Reuters: President Mahmoud Ahmadinejad, seeking re-election next month, said his government planned to issue bonds that would give ordinary people a share in Iran's oil income, media reported on Tuesday.
TEHRAN, May 19 (Reuters) – President Mahmoud Ahmadinejad, seeking re-election next month, said his government planned to issue bonds that would give ordinary people a share in Iran's oil income, media reported on Tuesday.
The conservative president, who won the 2005 election pledging to distribute Iran's oil wealth more fairly, made clear that only Iranian citizens would be able to buy such bonds but he did not give details on their price or yield.
He faces a challenge in the June 12 election from pro-reform politicians who have accused his government of squandering Iran's windfall revenue while crude prices were soaring until mid-2008.
Presidential hopeful Mehdi Karoubi, a reformist former parliament speaker, has also promised to distribute shares of Iran's oil and gas industry among Iranians if he is elected.
Analysts say Iran's oil sector needs more foreign capital to expand but that U.N. and U.S. sanctions on Tehran over its disputed nuclear programme have deterred particularly Western companies from investing in the country.
"Under this plan…the oil income will be distributed among all the people," he was quoted by state-run daily Iran as saying on the sidelines of an oil conference.
He said that under the plan "participation certificates", or Islamic bonds, are to be issued, allowing Iranians to invest in some projects in Iran's oil industry, the main source of budget and export revenue in the world's fifth-largest oil exporter.
"This plan eases our dependence on others in financing the oil industry and puts the income of this industry at the disposal of all Iranians," Ahmadinejad said.
Critics blame him for disappointing economic growth and high inflation, but his promises of a fairer redistribution of income still resonate with the poor.
Ahmadinejad's supporters say Iran has held up relatively well in the face of a global economic downturn.
A number of state bodies have issued Islamic bonds to finance projects since they were authorised in 1994.
Ahmadinejad said the planned bonds would also allow Iranians to receive part of profits from upstream projects, which include the key areas of exploration and production of crude oil.
"The people (will) participate in large upstream investment and can pocket its profit," the daily Abrar quoted him as saying. (Reporting by Firouz Sedarat, Editing by Dominic Evans)