Ahmadinejad rejects economic criticism

Iranian president dismisses letter signed by 60 economists blaming him for skyrocketing inflation.

By JERUSALEM POST STAFF
Ahmadinejad cuckoo 224.88 (photo credit: AP)
Ahmadinejad cuckoo 224.88
(photo credit: AP)
Iranian President Mahmoud Ahmadinejad defended his unpopular economic policies on Sunday, rejecting a letter signed by 60 Iranian economists that blamed the hard-line leader for skyrocketing inflation, state-run media reported Sunday. Several newspapers published the letter in Sunday's editions from the independent economists that said Ahmadinejad's "tension-making interaction with the outside world" has deprived the country of foreign investments and his policies have caused Iran's inflation rate to reach 30 percent. In response, Ahmadinejad criticized those in Iran who he said are trying to push for American economic polices in the Islamic republic. He was not more specific. "Some have tried to propose an economic plan, which is used in the US, as a theory in Iran," the state-run news agency, IRNA, quoted Ahmadinejad as saying. He said Iran needs a local plan for developing its economy. Ahmadinejad, whose popularity has declined amid increasing economic difficulties in Iran, also defended his proposal to replace subsidies in Iran with cash payments that individuals can use to purchase goods. "Now is the best historic opportunity for applying" the plan, which is known as the Plan for Economic Reform, state TV quoted the president as saying. In the letter, the economists, most of whom work at universities, urged the proposal to be rejected, saying it would lead to even higher inflation. The plan, which has yet to be ratified by Iran's parliament, calls for cutting subsidies. In exchange, Iranians would receive on average $50 in cash per month to help buy goods. The populist president was elected in 2005 after promising to bring oil revenues to every family, eradicate poverty and tackle unemployment. But his popularity has been decreasing as inflation and unemployment increase. Ahmadinejad has defended his efforts to inject liquidity into the economy, saying it would create jobs. But official statistics say Iran's unemployment rate has reached 10 percent. About 80 percent of Iran's foreign revenue comes from oil exports, but oil prices have fallen due to a worsening global economy. Iran could also face a budget deficit next year if oil sells at below $60 a barrel. The International Monetary Fund is estimating Iran would need prices at $90 per barrel to stay in the black. The letter published Sunday was the third from economists to Ahmadinejad. The president never formally answered the other two, which were published in 2006 and 2007.