Economists Say Iran Subsidy Plan A Weapon Of Political Control
By Robert Tait,
A long-awaited radical overhaul of Iran's
economy that has seen the scrapping of state subsidies is being used to punish
and intimidate opponents of President Mahmud Ahmadinejad, analysts say.
Tehran residents shopping for "Yalda Night" on
Individuals and families deemed politically suspect or
disloyal to Ahmadinejad's government are reportedly being denied cash handouts
brought in to replace the extensive subsidy regime.
The claim, based on studies partly conducted by economists in Iran, comes after
Ahmadinejad announced the end of subsidies in a move that saw fuel prices soar
by 400 percent overnight.
Subsidies on a wide range of products are to be replaced by monthly cash
payments of $40 per head, ostensibly targeted to those deemed most in need. The
government has presented the plan as necessary to save the treasury up to $100
billion a year at a time when Iran's economy is under increasing strain from
international sanctions imposed in response to its nuclear program.
However, Mehrdad Emadi, an Iranian economist based in London, says the
compensation payments are being closely screened by the Islamic Revolutionary
Guard Corps (IRGC) and volunteer Basij militia.
"You can see a political screening of people and categorizing them into groups
-- who are with us and groups who have not made the right level of effort to be
with us," Emadi says.
Between 4 million and 5 million people who should qualify on
financial grounds have yet to receive their first handout, according to a study,
including many suspected of having participated in opposition Green Movement
protests against Ahmadinejad's disputed reelection in 2009.
Motorists line up at a gas
station in Tehran, as fuel prices soared.
According to Emadi, if a family has had a "negative report" filed about it by
the local Basij or IRGC office, where a family member "has been seen to be
involved in antigovernment activities," they are being denied payments. "What
we're talking about is not making bombs," Emadi says, "but participating in
street demonstrations or, in some cases, having slogans written on the walls of
their houses but they have not made the effort to clean the wall or cover it."
Emadi's comments are based on the findings of Beta-Matrix Research Consultancy,
a consortium of Europe-based analysts that has liaised with academic economists
in Tehran and two other Iranian cities, Isfahan and Qazvin, to study the
government's preparations for the reform plan. The study found widespread delays
in payments in areas such as Kurdistan and Sistan-Baluchistan, where there has
been separatist unrest, while those to religious cities have been processed
Far from liberalizing the economy and freeing up prices, the program is aimed at
extending state control and creating a climate of fear among ordinary citizens.
"We see a great deal of tilting the system of distribution of the
subsidy-compensation package towards a highly militarized mechanism where the
Basij and Revolutionary Guard offices are taking control of the financial
distribution of this compensatory packages in the neighborhoods," Emadi says.
"This is very disturbing to local citizens because they truly feel intimidated
when they have to go and provide extra documentation. Instead of going to a
financial or administrative place, they have to go to the local Revolutionary
Guard headquarters and it's not a nice place to visit when your documents are
The assessment is supported by Jamshid Assadi, an Iranian economist at the ESC
Groupe Business School in Dijon, France, who says Ahmadinejad's goal is to
create a system of "serfdom" that will turn citizens into "clients" totally
reliant on the government for their livelihoods.
"This policy of eliminating subsidies and transforming them into cash does not
have any objective in my opinion [other than] saying to the Iranian citizen:
'Wait a minute. If you need money, I have money to give to you. But I have not
seen you in the street supporting my government. I have not seen you in the
street attacking those people who object, who contest the election and my second
term. But if you want to have some money every month, even more, come and be
Basiji and then you will receive money,'" Assadi argues.
Opposition Will 'Regret' Resistance
The reform's introduction on December 19 was accompanied by massive deployment
of security forces in Tehran and other major cities, as the authorities sought
to prevent a recurrence of the riots that followed the imposition of gasoline
rationing in 2007.
Ahmadinejad and senior IRGC figures have warned against any protest this time,
saying that those who take part in "economic sedition" will "regret it forever."
The authorities have warned that those who take part in "economic sedition" will
"regret it forever."
Amid an atmosphere of intimidation, no major displays of
dissent have been reported.
Iranians face a grim future of falling living standards and increased
repression, Assadi believes. "Unfortunately, I'm seeing very bad, hard days for
Iran in the future because people are getting more and more dissatisfied
economically. This is not a question of ideology, of politics, of liking
democracy or not. This a question of 'I don't have money to feed my kids,'" he
"And because this state and government don't have any satisfactory responses to
that and they are badly afraid of the Green Movement and people on the street,
they are going to react very badly" to any protest, Assadi adds. "So people
[are] going to get poorer and become more repressed."
Copyright (c) 2010 RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036. www.rferl.org
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