World states asking for Iran's help with economic reforms

Iranian President Mahmoud Ahmadinejad lauded Tehran's success in implementing the Subsidy Reforms Plan, and said many world states have demanded Iran to help them put a similar plan into action. "Many countries are asking Iran to help them with economic plans," Ahmadinejad said, addressing a gathering on the occasion of the first anniversary of Subsidy-Cuts (also known as Subsidy-Reforms) plan. "A number of them have even asked us to help them with the management of their economies," the president added. In September, the World Bank (WB) praised the economic reform plan and said Iran was able to decrease poverty and income inequality notably following the launch of the plan in December 2010. The banks said the Iranian government applied a direct cash transfer program while raising the prices of petroleum products, water, electricity, bread and several other products. It also said that in the years 2007-2008 overall subsidies represented 27 percent of gross domestic product (GDP), but in 2009-2010 economic growth rose by 3.5 percent whereas prudent macroeconomic policies lowered inflation to around 10 percent and ensured a fiscal surplus. Also, Director-General of the United Nations Industrial Development Organization (UNIDO) Kandeh k. Yumkella praised Ahmadinejad's subsidy-cuts plan, and described it as a brave move by the Iranian government. The implementation of Subsidiary Reform Plan was a brave work that Iranian government managed to do, while many countries have not been able to do, Yumkella said in a meeting with Iran's Minister of Industry, Mine and Trade Mehdi Qazanfari in Vienna in November. Earlier this year, senior Iranian officials said Tehran has saved over $22bln in less than a year since it started implementing the subsidy reforms plan last December. On December 19, 2010, Iran began a long-awaited subsidy reforms plan after months of speculation regarding the timing or degree of the subsidy cuts. The plan included subsidy cuts on energy prices, including the heavily subsidized gasoline prices. The price of heavily subsidized gasoline (for the first 60 liters purchased by each motorist per month) was increased to 4,000 rials ($0.40) per liter, from 1,000 rials ($0.10) per liter, and all gasoline purchased above the monthly quota was priced at 7,000 rials ($0.70) per liter going forward. Iranian President Mahmoud Ahmadinejad announced at the time that the launch of his economic reform plan is aimed at overhauling the country's economy by phasing out energy and food subsidies. Under the plan all subsidies are to be gradually removed during a five-year period. The subsidy cuts (also known as targeted subsidies) plan - encompassing key consumer goods such as gasoline, natural gas, and food - is said to be one of the most important undertakings in Iran's recent economic history. Ahmadinejad has also vowed that the Iranian government would tackle economic problems such as housing, unemployment and improve the banking system through his economic reforms plan. According to the president, the initiative would lead to a better distribution of wealth among the public. Officials say energy subsidies have cost the Iranian government around 100 billion dollars. Analysts say that the plan is in line with recommendations from global financial organizations which advised Iran to get rid of a heavily subsidized economy if it wanted to boost its economic power.