Iran Labor Report: Ahmadinejad’s Anti-Imperialism is a myth!

21 01 2010

Ahmadinejad a Progressive?

Ahmadinejad’s anti-imperialism is a myth; so are his supposed leftist credentials.

Network of Iranian Labor Unions (NILU)

There is a fiction going about in some progressive circles around the world according to which Ahmadinejad is a great nationalist crusader, that he is a champion of the poor and that he is a man of the people. This is certainly shocking to the ears of most Iranians (including many Iranian workers) who consider their president to be a demagogue and a petty dictator. Let’s look at the facts in detail:

Subsidies Rationalization Plan. The government’s Economic Reform Plan first introduced in March 2008 followed up by the Doctor-Jekyll-like Subsidies Rationalization Plan is a carbon copy of the IMF prescriptions for neo-liberal restructuring. Its center piece is the wholesale axing of national subsidies within 5 years starting from January 2009.
One of the few victories of Iranian working class from the 1979 revolution has been the constitutionally-guaranteed right of the Iranian people to make free use of billions of dollars in assistance provided in the form of state subsidies. Gasoline users, bakeries, city bus commuters, and consumers of public utilities are among the tens of millions of people who have benefited to one degree or other from this policy. For instance, bus commuters in urban areas pay only about a tenth of the fares they would have otherwise paid. Gasoline is only 40 cents per liter. Cooking gas is a fifth of its so-called market rate, etc, etc.
It is important to note that these benefits were not a result of an act of generosity or some kind of government largess but an achievement wrought by the sacrifice and blood of millions of Iranians. It is now all coming to an end. Ahmadinejad government has brazenly set about ending this 30-year arrangement with a fanatical zeal. Starting this January, subsidies will be cut in large increments. In this, the government is supported by the majority of the country’s ruling factions who expect to grab various chunks of the bonanza. (Significantly, opposition figure Mir Hossein Mousavi has sharply criticized the plan as ill-advised and misguided.)
There is nothing novel or redeeming about the Subsidies Rationalization Plan. Ahmadinejad’s price liberalization scheme is nothing but a regurgitated version of the infamous shock therapy treatment devised by the late Milton Friedman of the University of Chicago fame. It was first applied in Chile in the late 70’s and later in East and Central Europe with devastating effect for the poor and working classes.

Privatization Plan. Ahamdinejad has dutifully signed on to the so-called Amendment to the Article 44 of the Constitution which envisions the wholesale dismantling of the public sector and its handover to crony capitalists.
According to the government’s own 2008 statistics, one third of the state assets have already been privatized ($37 billion out of $110 billion) of which 78% occurred under the Ahmadinejad administration. This too is a carbon copy of the IMF model for structural adjustment. In fact, despite abundant national resources, Ahmadinejad is eager to have Iran join WTO at the earliest possible date. Too bad the WTO has only allowed his government an observer status!
The only difference between privatization in Iran and privatization in the rest of the world is that it is not really the private sector that ends up with the public enterprises in question. Rather, it is the Revolutionary Guards Corps of Iran (RGCI) and its sundry subsidiaries—followed by less powerful players—that have grabbed the prized state assets. It would be a real stretch of imagination to call these RGCI-controlled entities as Iran’s private sector. In the last year alone, tens of billions of dollars in state assets were handed out to the RGCI in no-bid, below-market-price sweat deals. For example, last October, in the stock market’s largest transaction ever, an $8 billion purchase was made of the country’s telecommunication industry in a sweet deal that is costing the RGCI next to nothing.
In other words, the Iranian people are getting the worst of both worlds! They are gradually losing their public ownership rights while a small clique of hard-line military men and militocrats with absolutely no managerial or technical skills are calling themselves the new masters of the country. Already, many fraudulently “privatized” firms are being run to the ground or cannibalized of choice assets thanks to the inexperience, greed and venality of the RGCI.

Income Redistribution. Much has been made of Ahmadi’s pseudo-leftist Robin Hood-style rhetoric to steal from the rich and give it to the poor. The last four years have seen, thanks to the huge oil income windfall, possibly the largest-ever budget increase in Iran’s 2500-year history; yet, all that Ahmadinejad and his defenders have to show for are the so-called Justice Shares; small salary increases for selected groups; and some paltry micro-credits for low or middle income families.
The much-touted Justice Shares have an uncanny resemblance to the Voucher Privatization scheme that was practiced in Russia during the 90’s. The plan led to the destruction of the state sector and the accumulation of power and wealth in the hand of mafia oligarchs.
As far as the salary increases, the 2007-2008 inflation rates of 36% and 33% swept away whatever income boost the government had promised to prospective voting blocs.

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