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Iran's Government Subsidies Are Incentives for Poor Voters

Cash handouts as part of Iranian President Mahmoud Ahmadinejad’s subsidy reform programs have a constituency among Iran’s lower classes.
EDITORS' NOTE: Reuters and other foreign media are subject to Iranian restrictions on their ability to film or take pictures in Tehran.
An Iranian man looks on as he sits on a bus in Tehran December 22, 2010. With Iranians feeling choked by foreign sanctions, broken promises and money worries, President Mahmoud Ahmadinejad faces as much pressure on the economic front as from politics. Ahmadinejad has cut fuel and food subsidies to save $100 billion on the state budget and to make Iran less vulnerable to an

In the run-up to the Iranian Guardian Council’s announcement of "vetted" presidential candidates, it is useful to look into a crucial matter on the minds of many voters. The future of cash payments to households as part of the subsidy reforms is set to be a major campaign issue.

Late last month, in a little-noticed announcement, the Central Bank of Iran declared that it would only provide a bottom-rate foreign exchange to importers of wheat, barley, corn and soybeans. Most other importers were referred to its trade room, where currency is sold for twice the price. Predictably, the cost of many goods immediately jumped amid protests from parliament.

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