Amadinejad's subsidy cuts divides Iranian parliament

Ali Larijani, Iran's Speaker of Parliament

While the Speaker of Iran’s Parliament and the three expert economist MPs have emphasized that the government must abide by the approved law on subsidy cuts, a group of pro-Ahmadinejad MPs have announced that they have prepared a reform bill.

While the parliament approved Ahmadinejad’s bill on subsidy cuts after months of delay, it only allowed the government half the $40 billion savings that it proposed to draw upon through the cuts.

The parliament’s Economic Commission maintained that the proposed amount would cause a sudden rise in inflation and suggested a more gradual implementation of subsidy cuts.

Once the bill was approved by the Guardian Council thus becoming law, Ahmadinejad slammed the decision and declared that he refuses to put it into effect unless it is put to a public referendum.

Analysts say Ahmadinejad hopes the subsidy cut will make Iran less vulnerable to possible UN sanctions on its gasoline imports and it would allow him to channel some of the cash saved directly to constituents who support him.

Ayatollah Khamenei, the last arbiter in major policy issues declared: “The reform bill is important. Government and Parliament should cooperate on it.” While he emphasized that the government is bound by the laws passed in the parliament, he also urged the parliament to cooperate with the government in the execution of the law.

Today Ali Larijani, Speaker of the Parliament announced that in the matter of the subsidy cuts, the words of the Supreme Leader “have finalized all discussions in the country.”

On the first day of the Parliament’s meeting in the Iranian New Year, Larijani emphasized the importance of respecting the law and added that mindful of the Supreme Leader’s admonitions to assist the executive branch in implementing the laws, the parliament will “collaborate closely with the government giving close attention to its views and reasoning.”

Despite Ali Larijani’s finalizing comments, a group of MPs announced that in order to resolve the differences between the government and the parliament, they have prepared a new proposal that would allow government savings of about $35 billion instead of the already approved $20 billion.

Ruhollah Hossenian, a pro-Ahmadinejad MP announced that the proposed bill has already been signed by one hundred Members of the Parliament.

Head of Parliamentary Research Commission, Ahmad Tavakoli told Fars News Agency: “MPs are not allowed to propose a reform bill on subsidy cuts,” because it has been approved by the Guardian Council and been amended to the budget.

He also said once more that he is willing to debate the policy with Mahmoud Ahmadinejad in public.

Mehr reports that another member of the Economic Commission of the Parliament, Gholamreza Mesbahi Moghaddam has announced that if a $40 billion government saving from subsidy cuts is approved by the parliament, he will resign his post.

The third member of the Commission, Elias Naderan dismissed the reform bill saying that expert economic matters cannot be changed through political pressure. He added: “The government must respect the law, because the Parliament has collaborated well with it.”