Iran Snapshot: "Playing With Numbers" --- Claims and Realities on the Economy (Tehran Correspondent)
Thursday, July 14, 2011 at 7:35
"A Correspondent" in Tehran reports for Tehran Bureau:
Last month, as a flood of exuberant economic forecasts poured on Iran on the back of an unusually positive International Monetary Fund press release, one on-the-ground observer morosely invoked an old Iranian proverb: "My cheeks look rosy because I slap them" (Bah seeli sourat ra sorkh negah dashtan). To the members of Tehran's business and financial community, it appears the Iranian government has adhered to this saying, perking up its numbers to present the world with a peachy picture of its less-than-stellar economic performance.
On June 13, the IMF publicized the findings of a routine mission to the Islamic Republic. Aside from reporting a staggering increase in year-on-year GDP growth (from 1.5 percent to 3.5 percent), the IMF mission praised authorities for "early success in the implementation of their ambitious subsidy reform program." Unveiled last December by President Ahmadinejad, the reform program is estimated to have cut around $60 billion worth of government subsidies on fuel, wheat, and bread, replacing them with per capita cash handouts to a bulk of the population.
According to the IMF, the reforms have thus far been masterfully implemented. Runaway inflation has been curbed and social inequalities have been allayed. Together with commendable privatization efforts and a thriving financial sector, the reforms are increasing Iran's overall economic competency, the report suggests. But experts in Tehran have a far bleaker perception of Iran's economic prospects. They emphasize the reports' failure to take into account the subsidies' negative effect on non-oil growth, their longer-term financial viability, as well as the real state of inflation and unemployment. "It's contrary to the facts," said "Afshin," a source from the financial and diplomatic community. "When a delegation writes that they thank you for the hospitality, it means there is some problem.... You see, Iranians are very good at playing with numbers."
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