Ahmadinejad addresses nation on economy

Iranian President Mahmoud Ahmadinejad responds to criticism leveled at his sweeping economic reform plan amid parliamentary deliberations.   "It is vital for the government to adopt a correct policy because the country is currently losing economic opportunities," the Iranian president said in a televised interview on Tuesday ahead of a possible parliamentary vote on his reform package.  On Sunday, Iranian Majlis (parliament) Speaker Ali Larijani warned the Ahmadinejad administration against pursuing plans that may lead to creeping inflation.   "If the government takes a wrong path and adopts plans that create inflation, it should not expect parliamentary support," Larijani said.   Prominent Iranian economic experts have also slammed the Ahmadinejad administration for not taking corrective measures to deal with the country's economic decline, saying the government's economic plans are costing the country dearly at a time of crisis.   In an open letter to the president, 60 leading economists from major Iranian universities criticized the president, saying his "misguided trade policy" and "tension-seeking foreign policy" work to "deprive the country of trade and foreign investment opportunities".
President Ahmadinejad responded Tuesday that his proposed economic reform plan aims to reduce dependence on petrodollars.  "The plan will ease the financial crisis which will provide us with opportunities," he said in reference to the recent decrease in the prices of certain commodities in the country.  The chief executive also cited the positive impact of a prior government decision to switch the national reserves from euros to dollars as an indication that the government is able to bring economic prosperity to the country.  "We gained great profit from the plan because it increased the value of the national reserves every week," he said, confirming that the value of Iran's national reserves has exceeded $23 billion.  The Iranian president also defended his proposal to replace subsidies in Iran with cash payments to individuals. "The plan will increase prices but the country's superior economic condition and management of projects will lessen the impact," he explained.  As part of his economic reform plan, President Ahmadinejad will also introduce a value added tax (VAT) program, under which Iranian businesses will need to pay 3% of their sales receipts to the government.  The introduction of the VAT program was met with October strikes in Iran's bazaar, the backbone of Iran's traditional financial system. Following the strikes, the Iranian president postponed the implementation of VAT for two months.  In addition to differences over economic policy, the recent parliamentary dismissal of government ministers has also heightened political tension in the country. Iran's executive and legislative bodies recently agreed to set up a committee to resolve current differences. The committee will see presidential deputies and advisors, cabinet ministers and prominent lawmakers debate on issues that can lead to closer relations between the Majlis and the Ahmadinejad administration. The current economic reform plan is being considered by the Majlis and will be put to vote in the near future. SF/CW/AA. Original source at PressTV

TEHRAN, Iran (AP) - Iranian President Mahmoud Ahmadinejad is acknowledging publicly for the first time that tumbling oil prices are gouging the country's fragile economy.  The official IRNA news agency is quoting the increasingly unpopular president as saying Iran will be forced to trim spending and generous subsidies and raise taxes. It's a sensitive admission for the Iranian president, who is seeking re-election in June.
Oil prices have plunged from $147 a barrel in July to under $50, adding to the pain of Iran's rising inflation and unemployment. Wednesday's report quoted Ahmadinejad as saying the government budget would have to be readjusted to base it on an oil price of around $30 a barrel.

Last month, Ahmadinejad defended his unpopular economic policies, rejecting a letter signed by 60 Iranian economists that blamed him for skyrocketing inflation, state-run media reported.  Several newspapers had published the letter 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 had criticized those in Iran who he said are trying to push for American economic polices in the Islamic republic. He was not specific.