Spotlight on Iran's Subsidy policy reform

Subsidy policy reform launched for the first time since the Islamic revolution

More than two years after President Ahmadinejad first announced his intention to implement a comprehensive reform in Iran’s subsidy policy and nearly one year after the reform was approved by the Majles, this week Iran’s government has started paying cash benefits into personal bank accounts under the program. The cash benefits are aimed to compensate the public for the price increases that will likely follow the subsidy cuts. During the first stage, residents of the three east Iranian provinces of Khorasan Razavi, North Khorasan, and South Khorasan received 81 thousand tomans (about 80 dollars) into their bank accounts. Iranians from the poorest sectors of society will receive higher sums (nearly 90 dollars). The deposition of cash benefits in personal accounts in all 31 provinces in Iran is expected to continue in the coming weeks. So far about 61 million Iranians have signed up for the cash benefits under the reform.

Behrouz Moradi, chairman of the Subsidy Policy Reform Organization, said this week that it has not yet been decided how often deposits will be made. He noted that individuals can withdraw the funds deposited in their accounts only after the price increase that is expected to take place in the coming weeks (ISNA, October 18). It is still not clear what products will become more expensive or by how much.

The reform organization has announced this week that interested citizens can register the bank account number they will be using for the cash deposits on the www.refahi.ir website. People who do not register by October 21 will be unable to receive the cash benefits during the current phase of the program (various news agencies, October 17).

In a speech given this week in Ardabil Province, the president said that the subsidy policy reform was aimed to promote social justice and allow all Iranians to manage their money the way they see fit. He stressed that the government intends to continue the implementation of the reform according to its plan regardless of criticism made by various elements against the program. He promised to give more details about the reform in a TV interview he intends to give in the coming days (various news agencies, October 17).

Recently several Majles members have once again asked the government to give the public a more detailed update on the reform to ensure the citizens’ cooperation in its implementation. Majles member Hossein Sobhani-Nia said that the government must provide the necessary clarifications about the reform to allay the public’s concerns over its consequences (Fars, October 17). Gholam-Reza Mesbahi Moqaddam, chairman of the Special Majles Committee for Economic Transformation, also called on the government to provide the public with further information to prevent psychologically-driven inflation. In an interview to ILNA news agency, the Majles member said that the government can put the public’s concerns to rest by explaining the positive consequences of the reform. He noted that the positive consequences outweigh the negative ones, and expressed support for its implementation (ILNA, October 17)

Poster at a bank entrance calling on customers to open accounts for receiving cash benefits

Meanwhile, conservative Majles member Morteza Agha-Tehrani issued a call to fight those who seek, as he put it, to take advantage of the reform to disrupt public order. He noted that while the reform may not necessarily benefit each and every citizen, its overall impact on the public will be positive and it should therefore be supported (Fars, October 17).

Sa’id Laylaz, a major economist affiliated with the reformist opposition, has also expressed support this week for the government-run subsidy policy reform. In an extensive interview given to the pro-government website Raja News, Laylaz said that even if the government is unable to fully implement the reform, it will still contribute to Iran’s economy. He praised Ahmadinejad’s government for being the first to mobilize broad-based political support for the implementation of the reform, first proposed in the early ‘90s. He stressed, however, that the government must spend the revenues from the subsidy cuts wisely to increase investments in the development of Iran’s economy and national infrastructure. Laylaz also expressed hope that the reform will be used to diminish the public’s excessive energy consumption (Raja News, October 17).

via terrorism-info.org.il

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