Iran opposition leaders slam subsidy cuts

An Iranian man shops at a grocery store in Tehran on December 19. Iran's opposition leaders have reportedly slammed the cut in government subsidies on energy and food products, warning that a "dark future" awaits the nation's economy.

AFP - Iran's opposition leaders have slammed the cut in government subsidies on energy and food products, warning that a "dark future" awaits the nation's economy, an opposition website reported Wednesday.

Opposition leaders Mir Hossein Mousavi and Mehdi Karroubi acknowledged the necessity of cutting subsidies, but criticised its timing and the ability of President Mahmoud Ahmadinejad's government to implement the sensitive plan.

"The country is faced with severe international sanctions, the economy is stagnating, unemployment of higher than 30 percent has spread across the country, and inflation is running wild," the website Sahamnews quoted the two leaders as saying during their meeting on Tuesday.

"Implementing the plan at this time is a burden whose pressure will be felt by the middle and lower classes" of society, it reported the pair as adding.

On Sunday, Ahmadinejad's government levied up to a five-fold hike in fuel prices as it started implementing its long-awaited economic overhaul.

The move has been welcomed by a large section of the parliament which had initially resisted it on grounds it would lead to further inflation.

Iranian "factories, which are failing to pay the average salary to workers, face closure every day," the website said, quoting the two opposition figures.

"The lack of security for investments and healthy competition... promises a dark future for the country's economy," it reported them as adding.

The two agreed that the plan in itself was a "fundamental project," but only if implemented "wisely and without any hype."

But "the situation is becoming worse as the government has no time to hear the opinion of experts on this issue."

The government plans to phase out over a five-year period subsidies on energy and food items which cost state coffers about 100 billion dollars a year, according to official estimates.

To offset the rising prices, the government has begun to pay part of the expected savings from subsidy removals in the form of direct aid to the people.