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Iran: Ahmadinejad, Larijani trade letters over subsidy reform plan

Source: Mehr News Agency, Tehran

Iranian Majlis Speaker Ali Larijani has replied to President Mahmoud Ahmadinejad's letter about the revision of the subsidy reform plan, which was passed by the parliament just before the Iranian New Year (started March 21).

from left: Ali Larijani, Mahmoud Ahmadinehad and Supreme Leader Ali Khamenei

Although the Majlis believes that the approved plan will minimize inflationary effects, it is ready to reconsider the expert views of the administration's officials, Larijani wrote in the letter.

But to clarify the issue, the administration should first announce its forecasts for the inflation rate, economic growth, and the price of fuels if the administration's proposed plan is completely approved, he added.

The Majlis is opposed to a plan that will cause a jump in prices and will put people under pressure, he said, adding that the abrupt elimination of subsidies will also increase worries about inflation, which in turn will intensify the inflation rate, which is a fact that the administration has overlooked.

The implementation of the subsidy reform plan is a sensitive issue and if it is carried out carelessly and hastily, it will only add to the problems the people are facing and lead to rampant inflation and uncontrolled importation, he stated.

That is why the Majlis has decided that the plan should be implemented over a longer period of time and in five stages, he explained.

The Majlis has made the utmost efforts to cooperate with the administration and has given the administration a freer hand than what is normal to decide how to spend the savings from the elimination of subsidies, the parliament speaker opined.

Elsewhere in the letter, Larijani criticized Ahmadinejad's proposal to hold a referendum to determine the people's opinion on the issue.

It is not becoming behavior in the Islamic system for the executive branch of the government to say it will not implement the law after it has been ratified by the parliament, he added.

In a letter to Larijani earlier this week, Ahmadinejad said that the administration is determined to implement the plan and has accepted this heavy responsibility, but the plan ratified by the Majlis has fundamental problems, making it difficult to implement.

The administration says it will not be able to compensate low-income families for the inflationary effects of the implementation of the plan unless the parliament doubles the administration's revenues from the subsidy elimination savings from $20 billion to $40 billion.

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