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Iran president ends monthly cash payment to 90 percent of citizens

| Saturday, April 12, 2014, 3:15 p.m.
Iranian President Hassan Rouhani campaigned on the promise of improvements to the nation’s beleaguered economy.

TEHRAN — In a bid to cut spending, the Iranian government has ended a cash assistance program and introduced a celebrity-driven campaign to convince millions of Iranians that they do not need the help.

It's unlikely to be a popular message. As of last month, more than 90 percent of Iranians were receiving monthly direct deposits from the government of about $15 — a sum that many, though certainly not all, depended on to buy staples whose prices have soared in recent years.

The payments began in 2010 by then-President Mahmoud Ahmadinejad as part of a program to reduce state subsidies on utilities and food. But they ended up costing the government billions of dollars and, many economists say, contributing to Iran's skyrocketing inflation rate.

On Friday, the government of President Hassan Rouhani sent the final payment to Iranians' bank accounts, and it is taking applications to determine how many people really need the help.

To keep that number as low as possible, the government is airing radio and television ads in which professional soccer players and actors say they will not enroll. Most cabinet ministers have urged their staffs not to sign up, and one of the country's highest-ranking Shiite clerics issued a fatwa Thursday deeming the collection of payments by those who are not poor “religiously problematic.”

Deciding who truly needs the help — and slimming such a large assistance program in general — will be a key test for Rouhani, who was elected in June largely based on his promise of a brighter economic future for all Iranians. The government has not said what the cutoffs for eligibility will be or when the payments will resume.

Ahmadinejad's government originally intended to deliver the deposits only to the needy. But analysts say a combination of limited income data and political turmoil after Ahmadinejad's disputed 2009 election led him to view the aid as an opportunity to placate a restless society.

The program is now generally accepted as an important first step to wean the public off of overly subsidized utilities, but at a very high cost.

The head of the government agency that oversees the deposits said this week that in the 38 months since the program began, the equivalent of more than $50 billion had been paid to Iranian bank accounts.

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