In the aftermath of the Great Depression of 1929, Franklin Delano Roosevelt, the President of the United States of America had laid down his new deal policy comprising of the three Rs- Relief, Recovery and Reforms. One of the measures undertaken was the establishment of Federal Emergency Relief Administration (FERA) to provide relief to more than 30 million affectees, including the close to 7 million who had lost their jobs. Of the many tasks assigned to FERA an interesting one was the handing out of the dole to the unemployed. Dole is the money that a state provides to its citizen without any services attained so as to enable them to make ends meet. This needs to be distinguished from the social security providences which are given to the pensioners, widows and the aged since the recipients of the dole are the public at large and not a particular age or sex group. It was a unique program in the modern history and, despite the bitter criticism levied against it for the complacency that it sets in and the loss of skills and manpower that it encourages, has been replicated the world over ever since. Pakistan’s Benazir Income Support Program is an example of such.
Mired by sanctions and economic woes Iran too has put into effect a similar program, the targeted subsidies plan, whereby cash is handed out to the majority of Population. The first phase of the program was implemented near the end of 2010 under the auspices of the Ayatollah Ali Khamanei with Mahmoud Ahmadinijad, the Iranian premier claiming it to be the “biggest economic plan of the previous 50 years”. It incorporated payment of about $40to the 90 per cent of the population with an aim to provide them with means of basic sustenance. The second phase of the program, expected to be executed by the end of April, yearns to decrease the number of recipients to 80 per cent of population while increasing the paid amount to $60. The money to be paid has been procured by reducing the general subsidies on fuel and food items. The idea behind this ‘targeted’ subsidies plan was to provide relief where it is most needed. Thus in essence the affluent with greater affordance capabilities, instead of being put into a different tax bracket so as to acquirehigher payments from them to the government are made to pay more for the basic amenities. This way the government ensures that only the impoverished are supported through subsidies therefore reducing the stress upon the national exchequer.
Although, the policy does boast of some positive traits it has been criticised by many different quarters. The naysayers believe it’ll further escalate the precipitous inflation. Some of the opposition members in Iranian parliament have contended that the inflation rate is 50 per cent, much larger a rate than the 20 per cent that the official figures quote. The situation has further aggravated after the imposition of the recent America led sanctions putting the Iranian progress in hiatus and a devaluation of Rial. The figures such as the three fold increase in Petrol prices and 500 per cent rise in coal rates are often quoted to vindicate the economic failures. In such circumstances targeted subsidies plan, with its communist tendencies, would further hinder the economic growth.
Also, it must be noted that the new deal policy of F. D. Roosevelt that the targeted subsidies plan emulates was a success only because the dole providence was just a small part of the variant policies implemented to tackle the depression. The plan alone is not sufficient to control the miseries of the aggrieved and as such is certainly not the biggest economic plan that Ahmadinijad wants it to be. If the Iranian government earnestly wants to improve the conditions of the masses it must increase its export and control the inflation rather than focusing upon palliative measures. Since a healthy currency rate and cheap imports could only provide the sought long term relief. The Iranian government is hard pressed to reconsider the nuclear programme as the time is running out for it to control the endless spiral of poverty that the sanctions are likely to push its people into. Iran being a signatory of Non-proliferation treaty the government must weigh its options wisely. The sceptic west would not come to its assistance so long as the nuclear program persists and therefore the few Asian countries supporting Iran are its only solace and it is here that the government should strive to improve economic ties.
