Subsidy reform: A year later
A year ago, Iran embarked on a daunting task of gigantic proportions to start redirecting the unsupportable subsidies on food and fuel, toward productivity and development.
The endeavor was part of a seven step economic overhaul plan. The government was spending approximately $100billions on subsidizing energy prices and many consumable goods like bread, sugar, rice, cooking oil and medicine. And this in itself had encouraged a culture of tragic waste.
In the past three decades fuel prices were the prime factor accounting for a 500% rise in Iran's domestic energy consumption and that's hardly surprising when a liter of petrol cost less than a liter of bottled water.
The Iranian nation has been receiving subsidies since before the revolution, but after the political upheaval of 1979 and the devastating war that followed, the government decided to continue supporting the people.
But it has been a terrible burden for a government under every kind of pressure from Western nations. It was President Ahmadinejad who decided to make subsidy reform one of the key events of his term in office.
It certainly was not a publicity stunt, as the nation was quite accustomed to dirt cheap fuel, but it was a vital and courageous financial decision. The question is, how well has this major project been executed in the past year. That's what we'll be discussing in this episode of Iran today.