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Iran's second phase of subsidy reform

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Published on Jul 21, 2012

19 months has passed since the Iranian government implemented its subsidy reform plan, a massive undertaking likened to a surgical procedure by those who finally made the first incision. Everyone was aware of the magnitude and inevitable side effects of the task; one being price hikes that would pressure the nation, but relieve the government of an annual multi-billion dollar subsidy pay out, that the Iranian nation has been receiving for decades. In the year and a half that has passed the government has begun redirecting the subsidies away from fuel and food, but given each Iranian citizen a monthly cash handout to buffer the initial shock of the price hikes.

Then 15 months later, only a few days before the 20th of March 2012, the Iranian New Year, the government started signaling the beginning of the second phase of the reform plan. Up to this point every Iranian whether rich or poor, was getting 45 thousand toman a month - that can buy about 11 kilos of rice, the Iranian staple. As part of the new phase that amount was to increase by 28 thousand, but this time, not for everyone. The rich would be asked to voluntarily forfeit the extra amount.

Three weeks into the New Year, certain people got a text message informing them that they were among the 10 million that were being asked to do just that. The text message forewarned the nation that the second phase of subsidy reform had begun. But the government is facing opposition where price hikes are concerned. In this edition of the show we'll be looking at the goals achieved by the first phase of the reform plan, and what's planned for the second phase.

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