Pressures have been on both the governments of Iran and Venezuela to bring their fiscal and monetary policies back into line with neoliberalism. Much of what Venezuela has been trying to achieve gradually, in the way of taking control of national resources, was decisively accomplished in Iran in the early years of the Islamic Revolution, so Iran's President has fewer cards he can play, for the battle can only be a defensive one in this post-socialist age. Moreover, despite the Cultural Revolution at the beginning of the Islamic Revolution, the culture of Iran's economists has pretty much become Americanized again. -- Yoshie
<http://www.mehrnews.ir/en/NewsDetail.aspx?NewsID=518421> Tehran: 22:56 , 2007/07/15 By M. A. Saki Movement toward consensus on economic policy
TEHRAN, July 15 (MNA) -- The meeting the president and his economic team held last Thursday with a group of economists who had criticized his government's economic policies in an open letter four weeks ago will hopefully be of some benefit to the Iranian economy.
The fact that the president agreed to sit and listen patiently to the views of the dissenting economists is praiseworthy since similar warnings in the past were wrongly described as politically motivated by some people who consider themselves aligned with the government.
As the economists have said, the current government has inherited some structural economic problems and thus nobody expects it to perform an overnight miracle. However, now that the global economy is experiencing high growth and Iran is benefiting from this boom through high oil prices, it is regrettable that the Iranian economy is lagging behind other developing countries in the region.
Mahmud Ahmadinejad won the 2005 presidential election on campaign promises that he would work to establish social justice and fight economic corruption.
At the beginning of his presidency, when he introduced Farhad Rahbar as the new director of the Management and Planning Organization (MPO), which was recently split into two organizations, he uttered the now famous words: "People should not be crushed under the wheels of development."
The president's statement was a veiled reference to the economic austerity model, which necessitates freeing up prices and moving toward a market-based economy, a policy that his predecessors' administrations pursued to some degree in regard to some commodities and services after the 1980-1988 Iran-Iraq war.
There is no doubt that the president is sincere and serious about wanting to raise the standard of living of the less privileged socioeconomic strata. However, the economic policies adopted to reach that noble goal have had the opposite result, fuelling inflation to the detriment of the poor masses and to the benefit of the rich.
Experts say the major problem is the fact that the government, flush with cash from high oil prices, has been injecting the oil revenues into the market in order to boost the economy and increase the purchasing power of citizens, especially the working class.
The government withdrew $35.3 billion from the Foreign Exchange Reserve Fund in Iranian calendar year 1384 (March 2005-March 2006) and $45 billion in 1385 (March 2006-March 2007) and is expected to withdrew yet another $45 billion in the current year (ends March 19, 2008).
In a similar letter in June 2006, economists warned about the inflationary consequences of such monetary policies, but, unfortunately, those warnings were not heeded and finally the economists' predictions came true.
Even some pro-administration parliamentarians who are economic experts have warned about the consequences of withdrawing so much money from the reserve fund, but nevertheless, each time the government has asked for money, the Majlis has authorized the lavish spending.
The president, who himself is a former university professor, is expected to value the views of experts more than a head of state without such an academic background.
Clearly, no administration should ever deprive itself of the views of experts, especially for the implementation of economic and monetary policies.
(July 16 Tehran Times Opinion Column, By M. A. Saki)
MS/HG END MNA
<http://www.presstv.ir/detail.aspx?id=16574§ionid=351020101> President urges active public involvement Mon, 16 Jul 2007 09:05:05
President Mahmoud Ahmadinejad has said that the whole Iranian population should be actively involved in administering the country's affairs.
Addressing the cabinet ministers on Sunday, the chief executive underlined that the country does not belong to any specific political faction and people from all walks of life should contribute to the management of social, political and economic affairs, IRNA said.
President Ahmadinejad stated that through collective collaboration and convergence, every single individual should act as a member of a-70-million-strong cabinet.
He called all experts and intellectuals to press ahead with their key roles in the country's development.
Referring to his recent meeting with top economists on Thursday, the chief executive urged his cabinet members to hold joint sessions with economic experts and benefit from their proposals in helping the country recover from economic ailments.
MSM/BGH
<http://www.presstv.ir/detail.aspx?id=16503§ionid=351020102> Justice encourages taxation Sun, 15 Jul 2007 12:08:18
Iran's President Mahmoud Ahmadinejad has said that taxation should be based on justice in a bid to encourage people to pay their taxes.
In a meeting with a number of Iranian tax officials, President Ahmadinejad noted there is unfortunately a general misconception that oil revenues are indefinite and that they exceed national expenditure, ISNA reported.
Everyone should know that oil revenue will be exhausted one day and if we spend oil revenues today, we will not be able to pay for our expenditure in future," he asserted.
President Ahmadinejad further said that media play a significant role in encouraging people to pay taxes and that the Islamic Republic of Iran Broadcasting should cover more programs on taxation.
"The value of transactions conducted in the country surpasses 6000 trillion rials and receiving only five percent of the above figure as tax will double the tax revenues of the government," he concluded.
HSH/NN
<http://www2.irna.com/en/news/view/line-22/0707140398234452.htm> Today: Monday July 16, 2007 President calls for fair taxation Tehran, July 14, IRNA
Iran-Taxation-Ahmadinejad
President Mahmoud Ahmadinejad on Saturday called for fair taxation in a bid to encourage timely tax payment.
"One of the factors which motivate timely tax payment is levying taxes on a fair basis. Tax payers should be encouraged to go ahead and contribute to tax estimation and payment voluntarily," said President Ahmadinejad in an address to a group of officials in charge of tax collection.
President Ahmadinejad also called on the respective officials to build culture of voluntary tax payment among the citizens.
Elsewhere in his address, President Ahmadinejad said national resources are assets that should be kept for future generations.
"We are not the only people having the right to use the resources today; we should use them as we are entitled to and should know that future generations too have the right to benefit from them," said the president.
He warned against excessive consumption of resources and said any extravagance would get the country disarmed before enemies in future.
Prior to the speech, the President in a symbolic gesture submitted his tax statement to respective officials.
Minister of Finance and Economic Affairs Davood Danesh-Jafari and head of the Tax Collection Organization Ali-Akbar Arab-Mazar were present in the ceremony.
The president awarded exemplary officials and experts at the meeting.
1420/1416
---> Iran-Taxation-Ahmadinejad
<http://www.forbes.com/feeds/ap/2007/07/06/ap3890986.html> Venezuela to Act Against Inflation Associated Press 07.06.07, 7:54 PM ET
Venezuela has begun to slow public spending and plans to issue some $2.8 billion in bonds and treasury notes by the end of the year as it seeks to counter inflation, the country's finance minister said Friday.
Finance Minister Rodrigo Cabezas told Dow Jones Newswires in an interview that the idea is to gradually moderate spending while monitoring the economy's response.
"We're talking about a policy of fiscal responsibility," he said, but declined to quantify the spending slowdown. The government moves won't amount to a radical spending cut to "sacrifice production at the altar of an inflationary battle," Cabezas said.
Inflation has become a major headache for President Hugo Chavez, who has promised to protect the purchasing power of Venezuelan families. Last year saw 17 percent inflation, but this year Cabezas said the government expects to bring inflation below that level.
He said 12 percent inflation remains the 2007 goal but that "it will be very difficult to reach." He said for Venezuela a 14 percent level is sustainable and manageable.
Venezuela's economy, boosted by high oil prices, has seen strong growth. Cabezas predicted the economy will grow at least 8 percent this year. He said even with the spending slowdown, the fiscal deficit should end the year at 2 percent of gross domestic product.
As for Venezuela's currency, he said devaluing the bolivar is not an option anytime soon. Venezuela has had a fixed exchange rate since 2003, when Chavez imposed currency and price controls in an attempt to bring stability to the economy.
In the four years since, the Central Bank (other-otc: CHPA.PK - news - people ) has devalued the bolivar twice. The rate has been fixed since early 2005 at 2,150 bolivars to one U.S. dollar. The unofficial rate on the black market, however, has edged above 4,000 bolivars to the dollar in recent weeks.
<http://www.bloomberg.com/apps/news?pid=20601086&sid=abFm7E83pO94&refer=latin_america> Venezuela 2008 Inflation May Fall Below 10 Percent, Leon Says
By Matthew Walter and Jose Enrique Arrioja
July 11 (Bloomberg) -- Venezuela's annual inflation rate, the fastest in Latin America, will probably fall below 10 percent by the end of 2008 because of central bank steps to moderate consumer demand, bank director Armando Leon said.
``We're expecting in the coming months that inflationary pressures will ease substantially,'' Leon said today in an interview in Caracas.
The central bank will raise minimum interest rates on savings deposits and require banks to keep more cash in reserves as part of a plan to reduce the amount of money circulating in the economy. Venezuelan inflation was 19.4 percent in June, as consumers in the oil-rich nation took advantage of cheap credit to increase spending and food shortages drove up prices.
While the central bank is prepared to take additional steps to rein in inflation, it will take care not to slow growth and job creation, Leon said. Venezuela's economy probably expanded around 9 percent in the second quarter, he said.
``We don't have a policy of sacrificing growth for inflation,'' he said.
Leon also said there isn't a need to devalue to bolivar, because the government has enough reserves and oil revenue remains strong. Venezuela's reserves will probably rise to around $30 billion by the end of 2007, he said.
To contact the reporter on this story: Matthew Walter in Caracas at mwalter4 at bloomberg.net Jose Enrique Arrioja in Caracas at jarrioja at bloomberg.net Last Updated: July 11, 2007 15:00 EDT
<http://www.plenglish.com/article.asp?ID=%7B9B92A262-7BD9-4863-95A9-E5416213961F%7D)&language=EN> Venezuela Set on Lower Inflation Rate
Caracas, Jul 11 (Prensa Latina) The Venezuelan Minister of Finance, Rodrigo Cabezas, reasserted that the government is set on maintaining inflation limited to 12 per cent this year, rate five points lower than that registered in 2006.
We do not give up, we keep working for a 12 per cent inflation rate, assured Cabezas to state-run Venezolana de Television, compared to 17 per cent in 2006.
The average rate for the period 2000-2006 was 16 per cent, which could have been four points lower if it had not been for years 2002 and 2003, marked by the coup d´état against president Hugo Chavez and the oil sabotage, respectively.
Cabezas recalled that in the decade of the 80s of last century, during the stage of neoliberal recipes in the Venezuelan economy, inflation amounted to 43 per cent.
The Minister of Finance dismissed the idea of an economic policy having development as an instrument against inflation.
As for economic growth, he recalled the country registers 15 consecutive quarters in growth and by the end of this year, the Executive expects to achieve an eight per cent increase of the Gross Domestic Product (GDP).
Cabezas pointed that the indicator is basically due to investments in the private sector, executed by part of Venezuelan businesspeople who don´t listen to the bad omen issued by leaders of that segment, because they have confidence in the country.
The Minister revealed that the Central Bank of Venezuela is about to announce instruments of monetary policy to reinforce the collection of liquidity and boost rates that will stimulate savings.
sus ef fgn
PL-1 -- Yoshie