President Ahmadinejad who had announced his new “Great Economic Leap” agenda during the Iranian new year message on March 20th, 2008, issued a series of executive orders and met a number of provincial Governors in which he called for wider efforts to control the rising national inflation. These efforts came at a time when the Minister of Economy Dawood Danesh Jaafari told Mehr news agency, “Despite wide efforts, the government has not attained its goals regarding inflation last year in which there was a rise of 4 to 5 percent in the rate of inflation compared to the previous year.”
Economists have openly charged the government’s policies to be the cause of the rise in prices. Saeed Shirkund, for example, told Aftab, “The head of the cabinet and the head of the Majlis, including a number of others within each branch, have each tried in recent weeks to hold the other responsible for the spiral inflation, while the real cause of inflation for last year and the year before rests with the government and the Majlis.” Dr Mohammad Bagher Nobakht, the head of the Center for Economic Studies belonging to the research center under the State Expediency Council told ISNA student news agency, “Not only will economic problems be lessened next year, but the economic growth too will be about 6 percent less this year.”
Experts believe that the recent circulars by the administration will only complicate the problems. In one specific government circular to its departments, President Ahmadinejad has asked government departments to each forego 20 percent of their budget.
The newspaper Asr-e Iran interprets the circular of the government requesting them to reduce their budget to be in contradiction to measures passed by the Majlis. “While the Majlis spent three months working on the budget for 2007 and finally passed the budget bill by slightly increasing its initial amount, the administration - in amazing contrast - has requested the operational divisions of the administration to only consider 80 percent of the allocated budget for 2008 to be applicable.”
ISNA student news agency also reported that in the recent gathering of Iran’s Governors, President Ahmadinejad linked the growing rate of inflation in the country to Western countries and said, “While the rate of inflation was bitter, but its actual amount is less than what they thought.” Looking into the future, the president said, “We shall be celebrating the third decade of the revolution and every operational division and province should complete and inaugurate its projects in thirties (i.e. 30, 60, 90, etc).”
In a related circular, at its most recent meeting, the cabinet passed an order according to which the banking system should limit its monetary disbursements to the public to 5,000 million Toman (which is about $1,000) per person per day. It should be noted that many businesses in the country need more than that limit for their daily operations. Surgeons for example need much more than that to perform their operations forcing patients to collect the money they need to pay the surgeons during several days. The circular is very specific in making sure that banks authenticate their customers with IDs such as the nation l ID code and their zip codes. This circular also tasks banks to send their records every two months to the national documents and land registry, including company registrations organizations (Sazeman Sabt Ahval-e Keshvar and Sazeman Sabt Asnad va Amlak Keshvar) for their review and confirmation, further providing that customers whose records contravene these stipulations will have to make their transactions compliant within a month. The Central Bank of Iran is the ultimate policeman in the process which must enact punitive measures for violators.