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Iranian economists criticize Ahmadinejad

Press TV - Prominent Iranian econ experts say President Mahmoud Ahmadinejad's economic plans are costing the country dearly in a time of crisis.

In an open letter to the president, top Iranian economists criticized the Ahmadinejad administration for not taking corrective measures to deal with the country's economic decline.

The economists expressed grave concern over 'the government's determination, in these dark times, to implement an expansive reform program' and warned of the consequences of this measure.

The Iranian experts also slammed President Ahmadinejad's 'misguided trade policy' and 'tension-seeking foreign policy', and argued that such approaches 'deprive the country of trade and foreign investment opportunities.'

"As a result of the imposition of UN Security Council sanctions on Iran, much of the country's trade is done through middlemen, which costs the country's foreign trade billions of dollars," read the letter signed by 60 economists from major universities around the country.

The letter also described the conversion of petro-dollars into Rials to meet the government's budget expenditures as one of the worst measures taken by the Iranian government, ILNA reported.

Since taking office in 2005 president Ahmadinejad has been under fire over his policies.

Former governor of the Central Bank of Iran (CBI) Tahmasb Mazaheri reportedly quit his job due to differences of opinion with president Ahmadinejad over economic policies, such as interest rates and bank credits.

Iran's economy minister Davoud Danesh-Jafari also left the cabinet in April over differences in certain monetary and banking policies with the Iranian president.

Earlier in October Tehran's Bazaar, the backbone of Iran's traditional financial system, went on strike over President Ahmadinejad's new value added tax (VAT) program.

Following the strike, the Iranian president postponed the implementation of VAT for two months.

Critics of the plan demand the Iranian government to permanently suspend the new program, claiming that VAT would contribute to the country's rising inflation.

Proponents of the plan, however, maintain that VAT would help the country shift its dependency from oil revenues to indirect taxation.

Under the new VAT policy, Iranian businesses would have to pay 3% of their sales receipts to the government which hopes to lower inflation this way.

President Ahmadinejad has also vowed to cut the subsidy for energy and other basic commodities and redistribute the money as direct payouts to citizens.

The decision to implement the VAT plan is viewed as an effort by the Ahmadinejad administration to increase government revenues. Economists predict that within months the government will face a budget deficit considering that oil prices are on a sharp downward spiral.

... Payvand News - 11/10/08 ... --

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