Iran subsidies program creates unemployment reduces production

Iran Materials 10 January 2012 18:04 (UTC +04:00)

Azerbaijan, Baku, Jan. 10 Trend M. Moezzi

Iran's targeted subsidies program has led to reduced operations for 890 businesses in industrial parks, leaving more than 4,000 people unemployed, the Mehr news agency reported a deputy industry minister as saying.

Before the program to eliminate subsidies for energy and commodities began a year ago, 127 industrial units were closed and 2,340 workers unemployed, said Deputy Industry, Mines and Trade Minister Fakhrollah Molaei. With help from provincial governments, 40 units and 937 people were returned to work, added Mr. Molaei.

Currenlty, 87 industrial units have closed down and taken 1,400 jobs with them and 219 additional units are on the verge of closure said the minister.

Another 890 industrial units have had to reduce production and layoff more than 4,000 employees and efforts are being made to address their problems.

The Iranian government pays each citizen $45 a month as compensation for commodities and energy subsidies which were cut when the targeted subsidies program began.

The second phase of Iran's targeted subsidies program is to include an increase in electricity prices and although suggestions have been submitted to the government, nothing has been decided. Iran's energy minister said last week the government wasn't allowed to increase the price of electricity more than 20 percent.