TEHRAN: Eight months after taking office, Iranian President Hassan Rouhani 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 Rouhani’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 Rouhani 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. (Agencies)
