Amid Rising Concerns Over the Country’s Economy
Iran's parliament, Majlis, today abandoned its planned impeachment of
a member of Ahmadinejad’s Cabinet amid rising concerns over the economic
situation in the country. Majlis Speaker Ali Larijani stopped the debate on
impeaching the Sports and Youth Minister Mohammad Abbasi, saying “because of
the economic situation,” lawmakers thought that fixing the economy had priority
over politics.
“Parliament
made a right decision. Regarding the current economic situation, the parliament
prefers dealing with economy,” larijani said.
“The economy is not in a good situation,” said MP Kamal Alipour, one
of the members of Majlis who had signed the impeachment request. “The currency
is not in a proper condition,” he added.
“The currency is the main problem,” said another MP, Mohammad Qasim
Osmani.
Meanwhile, Tehran chief prosecutor Abbas Jafari Dowlatabadi said that
since Wednesday, 30 people have been detained for “disrupting the currency.” On
Wednesday, protests over the plummeting rial flared in Tehran after the currency
hit a historic low of 35,500 rials to the dollar. The rate was at 20,000 in
January of this year, and 10,500 in January 2011.
The arrests announced by the prosecutor’s office are part of an effort
by the government to control the currency crisis through the security
apparatus. Many Iran observers do not believe that the economic and psychological
underpinnings of the rapid drop in the value of the rial could be resolved in
the long run by police crackdown and other security measures.
10 comments:
With enough arrests of people holding dollars in Iran, the exchange rates will go back to levels based simply on imports/exports (and not people wanting to hold their Iranian savings in dollars).
The government’s claim that 30 moneychangers working on the street could “disturb” the national currency and cause the largest and fastest drop in rial’s value in history does not convey much confidence in the rial or in the economy! Arresting 30 moneychangers cannot change the fundamental issues facing the currency. The loss of more than 30 percent in currency value in less than a week has caused a shock in the economy and the government needs to take as bold an action as a shock therapy to bring back the coinfidence to the market. I assume their decision today to suspend Ahmadinejad’s subsidy reform program might not be enough; they might need to dump Ahmadinejad himself to get the desired effect.
This shows you why Mousavi's attempt to steal an election was so despicable. Had he simply accepted the popular vote, without trying to riot his way into power, he would be sitting pretty right now. Iranians often shoot themselves in the foot with over-ambition.
Even if they dump Ahmadinejad it will not make a difference.
The root cause of the social economic problems in Iran is the regime.
The Iranian people will have to dump the regime for it to have the desired effect.
Anon 10:44 AM
I'm afraid you're wrong,because the Iranian people have lost confidence in the national currency. Therefor even if the dollar will be sold for 30000 rial it will go up again due to supply and demand.
People will simply hoover up the dollars and depleting the Iranian reserves.
"People will simply hoover up the dollars"
. . .
As I wrote, "With enough arrests of people holding dollars in Iran"
No one will hold foreign currency if the cost is prison.
Anon 5;42 PM
You can beat some of the people some of the time but you can't beat all of the people all of the time.
You people who support the theocracy think every answer is clubbing someone on the head and imprisonment.You can't imprison 70 million people.
The government should be the servant of the people,not the other way round.
There's no need to beat all of the people. The people buying dollars are a small percentage of the population, albeit rich.
Every country has a right to establish its currency, and to regulate its citizens economic activities. See the U.S. for the most extreme example of economic regulation.
Anon 10:10 PM
"The people buying dollars are a small percentage of the population,albeit rich."
Khamenei and his cronies with Rafsanjani are the small percentage of the population who are the rich.
Anybody who has any sense would go and buy dollars,when they know the rial is a worthless currency.It has nothing to do with being rich.
And so the blame game begins.
Something is got to give, and it looks like the lame duck president is the first to go.
The second phase of subsides elimination is now on hold which means that the next couple of quarters the budget will have to be adjusted (I assume they will start doing the budget in dollars this time around).
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