Iran: Goodbye to Energy Subsidies, Hello to Price Controls?
Tehran, December 19, 2010. On what he called “the historic economic night,” President Ahmadinejad appeared on Iranian television to announce the imminent launch of the subsidy reform law, starting with energy prices at midnight (see below for new prices). He produced an impressive array of facts and figures from memory, hoping to calm fears about […]
Is Inflation Anti-Poor in Iran?
Iran’s Central Bank announced that the annual inflation rate has dropped below 10%, so it may seem like an odd time to talk about how rising inflation might affect Iran’s poor. But if the government implements the subsidy reform law, as it has promised to do in the second half of this year (Iranian year […]
Greater Equity through Redistribution: What Can the Targeting of Subsidies Do in Iran?
The Fifth Five-Year Plan of the Islamic Republic of Iran (1389-93, 2010-14), still under review by the parliament, has a clear goal for reducing inequality in five years — a Gini index of 0.35 for income. This is a substantial reduction from the high level of inequality that has plagued Iran in recent years. The […]
Estimating the Value of Iran’s Subsidies
Estimates of Iran’s subsidies vary widely. The figure that I see most often quoted is $100 billion per year, which is a huge sum considering the fact that Iran’s GDP is less than $400 billion. I have used a figure of $50 billion in a previous post, which maybe an underestimate. My back-of-the-envelope calculations below […]
Will Iran’s Poor Lose from Subsidy Reform?
Barely three months have passed since the controversial bill that authorizes the government to target its massive subsidy program became law, and it is already stalling. The government has asked the parliament to lift the $20 billion ceiling on spending from the revenues that it hopes to raise from selling energy at higher prices and […]
Iran: A Good Time for Goodbye to Subsidies
See the Oil Wars blog for a similar perspective on the contradictions of populist political economy (especially the difficulty of making a sensible trade-off between consumption and investment) in Venezuela. How do you respond to the kind of perspective represented by Djavad Salehi-Isfahani (regarding Iran) and Oil Wars (regarding Venezuela)? Thoughts on this question will […]
Iran: Reform of Energy Subsidies
At long last and after decades of talking about doing something about the subsidies, there is a bill before Iran’s majlis to target (but not remove) subsidies. I could not locate the bill itself but my impression is that it only addresses energy subsidies and not other subsidies such as food and medicine. So far […]
Iran Sanctions: Who Really Wins?
U.S. and Iranian representatives meet this week at a time when trust between the two countries is at a low ebb following the revelation last week of a previously undisclosed Iranian nuclear facility under construction and the test firing of Iran’s long-range missiles on September 28. Meanwhile, the Obama administration’s policy of engagement with Iran […]
After the Iranian Uprising
Even before the crisis over the election outcome broke, the prognosis for Iran in the coming year was not good. Back in October oil prices had started to fall and the contractionary measures taken by the Central Bank several months earlier to rein in inflation had slowed the economy. Last year, Iran’s imports had soared […]
Iran: Poverty and Inequality since the Revolution
Thirty years ago, Ayatollah Khomeini proclaimed equity and social justice as the Revolution’s main objective. His successor, Ayatollah Khamene’i, continues to refer to social justice as the Revolution’s defining theme. Similarly, Presidents Khatami and Ahmadinejad, though they are from very different political persuasions, placed heavy emphasis on social justice in their political rhetoric. Yet the […]