Thursday, July 26, 2007

In Iran: Guns Ready, Mouths Hungry

Iran's economic woes continue... it began with inflation and unemployment, then came the gasoline rations, and now ever more dire measures:

Amir Taheri: Putting up the Family Jewels for Sale

What would you do when faced with a cash flow problem? You might try to curb expenditure, work harder to earn more, borrow money, or, when all else fails, put up the family jewels for sale. The latter is precisely what President Mahmoud Ahmadinejad's administration is trying to do as it faces a cash shortage.

And how has Ahmadinejad been able to hijack his ailing country's economy?

The virtual abolition of Article 44 is a major political victory for Ahmadinejad, something that his two immediate predecessors as presidents failed to achieve.

His hands are no longer tied by the Constitution; Ahmadinejad is now putting up public businesses for sale that could be regarded as family jewels.

But where is the money going?

According to estimates, some $10 billion has been pumped into pork-barrel projects that often fuel inflation further. Ahmadinejad has also increased expenditure on his so-called "exporting the revolution" programme. Syria has received almost $3 billion in cash and cut-price oil. The Lebanese branch of Hezbollah has been rewarded with $1.8 billion while the Palestinian Hamas movement has collected almost $1 billion. A further $3 billion has been spent on financing anti-US political and armed groups in Iraq and Afghanistan.

Not to mention...

The biggest rise in public expenditure, however, has come from increases in imports, as the government tries to stockpile "strategic goods" in anticipation of war with the US.

This news should cause the US to heighten its hype and rhetoric about an invasion of Iran. It seems the Islamic theocracy is conducting a pseudo "Arms Race" with the United States by arming itself and like-minded neighbors.

We should oblige Ahmadinejad and the mullahs. Their troops will be armed, but their bellies will as empty as their gas tanks.

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