By Nader Uskowi
Ending state subsidies for gasoline, water and power and letting market forces determine their prices are the hallmarks of an economic reform act recently pushed through Majlis by President Ahmadinejad. The act is a sharp turn to the right for a president that ran for the office in 2005 on a populist economic platform heavy on state subsidies.
During his first term, Ahmadinejad’s economic team included Parviz Davoodi, appointed as first vice president, and Mohammad Jahromi, the minister of labor, both known for their leftist/populist tendencies. Midway through his first term, Danesh Jafari was dumped as the minister of economy and was replaced by Hossein Samsami, another member of the Davoodi team. The governor of central bank, Tahmasb Mazaheri, known for his moderate tendencies, was also pushed out. The left had taken over all economic portfolios. The buzzwords were bringing oil revenues to people’s dinner tables, distribution of wealth, fighting corruption, marriage loans, housing care and shares for social justice, all promoted by Ahmadinejad during his provincial tours to the four corners of the country.
But then came the global economic slowdown, the falling oil prices and an out-of-control inflation rate. In his second term, Ahmadinejad dumped Davoodi and chose Shamsodin Hosseini as minister of economy, and Mohammad Reza Farzin as his deputy at the ministry, both known for their moderate tendencies. Esfandiar Rahim Mashaie, also known as a moderate, was named the first vice president, but had to vacate that post under pressure from Majlis only to be named Ahmadinejad’s senior advisor and director of the presidential office.
Ending the state subsidies for gasoline, water and power is the first major act of the new team and indicates a sharp turn to the right by a president who came to power and prominence on a populist platform.
Note: this blogger has used the facts appearing in Reza Niknejad’s article in Iran Emrooz (17 January 2010), but takes responsibility for analysis and conclusion offered here.