Economic Woes & Hopes For Change

This past week, numerous members of parliament objected to the administration`s refusal to adopt a concrete position in regards to combating inflation.

The problem has arrived in Iran, where the current rate of oil consumption coupled with heavily subsidized prices, is forcing Iran to import oil.

Today the cost to purchase oil within Iran is around 40 cents per liter. This heavy subsidy is forcing the Iranian nation not only to lose revenue from its most prized natural resource, but is also contributing to their lack of economic growth. When a country spends close to eighty percent of its annual revenues on subsidies, it places itself in a very vulnerable position should oil prices fall.

Many Iranian politicians including the speaker of parliament, Gholam Ali Haddad-Adel, have warned Ahmadinejad to raise oil prices and cut subsidies in order to prevent an economic disaster.

Such calls made against the administration are a good sign. Critics of Ahmadinejad are reported as saying that the administration`s unwillingness to cut subsidies are a political scheme in which Ahmadinejad is using in order to gain more votes in the upcoming election.

As Tom Friedman pointed out, the downfall of the Soviet Union was not Ronald Reagen`s tough demands, but rather a period of high oil prices followed by a steep drop in oil prices. This event caused the Soviet Union to become a more open and free society, through its policies of Perestroika and Glasnost in an attempt to appease internal dissent. The link between petro-dollars and free societies is an inverse relationship. The more wealthy states become as a result of their oil revenues, ultimately lead to the contribution of fewer liberties and freedoms for their people.

Should Ahmadinejad fail to restructure his country`s economy, and abandon his reliance on government subsidies to win over support, we might have the opportunity to witness a regime change without the use of foreign force.