TEHRAN, Iran — On the last day of his presidency, Mahmoud Ahmadinejad traveled 30 kilometers (19 miles) east of Tehran to inaugurate a residential estate, one of hundreds he commissioned under his "Maskan-e Mehr" housing project to build 600,000 low-income homes across the Islamic Republic.
Iran’s new government say that the cheap credit Ahmadinejad used to fuel Maskan-e Mehr has devastated the economy. Many in Iran see the project — for which the former president famously auctioned off his 1977 Peugeot 504 — as emblematic of his approach to economic policy: Populist, redistributive initiatives turn into a herd of white elephants.
While new administrations want to blame their predecessors for their lousy economic inheritance, President Hassan Rouhani’s “government of hope and prudence” has good reason to be alarmed at the legacy of Maskan-e Mehr.
Since 2007, Ahmadinejad provided free government land and cheap credit to Maskan-e Mehr developers for homes for over 2 million Iranians. Abbas Ahmad Akhoundi, Iran’s new housing minister, said that 40% of the recent spike in inflation has been caused by the housing project.
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