Iran Spat Pits President Against Supreme Leader

Political turmoil seems to be the norm in Iran: Last year it was the reformist opposition taking to the streets challenging what they saw as the fraudulent re-election of President Mahmoud Ahmadinejad. Now another political fissure has emerged within the conservative camp, threatening possible open conflict between Iran’s president and its supreme leader.

There are significant differences among conservatives in Iran over many issues, but right now the focus is on economic subsidies. The price of basics in Iran, like bread, electricity and gasoline, has been heavily subsidized for decades. But when Ahmahinejad ordered the removal of subsidies two weeks ago, the price of gasoline quadrupled and the price of bread tripled overnight.

What’s more, Ahmadinejad moved to seize the revenues that would have been used for subsidies for his own purposes. He has begun paying the poorest segments of Iranian society to help mitigate the pain of the price increases.

Some estimate the value of the revenues saved at $100 billion, says Abbas Milani, director of Iran studies at Stanford University.

“They are taking the equivalent of $100 billion out of the economy that helped subsidize peoples’ livelihood, and giving back a pittance,” he said. “They are giving back the equivalent of $40 per person.”

Conservatives in the Parliament wanted to control these funds, but Ahmadinejad quickly recognized their enormous political value, Milani said.


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