Iranian govt ‘can’t afford Ahmadinejad cash handouts’

Mahmoud Ahmadinejad.
Mahmoud Ahmadinejad.

Mahmoud Ahmadinejad.

Iran can no longer sustain the billions of dollars needed to pay cash handouts enacted by former President Mahmoud Ahmadinejad, a top official said Tuesday, signaling plans to halt them.

Since coming to power in 2013, Hassan Rouhani, Ahmadinejad’s successor, has sought to put Iran’s economy back in order after it plunged into recession and was hit hard by inflation.

Tackling the handouts — a partial replacement after subsidies on staples such as electricity, gas, water and bread were cut — has proved politically difficult. But Ali Rabii, Rouhani’s minister of labor and social welfare, wrote in an open letter that change was needed as the bill for the individual monthly payments of 455,000 rials (about $15) was too high.

“We should face reality. Reforming the current allowance payment system is a major step toward increased social justice,” he said, noting all Iranians receive the money whether rich or poor.

Accused of economic mismanagement, Ahmadinejad, in office from 2005 to 2013, used funds gained from a then high oil price to finance populist policies. He spent Iran’s petrodollars on the controversial scheme at a time when sanctions imposed as punishment for the Islamic republic’s disputed nuclear program deepened its economic difficulties.


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