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Iran Makes Itself More Vulnerable to Outside Pressure

(Washington Institute for Near East Policy) Patrick Clawson - On August 2, Tehran distributed a sixth installment of cash payments to 73 million Iranians in lieu of subsidies on fuel, natural gas, electricity, and essential items such as bread. Virginia Tech economist Djavad Salehi-Isfahani has estimated that poor Iranians with incomes in the bottom 10% are receiving seven times more than the extra costs they pay due to the removal of subsidies. Not surprisingly, the poor have not objected to this reform. As long as its oil income remains high, Tehran should be able to pay for those checks, but if oil prices drop or sanctions impede financial flows, Tehran will have great difficulty paying its promised $45 billion per year, making the regime more susceptible to foreign pressure. The writer is director of research and head of the Iran Security Initiative at The Washington Institute.
2011-08-08 00:00:00
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