Tuesday, March 30, 2010

The economic policy of Ahmadinejad!

It is reported from Iran that on the question of subsidies, Ahmadinejad is keen to impose his will on Majlis. If it can not done in the way that he has suggested, it is said that his government will present a mini-budget- over and above the main budget which had just been turned into law to be implemented. The removal of subsidies has two sides: First, subsidies are removed and hence prices will have to rise. Second, some sections of the population would receive a cash subsidy to reduce the impact of government induced inflation. It seems to me that Ahmadinejad is paying lip service to the first part and focuses on the second part. To put it differently, in a strange sort of way, claims that if Majlis allows him to have 40000 Billion tomans income, his government will be able to pay more cash subsidies than a situation in which the income will be only 20000 billion tomans. The main thrust of Ahmadinejad's policy could be summarised as saying that 4 is greater than 2. If his government is allowed to raise 40000 billion tomans by removing subsidies, "the IMF demonstrations" will get out of control. Time would tell.

Sunday, March 07, 2010

Job creation - Iranian style!

Agianst all protests by local politicians, Ali Reza Zakeri who was an advisor to Mr Ahmadinejad during his first term of office, has been appointed as the Governor General of the Province of Isfahan following the rigged elections in June 2009. Since his appointment, he appointed his brother as the chief of security forces in the province, his wife, appointed as an advisor to the Governor General on health issues, One of his brother-in-laws has become another advisor and a second brother-in-law was given the job of research advisor. A further relative was given a similar position. It is claimed that the new Governor General has created more than twenty advisory positions and appointed individuals with no relevant expertise and qualification to these positions.