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Iran: Foes Challenge President's Economic Rhetoric

By Vahid Sepehri

January 22, 2007 (RFE/RL) -- President Mahmud Ahmadinejad has repeated past claims that those responsible for price volatility in Iran are speculating based on privileged connections to previous governments. But the reaction this time to his remarks suggests his critics want government action, not finger-pointing.

Lawmakers in the conservative-dominated parliament assailed Ahmadinejad on January 21 over signs of runaway inflation. One lawmaker cited a threefold increase in the price of tomatoes, prompting the president to tell him to "come and do your shopping in my neighborhood" rather than patronize "expensive places."

Ahmadinejad, who was presenting his second annual budget plan to the parliament, countered that his government has successfully controlled inflation.

'Playing With Prices'

Ahmadinejad reportedly had told his ministers on January 9 that their government inherited inflation from its predecessors. He claimed that "certain elements" with ties with previous governments were using "illegitimate fortunes" to "create upheaval in the market and play with prices," the dailies "Etemad-i Melli" and "Aftab-i Yazd" reported on January 11. He accused those people of creating "a psychological atmosphere" that has led to price fluctuations.

Ahmadinejad has in the past criticized previous policies -- particularly the economic adjustments of the 1990s under the liberalizing governments of Presidents Ali Akbar Hashemi-Rafsanjani and Mohammad Khatami.

Allegations of corruption that enriches villains at the expense of the public purse is a recurring theme of conservative rhetoric. A past variant claimed the existence of an oil mafia that was helping itself to millions of petrodollars, in the absence of close supervision.

Critics On Both Sides

But the government might find the latest criticism -- which has come from conservatives as well as reformists -- tough to deflect.

On January 6, the conservative deputy speaker of parliament, Mohammad Reza Bahonar, warned that "the general level of prices seems to have gotten out of control," ISNA reported. He conceded that some of the responsibility might lie with previous governments. But he went on to blame more recent government spending, which he said parliament wishes to curb, and said low-cost government loans have forced up housing prices.

Another legislator, Ahmad Khas-Ahmadi, has challenged the government to hand corrupt cronies of previous governments over to prosecutors, according to ISNA on January 10. He blamed a "problem" system that leaves the economy vulnerable to speculation or market perceptions. But Khas-Ahmadi also questioned whether the economy had been managed in such a way as to encourage people to invest in production, rather than to hoard their assets.

Another legislator, Ismail Jabbarzadeh, demanded that Ahmadinejad "state clearly" any information he has of financial wrongdoing, Aftab news agency reported on January 10.

The head of a special economic department at the judiciary, Elias Mahmudi, weighed in the same day to say that his investigators "are waiting for the president to identify...those [people] with illegitimate fortunes, and God willing, he will," according to ISNA on January 10. Mahmudi vowed that public trials of the culprits would follow.

Rasul Sadiqi-Bonab, a member of the parliamentary Planning and Budget Committee, called the president's sweeping indictment an insult to all hard-working state officials, according to Aftab on January 12.

Another legislator, Tehrani Mehdi Kuchakzadeh, argued that "some of the problems" arise from "the methods and executive decisions...[of] today," adding that "the government, parliament, and judiciary...participate in" those decisions, ISNA reported. He then accused the judiciary of discreetly reassuring corrupt individuals that "nothing will happen" to them if they are caught. Kuchakzadeh said these factors combine to cause inflation.

Lawmaker Mohammad Reza Mirtajeddini did not excuse past governments, but he focused on the Ahmadinejad government's boasts that it is well equipped to resolve bread-and-butter issues. He said the country's "economy is sick," and he urged the president to take "essential measures" to make it better.

Plenty Of Blame

Lawmakers have argued for a range of measures to curb inflation -- in several cases urging a crackdown on speculators -- but their overriding message appears to have been that enforcement and policy-making are powerful tools in the government arsenal to combat abuses and price volatility.

Right-wing legislator Hasan Seidabadi noted that influential individuals from the previous administration -- with the accompanying connections -- can simply borrow from banks if they intend to speculate, "so the matter [has nothing] to do with judicial officials." He said the government should simply prevent such "agents" from abusing "banking resources and ailing-economy opportunities."

Mohammad Ali Abtahi, a former vice president under Ahmadinejad's reform-minded predecessor, President Khatami, utterly rejected the president's defense. Abtahi argued that "high prices that began a year and a half after" Ahmadinejad became president in 2005 "cannot be rooted in previous governments," according to Mehr on January 13. He challenged Ahmadinejad to tell voters what his administration has done to curb inflation.

Past Pledges

But Ahmadinejad's own rhetoric could provide opponents with their most powerful weapon over his handling of economic pressures.

Hadi Baluki, a member of the reformist National Trust Party, noted in mid-January that "Ahmadinejad claimed he would bring oil money onto people's tables" but said people are instead being deprived of bread, ILNA reported on January 14.

Cleric Hussein Musavi-Tabrizi alleged the same day that the government is simply paying too little attention to Iranians' material problems, according to ILNA.

A former deputy finance minister, Said Shirakvand, conceded that systemic problems contribute to inflation, according to ISNA on January 17. But he stressed that he thinks "day-to-day" economic management, stagnant production, and large pockets of cash are to blame for the current inflationary dilemma.

Copyright (c) 2007. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036.

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