Economists attack Iran policies

Fifty-seven Iranian economists have launched a scathing attack on President Mahmoud Ahmadinejad.

They have accused his government of ignoring the basics of economics.

The university professors say mismanagement is inflicting a huge cost on the economy, the brunt of which will be borne by people with modest means.

This comes as the price of housing has almost doubled in the last year and food is getting more expensive by the week in Iran.

In an open letter to the media, the economists warned that the government of Mr Ahmadinejad had been making hasty and unscientific decisions, and that if this continued Iran would be pushed into a complex economic crisis.

They say instead of analysing the situation, the government just argues official statistics are wrong, and presents its own questionable figures to say the economy is prospering.

The letter says there is been an unprecedented injection of liquidity into the economy, some $80bn (£40.5bn) of oil money in the last two years.

But it says pumping cash into the economy just delays the problems and makes them worse in the end.

Spiralling inflation

Although the government says it has created two million jobs, the economists say all it did was give loans to start small business and that too, done by diverting funds from other areas, resulted in job losses.

Inflation is said to be at unprecedented levels and that is visible in the shops where many housewives can no longer afford meat or fruit.

Mr Ahmadinejad's frequent trips to the provinces are criticised too - for promoting questionable projects not based on scientific, social or economic principles.

And the economists add that Iran's worsening international relations are imposing a huge cost on its economy which the next generation will pay for.

They say the new officials in government need to understand that economics has rules.

At no point does the letter mention international sanctions or foreign banking restrictions as responsible for Iran's economic woes.

Instead the authors pin the blame squarely on domestic mismanagement.

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