Plan to pay cash subsidies is one of the most noteworthy projects of the government for economy.

Subsidies can be paid in cash based on a set of conditions. Direct payments are however more common both in developed and developing countries in view of its minimal impact on the pricing system. It also provides a free hand to target groups on ways of spending the money.
According to the International Labor Organization, in 2000, more than 80 percent of the population in industrial countries received cash subsidies whereas in Asian and African states, only 10 percent were entitled to such direct payments.
Among developing countries, only a handful pay less than one percent of their gross domestic product in cash subsidies. The reason for this could be limited state resources in these countries wherein governments are often cash-strapped and have to spend a large portion of their funds on current and general expenditures.
The current subsidy system has not proved very effective in Iran. The ever-increasing subsidies and inadequate distribution is often blamed for not only the failure of anti-poverty plans but also for dissipating huge cash and non-cash resources.
To promote social justice, as one of his main election slogans, President Mahmoud Ahmadinejad and his team are expected to channel subsidies to target groups which are the most vulnerable.
Experts say that the plan to pay cash subsidies is one of most noteworthy economic projects of the government. They believe that the success of the plan depends on taking all aspects into account.
According to those who are preparing the plan, energy subsidies would be deposited in the account of the benefactors in cash in the first phase of the project. And gradually, the rich will be left out of the energy subsidy plan.
In subsequent phases, the plan will include the subsidies for staple goods such as wheat and bread.
This initiative will constantly cover target groups (employees with fixed incomes, poor and low-income individuals). Making the subsidies target-oriented is an important project which was even discussed in the past governments and in previous five-year economic plans. However, it did not materialize.
A banking expert told Iran Daily that direct payment would produce positive results. Once implemented, it would minimize the activities of profiteers, Bijan Bidabad said.
Distributing subsidies in the form of commodities deprives the consumer of the right to choose, he pointed out. And maybe he/she does not need that commodity, he added.
The obstacle to paying subsidies in cash mostly pertains to identity documents or incomplete national codes. Even, some persons possess more than one identity document.
Policymakers have definitely anticipated cash subsidies for the low-income group. Usually, cash subsidies lead to growing demand in the society and increase the prices.
If the government pays the cash subsidies from tax revenues, cash subsidies would not trigger inflation, he opined.
Along with cash subsidies plan, the government should follow up economic adjustment policies. This means that while poor households are covered by cash subsidies plan, the time is appropriate to liberalize prices and reduce the general subsidies.
Also, chancellor of Allameh Tabatabaei University said that the effectiveness of the pl an depends on how much the government would pay to each household.
Mehdi Taqavi explained that if the money given to households is less than the subsidies paid in the past, it will be useful for them.
Currently, many households do not use the subsidized commodities, he said, adding therefore, direct payment would increase their purchasing power.
So, cash subsidies should be paid in accordance with their need to subsidized commodities and their purchasing power, the expert underlined.
The plan attaches importance to identifying the families in need of cash subsidies, Taqavi explained.
If the plan is implemented without any expert work and annulled after a short time, it will only impose extra costs on the government and society, he cautioned.

About 10,000 billion rials in shares of companies affiliated to Industrial Development and Renovation Organization (IDRO) will be ceded to the private sector in the year to March 2009, announced the head of the organization, Ahmad Qalehbani.
Speaking in a press conference attended by Iran Daily, he said that in line with the policy of implementing Article 44 of the Constitution, seeking large-scale privatization, 102 companies out of the total 130, affiliated to IDRO, will be privatized by next March. “Shares of the remaining 26 will gradually be handed over to the private sector,“ he noted.
The official noted that a limited number of shares of Iran Khodro and Saipa auto manufacturing companies will be offered in the Stock Exchange.
Qalehbani stated that identifying new areas for privatization is on IDRO’s agenda in the year to March, adding that investment in various industrial sectors including auto, tractor and ship manufacturing has gone up.
“More than 30 development and 30 new projects will become operational in Saipa and Iran Khodro companies by next March,“ he said.
The official noted that IDRO was given 61 provincial projects undertaken jointly by the private sector and the government, of which 16 will go into operation in the current year. Qalehbani said that IDRO will complete industrial projects of South Pars Phases 6, 7 and 8 while continuing those of phases 17 and 18.
He noted that 14 projects in the fields of advanced industries and high-tech will go on stream in the year to March 2009.

About 3.7 million people have so far registered for Mehr Housing Plan, disclosed housing and urban development minister.
Mohammad Saeedikia hoped that the land required for construction of housing units would be made available to applicants by March 2009, reported IRNA.
For implementing the plan to provide land on 99-year lease, he explained, about 10 million rials is to be paid by applicants for preparing the land and another 10 million to be given by the government in the form of banking facilities.
According to the minister, applicants should pay about 20 percent of the construction costs. In addition, about 140 million rials worth of housing loans will be granted to them, he added.
Ministry of Housing and Urban Development and Endowment Organization in February signed an agreement to expedite the implementation of housing policies and tap the potentials of Mehr Housing Cooperatives, IRIB reported.
Under the agreement, the Endowment Organization declared its readiness to cede lands which are not subject to litigations to real and legal investors for building houses. The organization announced that it will transfer such lands to housing cooperatives for rent to eligible clients. Investors will be the owner of the housing units after they rent them for at least five years.

A senior Iranian oil official said his state-owned company is considering the development of a major oilfield in OPEC member-state Angola.
“We have assessed many investment opportunities in Africa,“ Gholamreza Manouchehri, managing director of the Petropars Oil and Gas Company told Fars news agency, adding, “And next week we will examine the manner of participation.“
Political stability has increased the flow of foreign investment into oil-rich Angola, whose infrastructure was devastated by a 27-year civil war that ended in 2002.
Although buoyed by an oil-fuelled boom, its government is struggling to rebuild and raise living standards.
Iran is the world’s fourth-largest oil exporter and also holds the second largest gas reserves in the world after Russia.
Its daily oil output hit 4.203 million bpd last month, the highest level since the 1979 Islamic Revolution, according to Oil Minister Gholamhossein Nozari.

Iranian gas could be delivered to two export pipelines running to Europe: Nabucco and TAP.

Surging energy prices have spurred foreign interest in Iranian reserves.
Tehran has been pursuing a more energetic gas policy, indicating its readiness to cooperate with the European Union, which, eager to diversify its gas supplies, is increasingly willing to separate political from economic questions in ties with Iran.
As reported by Ria Novosti, Portugal has been in talks with Iran since 2006. Italy’s Edison is negotiating the supply of Iranian gas to Italy. In mid-March, the Swiss electricity group EGL signed a 25-year contract with National Iranian Gas Export Company on gas supplies worth $20 billion. Soon after that, Austria’s EconGas GmbH signed an agreement on gas deliveries from Iran beginning in 2013.
The Nabucco project, which Europe and the United States view as the main prong in the drive to diversify gas deliveries to the EU, was initially designed to pump gas from Iran’s Caspian coast to Europe, bypassing Russia.
Austrian energy concern OMV planned to develop the South Pars gas field in Iran, the largest in the world, for the Nabucco pipeline. However, it turned its focus to Azerbaijan with the deterioration of relations between Iran and the United States.
Azerbaijan, however, does not have enough gas for the pipeline, which needs at least 30 billion cu m per year to be profitable. The success of a Russian diplomatic offensive in the Balkans in late February seems finally to have buried the project. Russian officials signed agreements with Bulgaria and Serbia on building a rival pipeline, South Stream, to pump Central Asian gas to Europe.
Initiators of the Nabucco project have however continued to search for alternative sources, in particular in Iran.
Aware of its critical importance for Nabucco, Tehran has become more active in the gas market. However, Iran would not like Russia to view this as a challenge to its energy strategy in southern Europe.
Iran’s advance to the European gas market and its plans to develop gas reserves could well disturb the balance of interests on the market, which European consumers question anyway.
Coupled with US plans to develop Iraqi gas reserves, Iranian gas could provide the required supply for the Nabucco project. This may be hypothetical at the moment, but the mere existence of potential gas reserves for the pipeline may encourage Russia to step up the South Stream project.
Iran’s contract to deliver gas to Switzerland stipulates the early commissioning of the Trans-Adriatic Pipeline (TAP), a joint project between EGL and Norway’s StatoilHydro. In other words, Iranian gas could be delivered to two export pipelines running to Europe: Nabucco and TAP.
This can be interpreted as the struggle for the vast European gas market. It is true that Europe needs increasing amounts of gas, but it is also working hard and spending large sums in an effort to level off its energy balance, cut the share of hydrocarbons in it, and introduce energy-saving technologies. In 10 to 15 years, these efforts and expenses may lead to a drop in gas consumption.
Competition on the gas market will soon affect prices.
Meanwhile, Iran is playing on the EU’s desire to ease its dependence on Russia and save money. So far, Iran does not have enough gas to pose a serious threat to Gazprom’s position in Europe. On the other hand, signs of improvement in relations with Iran do not mean that the United States has no complaints about Iran. Likewise, Europe has no freedom of choice in the matter, because Washington insists that the Iran-Swiss gas supply contract be scrutinized. Berne and other European capitals surely know what this warning means.
Iran and Russia should probably not compete against each other but join hands in the gas market.

The dairy industry is facing numerous challenges and it is about time officials changed their attitude towards the sector.
Stating the above to IRNA, managing director of Iran’s Dairy Industries Company, Mahmoud Najafi, said the plan to stabilize prices have dealt a major blow to the dairy industry and if it continues, it could lead to the bankruptcy of the sector in the near future.
According to him, the policy has kept the prices of UF cheese, less than 4 percent low-fat yogurt and low-fat milk fixed since 2004 and this is despite the fact that prices of raw materials such as milk and wages have gone up since then.
“Almost 75 percent of all dairy products of the company fall under the category of pricing policy and many companies refuse to produce less than 4 percent low-fat yogurt as it is no longer economical,“ he added.

Iran’s Bank of Industry and Mines will host the 31st annual meeting of the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) in Tehran from April 28 to May 1, ISNA reported.
Over 70 delegates from ADFIAP member states and partners from 20 countries have now confirmed their participation in the meeting. More delegates are expected to confirm their attendance as the event draws closer.
The annual meetings consist of the Board meeting, the General Assembly meeting, the Delegate-Meets-Delegate session and the Conference Proper, as well as the ADFIAP Awards Night and the Fellowship Program.
One of the highlights of the three-day event, the Conference Proper, themed ’Innovative Development Finance: DFIs’ Response to the Needs of the Times’, will feature four sessions on different topics to be presented and discussed by experts.

A number of hydroelectric power plants with a total capacity of 6,500 megawatts are under construction nationwide, said Energy Minister Parviz Fatah.
He told MNA that the projects will become operational in 2010.
The minister noted that electricity is one of the basic elements of development, adding that Iran is not only self- sufficient in power plant construction but has also concluded a number of contracts on implementing projects in neighboring states.
He recalled that an agreement on constructing a 450-megawatt power plant was recently signed with Syria which is to commit 230 million euro for the project to be implemented by Iranian experts.
Recalling Iran’s needs to more hydroelectric power plants, he said that feasibility studies have been conducted on generating 25,000 megawatt from hydroelectric power plants in the country.

Mashhad International Exhibitions Organization plans to organize a display of leather, shoes and bag next month.
Announcing this on Tuesday, head of the organization said that those active in the leather, shoes and bag industry including businessmen, unions, cooperative companies, natural and synthetic leather factories will be represented in the First International Leather, Shoes and Bag Exhibition to be held for five days from May 26,
reported ISNA.
Seyed Mohammad Seyedi further said that so far 50 foreign and domestic companies have voiced their readiness and registered for participating in the exhibition.
“Different kinds of natural and artificial leather, machinery, leather garments, bags and leather handicrafts will be put on display at the event,“ he said.
According to Seyedi, four delegations from Pakistan, Tajikistan, Turkmenistan and Afghanistan will also visit the exhibition.