Iran Economy NewsIran tightens security as subsidy cuts loom

Iran tightens security as subsidy cuts loom

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Wall Street Journal: Iranian authorities are taking extraordinary security measures ahead of cuts to energy and food subsidies this month, in an effort to prevent unrest by a public upset about rising expenses and inflation.

The Wall Street Journal

By FARNAZ FASSIHI

BEIRUT—Iranian authorities are taking extraordinary security measures ahead of cuts to energy and food subsidies this month, in an effort to prevent unrest by a public upset about rising expenses and inflation.

President Mahmoud Ahmadinejad cautioned the public on Wednesday against politicizing the economic reforms and threatened to severely punish businesses that raise prices of consumer goods in reaction to subsidy cuts.

In a nationally broadcast speech to a rally in the northeastern city of Bojnurd, he said government agents would “catch and fine anyone who abused the situation and make them regret it forever.”

The government, in a five-year phaseout plan, seeks to eliminate up to $100 billion a year in food and energy subsidies that keep costs down for consumers. About 65 million Iranians, out of a population of 75 million, will receive cash payments of about $40 a month to ease the economic pain of lost subsidies. Cash payments in some provinces have already begun.

The plan, taking effect as Iran feels the bite from tough new international sanctions against its nuclear program, appears to be stoking concern in the government that it will fuel another political uprising. Opposition protests shook the country after disputed elections in June 2009, leading to an intensified crackdown on dissent.

Last week, the Revolutionary Guards’ commander in chief for Tehran, Brig. Gen. Hussein Hamedani, said a task force was created to deal with potential demonstrations and to make sure the opposition doesn’t create “economic havoc.”

Opposition leaders Mir Hossein Mousavi and Mehdi Karroubi said Monday the government’s execution of the economic reforms is haphazard and will cause public upset.

Thousands of police officers have been dispatched to 2,000 locations in Tehran armed with riot gear, such as batons and tear gas, setting up temporary bases in major squares and traffic junctures, said Tehran’s police chief, Hassan Sajedi.

On Tuesday night, police rounded up 100 people under the age of 30 as part of what the police called a “security cleansing” project, according to official news agencies.

On Wednesday, Mr. Sajedi said up to 400 more people would be arrested and “paraded” in the coming days to set an example for anyone planning social unrest. He said some would be charged with “moharebeh” or “war against God,” a charge that carries the death penalty and is typically handed to political dissidents.

The cuts are due this month, but many details of the plan remain vague, such as an implementation schedule and goods to be affected. The government says it has withheld details to prevent public panic, but worried consumers in Tehran and other cities have been buying up dried goods such as rice, beans and oil in anticipation of rising prices. Beef prices have risen about 5% in the past week, residents say.

“If this plan is for the good of the people then why are so many police in the streets?” said a mother of three in Tehran.

The government ordered media organizations this week to refrain from analyzing the subsidy cuts or publishing critical comments about the plan, according to media reports.

Businessmen, industrialists, shopkeepers and high-level managers have been warned against speaking out against the cuts. They say they were told by security officials that they stand to lose their business permits and their jobs if they raise prices or incite public protests.

“More and more this economic reform plan is starting to look like a security operation,” said an analyst in Tehran.

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