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Ahmadinejad Sabotaging Iran's Economy

[Asia Times-Hong Kong] Spengler - Iran's economy is so damaged that it is impossible to tell how bad things are. Iranian dissidents put overall unemployment at 30% and youth unemployment at 50%. Government subsidies sustain a very large portion of the population; 42% of the non-agricultural population is employed by the Iranian state, compared with 17% in Pakistan. The present inflation rate of about 20%, driven by a 40% rate of monetary expansion, suggests that government resources are already exhausted. Governments resort to the printing press when they no longer can raise sufficient funds. Ahmadinejad last week reduced private and state bank lending rates to 12% from 14%, that is, 5-10 percentage points below the rate of inflation. If Ahmadinejad were in the pay of a hostile intelligence service, he could not have found a more effective way to sabotage Iran's economy by augmenting the incentives for capital flight.
2007-05-30 01:00:00
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