Po­lice in Iran streets as sub­si­dies are cut

The Pak Banker - - 6international -

TEHRAN: The Ira­nian govern­ment sent squads of riot po­lice to man the ma­jor in­ter­sec­tions of the cap­i­tal as sen­si­tive cuts in en­ergy and food sub­si­dies came into ef­fect Sun­day.

Eye wit­nesses re­ported a heavy po­lice pres­ence in the squares and junc­tions of Tehran such as Enghe­lab square and Sadeghieh and Valiasr squares as well as some western neigh­bor­hoods of the city, though so far the city has been quiet.

In 2007, an­gry pro­test­ers set dozens of gas sta­tions on fire af­ter the govern­ment im­posed a new sys­tem of gaso­line ra­tioning to cut down on ac­cess to heav­ily sub­si­dized fuel.

Ira­nian Pres­i­dent Mah­moud Ah­madine­jad said late Satur­day that the cuts in es­sen­tial sub­si­dies were the "biggest surgery" to the nation's econ­omy in half a cen­tury.

Af­ter the pres­i­dent an­nounced the cuts late Satur­day, long lines of cars were seen at sev­eral gas sta­tions in Tehran as Ira­ni­ans rushed to fill their tanks at sub­si­dized prices be­fore the new ones took ef­fect at mid­night.

The cuts come as the Ira­nian econ­omy is suf­fer­ing un­der four rounds of U.N. sanc­tions as well as those from in­di­vid­ual coun­tries over its con­tro­ver­sial nu­clear pro­gram.

Still, Iran had planned to slash sub­si­dies be­fore the lat­est sanc­tions took ef­fect, and Ah­madine­jad and his al­lies have long in­sisted the coun­try's oil-based econ­omy could no longer af­ford the largesse.

Tehran says it is pay­ing some $100 bil­lion in sub­si­dies an­nu­ally, al­though ex­perts be­lieve the amount is about $30 bil­lion.

Un­der the new ra­tioning sys­tem, each per­son with a fuel card has to pay 40 cents per liter of gas, up from 10 cents per liter. Fuel be­yond a per­son's quota is now sold at 70 cents per liter, up from 40 cents.

Ah­madine­jad also said his govern­ment was pay­ing $4 bil­lion in bread sub­si­dies. That, too, is now be­ing grad­u­ally phased out.

Econ­o­mists say the un­pop­u­lar plan to slash sub­si­dies could stoke in­fla­tion al­ready es­ti­mated to be over 20 per­cent. The cuts also are widely seen as plac­ing added bur­dens on Ira­ni­ans.

The govern­ment says cut­ting sub­si­dies, known as the Sub­sidy Smart Plan, will re­turn part of the money ob­tained from in­creased prices to the peo­ple through cash pay­ments. -Afp

DHAKA: A Bangladeshi woman makes hand­loom rugs in a fac­tory in Hat­i­bandha. Ev­ery year, Bangladesh's gar­ment sec­tor pro­duces bil­lions of dol­lars worth of high-street clothes for ma­jor western brands and gen­er­ates moun­tains of fab­ric of­f­cuts in the process. -Afp

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