Ahmadinejad on defensive as inflation soars

A jump in inflation increased domestic criticism of President Mamhoud Ahmadinejad ahead of key elections, AFP says. The agency reports that the situation has forced him into a televised defense to deflect the growing complaints. Ahmadinejad on defensive as inflation soars Inflation reached 19.1 year-on-year in the month to end-November, according to central bank figures, compared with a rate of around 12 percent when Ahmadinejad came to power in 2005. A spike in the price of staples like chicken, fruit and tomatoes has hit most the poor hardest, the very community that helped Ahmadinejad win power. "Everything is going up every day," Zari, a retired teacher, told AFP in a low-income eastern Tehran neighborhood. "It is the disadvantaged sections of society who are the worst hit. Compared to last year, everything has gone up by 40-50 percent. "I voted for Ahmadinejad but I will not do it again. He's a decent guy but he is not able to manage a country as large as Iran," she added. On Friday Iran's former president, Akbar Hashemi Rafsanjani, spoke out against Ahmadinejad's economic policies, accusing him of fighting inflation with slogans and making excessive imports. "Take this issue (inflation) very seriously... It should be dealt with using economic expertise and not with slogans and political games," Rafsanjani said in a sermon broadcast live on the state radio. His comments came five days after Ahmadinejad gave a televised interview to combat growing complaints about inflation, in which he blamed his political opponents and external factors rather than the government's performance. "Avoid slogans and incorrect statistics and bring out realities," Rafsanjani said in his sermon for the prayers of the Islamic holiday of Eid Ghorban or Feast of the Sacrifice. Moderate economists have accused Ahmadinejad of directly fuelling inflation by injecting huge amounts of cash into the economy to fund local infrastructure projects and loans for the poor promised on provincial trips. The president was elected on a platform of making the poor feel the benefits of Iran's massive oil wealth and has made implementing economic "justice" (adalat) the main government slogan. "Ahmadinejad can say what he likes, but life has become impossible," said retired police officer Mohammad Abbassi, 68, who is forced to work as a gardener to make ends meet. "A month ago I bought an egg for 800 rials (around eight U.S. cents, six euro cents). Today you need to pay 1,300 rials. It is the same thing for meat and oil. You cannot find any meet for less than 70,000 rials a kilo, whereas three months ago it was 55,000." Such concerns have rattled the government three months ahead of March 14 parliamentary elections, in which reformist rivals are expected to challenge conservatives. Presidential polls are due in summer 2009. Seeking to assuage popular concerns, Ahmadinejad in his television interview acknowledged that "most people are feeling the inflation in their lives" but dodged any blame. Instead, he blamed the decline of the dollar, the hike in oil prices, Iran's reliance on imports, previous governments and even his critics, for stoking inflation expectations. Anything but his cabinet's own performance. "His economic report was full of contradictions," said Esmail Gerami Moghaddam, a member of parliament's minority reformist faction. "It is not a good argument to blame the rising oil price or parliament's decisions for the delays of the government in realizing its aims," he added. Showing the humility expected of a man about to embark on the pilgrimage to Mecca, Ahmadinejad also asked for forgiveness if he had ever harmed Iran or failed to defend its interests. "The best part of his comments was when he apologised to those whom had been harmed by him," was the cutting response of Ahmad Tavakoli, an MP who heads parliament's research centre and is a leading conservative critic of Ahmadinejad. Tehran's conservative mayor Mohammad Baqer Qalibaf, a political rival of Ahmadinejad, ridiculed the claims that the high oil price was to blame and bluntly said inflation was simply a "problem of management." In the absence of reliable opinion polls, it remains impossible to predict what impact the price rises will have on the elections, where reformists will seek to use the economy to erode the president's support base. "This is the only point that reformists and moderates can play on," said economist Saeed Laylaz. Iran's poor are still helped by huge government subsidies that have kept prices of staples like bread, petrol and electricity low throughout the current inflation problems. But huge money supply growth of around 40 percent -- twice that of when Ahmadinejad came to power -- means that inflation risks increasing further in the coming months. "The rise in liquidity is a flood that swallows up everything," said conservative deputy Ali Reza Zakani. "No one can deny that we have inflation."

Ahmadinejad on defensive as inflation soars

Inflation reached 19.1 year-on-year in the month to end-November, according to central bank figures, compared with a rate of around 12 percent when Ahmadinejad came to power in 2005.

A spike in the price of staples like chicken, fruit and tomatoes has hit most the poor hardest, the very community that helped Ahmadinejad win power.

"Everything is going up every day," Zari, a retired teacher, told AFP in a low-income eastern Tehran neighborhood.

"It is the disadvantaged sections of society who are the worst hit. Compared to last year, everything has gone up by 40-50 percent.

"I voted for Ahmadinejad but I will not do it again. He's a decent guy but he is not able to manage a country as large as Iran," she added.

On Friday Iran's former president, Akbar Hashemi Rafsanjani, spoke out against Ahmadinejad's economic policies, accusing him of fighting inflation with slogans and making excessive imports.

"Take this issue (inflation) very seriously... It should be dealt with using economic expertise and not with slogans and political games," Rafsanjani said in a sermon broadcast live on the state radio.

His comments came five days after Ahmadinejad gave a televised interview to combat growing complaints about inflation, in which he blamed his political opponents and external factors rather than the government's performance.

"Avoid slogans and incorrect statistics and bring out realities," Rafsanjani said in his sermon for the prayers of the Islamic holiday of Eid Ghorban or Feast of the Sacrifice.

Moderate economists have accused Ahmadinejad of directly fuelling inflation by injecting huge amounts of cash into the economy to fund local infrastructure projects and loans for the poor promised on provincial trips.

The president was elected on a platform of making the poor feel the benefits of Iran's massive oil wealth and has made implementing economic "justice" (adalat) the main government slogan.

"Ahmadinejad can say what he likes, but life has become impossible," said retired police officer Mohammad Abbassi, 68, who is forced to work as a gardener to make ends meet.

"A month ago I bought an egg for 800 rials (around eight U.S. cents, six euro cents). Today you need to pay 1,300 rials. It is the same thing for meat and oil. You cannot find any meet for less than 70,000 rials a kilo, whereas three months ago it was 55,000."

Such concerns have rattled the government three months ahead of March 14 parliamentary elections, in which reformist rivals are expected to challenge conservatives. Presidential polls are due in summer 2009.

Seeking to assuage popular concerns, Ahmadinejad in his television interview acknowledged that "most people are feeling the inflation in their lives" but dodged any blame.

Instead, he blamed the decline of the dollar, the hike in oil prices, Iran's reliance on imports, previous governments and even his critics, for stoking inflation expectations.

Anything but his cabinet's own performance.

"His economic report was full of contradictions," said Esmail Gerami Moghaddam, a member of parliament's minority reformist faction.

"It is not a good argument to blame the rising oil price or parliament's decisions for the delays of the government in realizing its aims," he added.

Showing the humility expected of a man about to embark on the pilgrimage to Mecca, Ahmadinejad also asked for forgiveness if he had ever harmed Iran or failed to defend its interests.

"The best part of his comments was when he apologised to those whom had been harmed by him," was the cutting response of Ahmad Tavakoli, an MP who heads parliament's research centre and is a leading conservative critic of Ahmadinejad.

Tehran's conservative mayor Mohammad Baqer Qalibaf, a political rival of Ahmadinejad, ridiculed the claims that the high oil price was to blame and bluntly said inflation was simply a "problem of management."

In the absence of reliable opinion polls, it remains impossible to predict what impact the price rises will have on the elections, where reformists will seek to use the economy to erode the president's support base.

"This is the only point that reformists and moderates can play on," said economist Saeed Laylaz.

Iran's poor are still helped by huge government subsidies that have kept prices of staples like bread, petrol and electricity low throughout the current inflation problems.

But huge money supply growth of around 40 percent -- twice that of when Ahmadinejad came to power -- means that inflation risks increasing further in the coming months.

"The rise in liquidity is a flood that swallows up everything," said conservative deputy Ali Reza Zakani. "No one can deny that we have inflation."