Distribution of Cash to People to Engineer Elections

Roozonline - Majlis Surrenders to Ahmadinejad?

Just as conservative critics of the government and their related media had been predicting, Mahmoud Ahmadinejad is trying to distribute cash to the lowest economic strata of Iranian society prior to the upcoming presidential election, a plan that his critics say is an election gesture with the goal of winning over votes for the presidential candidate of his choice. Prior to this, Ahmadinejad had attempted to distribute between 200,000 to 250,000 Toman (a US Dollar is traded at about 4,000 Toman in the open market) to the populace by forcefully pursuing to implement the second phase of his subsidies reform plan, but he was meet with resistance by the Majlis and the passage of a law that stopped the effort.

But just as the deputy speaker of the Majlis Mohammad-Reza Bahonar had predicted that Ahmadinejad would not retreat from his goals, the head of the government is now trying to directly disperse cash through “Livelihood Cards” and, as reported by pro-government news sites, has even managed to get the support of a minority group of MPS in parliament.

But if he goes ahead with the plan and actually distributes money in an economy that is already suffering from a rapidly falling currency and where levels of liquidity have attained new heights, inflation is most certainly going to hit the 100 percent rate. Reports indicate that some 17 million Iranians fall in the low income group that his plan targets to provide the new cash payouts.

Based on what Jahan News website has written, the agreement between Ahmadinejad and some Majlis representatives is that about 100,000 Toman (about 4,000 Toman equal a US Dollar in the open market) would be paid to every member of the low income group through the Basij organization.

Jahan News’ article quotes an official in the ministry of commerce to have said, “The country’s economic mobilization committee shall be responsible for the distribution of the new family Livelihood Card. Under the first phase of the plan, rice, cooking oil and sugar will be provided to the low income groups. At a later phase chicken and meat will be added to the distribution list.

” The article continues, “The ministry of industries and mines has traditionally been responsible for the management of the distribution of daily goods to the public but distribution of goods stopped when the subsidy plan went into effect. Now with the new arrangement between the Majlis and the government, the plan to distribute goods among the public will return and start to be implemented around March.

Hamid-Reza Khosoosi, a Majlis member in the economics committee told Tasnim website, “The debate over the implementation of the 2nd phase of the subsidy plan versus the distribution of 100,000 Toman to low income families, including those who fell on the list of the Komite Imdad, was discussed at the joint government-Majlis meeting. No decision has yet been made about the actual amount or how this assistance will be provided to the low income groups. Various proposals are being discussed in how to assist members of this group before the end of the current Iranian calendar year ending on March 21st, 2013 – whether through payment of cash to bank accounts or to electronic cards. Even the ceiling of the amount of assistance has not been finalized.”

The government’s spokesperson Gholam-Hossein Elham too has confirmed the debate and discussions over the issue in the joint government-Majlis sessions.

According to the government’s version of events, it appears that some form of assistance – cash or goods - will be going to the low income families before the end of the current Iranian calendar year even though official seem to be cautious in making categorical promises to the public. According to Ismail Jalili, a member of the Majlis, Ahmadinejad envisions finding the funds for this handout plan by hiking up the price of petroleum 4.5 fold. Others have said that the Majlis would reject such a steep rise in energy costs for the consumer who is already facing unplanned hardships because of other sources of inflation.

Observers have commented on Ahmadinejad’s intentions to buy favors from the public through such distribution of cash or goods close to the June presidential elections in which the president has the aspirations of presenting his own candidates.

Bahonar had earlier predicted that if Ahmadinejad presented his plan to the Majlis, the parliament would not be in a position to reject it and would eventually approve it.

It should be noted that in the 2009 presidential election, the group that investigated the fraudulent practices of the process wrote that distribution of cash among the populace was a method of buying votes which impacted the outcome of the election. Ahmadinejad was announced the winner of that race, which brought about massive street protests followed by a violent crackdown, arrests, imprisonment and the expulsion of the reformists from the formal national political scene. By Nazanin Kamdar