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| Iran pushing ahead with economic reform: MEED |
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 The latest edition of the Middle East Economic Digest magazine in an article praises Iran’s economic performance in privatizing companies, reducing the number of ministries, phasing out subsidies, fighting inflation and moving toward a free market.Following is the text of the article: “Although Iran suffers from a wide range of economic and social problems, including a lack of jobs, brain drain, inflation and trade sanctions, in the past year, the government has shown a new determination to tackle these issues. It was always expected that the removal of subsidies would lead to higher inflation in the short-term and the potential for unrest, as the price of gasoline quadrupled overnight. But more positively, the removal of the subsidies has already reduced the consumption of electricity and gasoline. Of the money saved, the government said 50 percent would be spent on Iran's lower classes and there is anecdotal evidence that this wealth now is reaching small towns and reviving economic activity. A further 20 percent is due to go into key infrastructure projects. One of the major projects expected to benefit is the expansion of the Tehran metro. The development of the country's transport infrastructure has been slow, held back by a lack of financing. However, in May, the Iranian majlis, or parliament, approved a bill to allocate a minimum of $2b from the National Development Fund for investment in subways and other urban transport projects. The Washington-based IMF is forecasting Iran's economy will remain flat in 2011, due to the combination of sanctions and the phasing out of subsidies. Inflation is predicted to accelerate, rising to 22.5 percent.” Other reforms are also progressing, including an effort to improve ministerial efficiency, with plans to reduce the number of ministries to 17 from 21. Ahmadinejad has also announced ambitious plans to tackle unemployment, which currently stands at about 11.3 percent. The aim is to cut that figure by 2-3 percentage points by 2013, creating up to 2.4 million new jobs each year. Meanwhile, the government's privatization plans have also moved forward over the past year. The Iranian Privatization Organization (IPO) says it divested $80b-worth of government-owned assets in 155 companies between 2005 and 20 March 2011. The IPO is aiming to raise $l2.5b from the sale of further assets over the next four years. The largest contributing sector was the oil industry, including refineries and exploration assets, which generated $27.6b. A further $11.5b was raised from the sale of shares in the Telecommunications Company of Iran, $9.8b from the sale of shares in the petrochemicals sector, $4.8b from the country's power plants and $4.3b was raised from the sale of assets in the banking and insurance sector. If Iran can continue in its current direction, then the introduction of a free market economy will be achieved. MEED is a well-known business magazine for the Middle East and North Africa (MENA), providing analysis and commentary on Middle Eastern markets, companies, people and data on the regional projects market.   Socialize this Subscribe to our RSS feed to stay in touch and receive all of TT updates right in your feed reader
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