Iran: Subsidies Cutback Causes Drastic Rise in Prices

Bandar-Abbas strike

Sabzlink writes that workers began a strike in Bandar Abbas shipping port in the southern part of Iran.

Severe cutbacks on subsidies that have kept prices on many goods artificially low are feared to cause problems for many middle class and poor citizens in Iran.

According to MSNBC, “Fuel prices have at least quadrupled and bread prices have more than doubled in the past week since the government started dramatically reducing subsidies”.

Opposition leaders Mir Hossein Mousavi and Mehdi Karroubi said Wednesday that a “dark future” awaits the economy because the government doesn't listen to economists (one economist was arrested after speaking with foreign media).

Iranian bloggers have also reacted to what President Mahmoud Ahmadinejad has called “the biggest surgery” in Iran's economy in 50 years.

Several bloggers including one pro-Ahmadinejad blogger expressed their deep concern for the outcome of these cutbacks.

Azarmehr wrote :

On Saturday, Ahmadinejad finally announced the removal of subsidies which have been keeping the prices artificially low in Iran's economy. To ease the pain of this move, each Iranian will receive a cash pittance amount in their bank accounts. In his televised announcement, Ahmadinejad, true to his messianic nature, referred to this cash as the Hidden Imam‘s [Twelver Shi'a Muslims believe Mahdi is the hidden Imam] money. A zero interest loan endowed to the people of Iran by the Lord of All Ages, Imam Mehdi, who will return and rid the earth from corruption and injustice. How far this cash will go and whether this cash injection into the economy will cause inflation or hyperinflation is not what I want to talk about however.

Azarak says [fa]:

The 70 percent of Iranian families living under the poverty line will live a nightmare and could afford to buy new clothes and shoes for their children for the Iranian New Year [in three months]…people who criticize this economic plan will be arrested… Ahmadinejad will be dismissed but leave behind him a destroyed country.

Sabzeh Meidun vegetable market in Isfahan

Sabzeh Meidun vegetable market in Isfahan, Iran. Photo by Alieh Saadat © Demotix (4 Aug 2009)

FreedomVoice writes [fa] that the greatest burden is on the middle class and the poor and that the best way to resist would be a general strike.

Masaeb Ahmadinejad, is a pro-Ahmadinejad blogger but also criticized the economic plan. The blogger believes the subsidy cuts will stir trouble, and writes that during previous presidencies inflation provoked riots. The blogger says that most of Ahmadinejad's supporters come from the middle class, and that the economic situation will damage the image of the president.

Sabzlink writes [fa] that workers began a strike (photo above) in Bandar Abbas shipping port in the southern part of Iran. The strikers say the cost of gasoline is higher than what they will earn from clients.

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