Wednesday, December 22, 2010

Iranian neoliberal economic reform

Naomi Klein's book, The Shock Doctrine, argues that unpopular neoliberal reforms have been pushed through in countries while citizens were in shock, reacting to disaster and upheavals.

It is implied that some man-made crises, such as the Falklands war, may have been created with the intention of being able to push through these unpopular reforms in their wake.

Iran recently introduced an austerity budget, slashing subsidies for fuel and bread.

Iran's government has slashed subsidies on food, doubling the cost of bread in order to ease pressure on an economy straining under international sanctions... Prices for subsidized fuel quadrupled on Sunday as part of a new economic plan ...

Iranian President Mahmoud Ahmadinejad vowed to end all subsidies by 2013. The pattern fits the thesis of Klein's book, as last year Iran cracked down on dissent, created an environment hostile to protests:

The cuts in subsidies are far more severe [than in 2007] but the response has been muted. Iran observers attribute it to a climate of fear following a government crackdown in the aftermath of the 2009 presidential election controversy.

If Klein's thesis applies, then Ahmadinejad deliberately has been stoking a crisis over Iranian nuclear capability in order to justify suppression of dissent, paving the way for neoliberal elimination of government subsidies.