Thursday, December 23, 2010
'Dark future awaits economy'
Iranian economy in trouble? Tehran's recent subsidy cuts in face of UN sanctions putting extra burden on struggling Iranian economy, top opposition leaders say; Iran battles recession, unemployment over 30%
Iran's opposition leaders said Wednesday that a "dark future" awaits the economy because the government didn't listen to economists when it slashed energy and food subsidies in a country already struggling under biting UN sanctions.
Former presidential candidates Mir Hossein Mousavi and Mahdi Karroubi support the government's effort to rein in subsidies but said in a rare statement posted on their websites that it is being implemented badly. The opposition leaders, who believe President Mahmoud Ahmadinejad stole the June 2009 election through massive vote fraud, said the way the government is slashing subsidies only brings more hardship to the country.
Fuel prices have at least quadrupled and bread prices have more than doubled in the past week since the government started dramatically reducing subsidies.
"Enforcing this plan, while Iran is facing tough international sanctions and its economy is in recession with an unemployment rate of over 30% and wild inflation, is a burden on medium and low-income families," Mousavi and Karroubi said in a statement posted on kaleme.com.
"Daily closure of factories and their inability to pay salaries on the one hand and exit of capital because of lack of investment security ... on the other herald a dark future for the country's economy. This gets worse when the government has no ears for the views of experts," they added.
President Mahmoud Ahmadinejad has called the subsidy cut plan the "biggest surgery" in Iran's economy in half a century and vowed to fully cut all subsidies by the end of his term in 2013.
The government says it is paying some $100 billion in subsidies annually, although experts believe the amount is about $30 billion. Economists say the plan to slash subsidies could stoke inflation already estimated to be more than 20%.