk have been eliminated from items that families normally purchase and depend on because of inaccessible prices. The head of the country dairy product producers (Etehadie Taavonihaye Tolid-Konandegane Faravardehaye Labani Pastorize) Mohammad-Reza Ismaili told Fars news agency that prices of milk had risen by 300 percent this year from 380 Toman last year to 1,250 Toman this year.
Hossein Mohammadi
Source: Roozonline