TEHRAN: Eight months after taking office, Iranian President Hassan Rowhani has suffered his first major political defeat, with the public overwhelmingly brushing aside appeals to forgo direct government aid.
The 455,000-rial ($14,) monthly handout scheme, initiated in December 2010 by Rowhani’s predecessor Mahmoud Ahmadinejad, is part of broader economic reforms aimed at overhauling the country’s massive subsidy system.
The reform — which phases out parts of remaining subsidies on energy, utility bills and basic food costs — is forecast in this year’s budget to save the cash-starved government $18 billion.
Encouraged by economists as a way of regulating Iran’s economy, which is stretched thin with debilitating sanctions and mismanagement, the plan’s second phase is expected to begin this week.
But the Rowhani administration for weeks ran an aggressive media campaign seeking to persuade the most affluent of Iran’s 77-million population, and some of the middle class, to waive the cash payments.
Enlisting celebrities, sportsmen, politicians and even religious figures, it argued that the money should instead be spent on infrastructure, manufacturing, public transport and health care.
But on Wednesday it was announced that 73 million people — 95 percent — had asked to receive the money, amounting to a near $1bn monthly bill.
The low rate of dropouts was mocked in conservative circles, and even moderates and reformists expressed criticism.
Reuters
