Iran's top legislative body has approved a controversial plan to phase out energy and food subsidies, as major powers prepare to discuss new sanctions against the country in New York tomorrow.
The Guardian Council's final approval of the plan, which would make Iran less vulnerable to sanctions on fuel imports, followed a compromise agreement reached last week between Mahmoud Ahmadinejad, the president of Iran, and the parliament over control of the money the state stands to save.
Mr Ahmadinejad hopes to save as much as US$100 billion (Dh367.35bn) a year by eliminating subsidies on petrol and other oil products, gas, electricity, water, food, health and education.
He had wanted the government left free to spend the money as it pleased but in November, parliament passed an amendment linking subsidy cuts to the budget.
Mr Ahmadinejad threatened this month to kill the plan over the dispute. Parliament refused to allow the bill to be withdrawn and sent it to the Guardian Council for ratification.
"The Guardian Council approved it in its last session," said Abbas Ali Kadkhodai, a council spokesman. "The Guardian Council studied the amended bill, which was sent by parliament, and found no contradiction with Sharia law and the constitution."
Iran's official English-language Press TV said the council had approved "a targeted subsidies legislation aimed at gradually cutting the government's energy and food financial supports".
"The economic reform plan has won an approval from the 243-seat parliament, with 134 lawmakers allowing the government to establish a reform subsidy organisation to enforce the plan," it added.
Tehran estimates it could save up to 30 per cent of Iran's annual budget by lifting subsidies on fuel and some food items, the news station reported.
Under the compromise reached last week, a government body would be established to receive and spend the savings without being required to provide details of its operations. The money, however, would be included in Iran's budget.
The amended plan calls for Tehran to lift subsidies by stages over five years ending in March 2015. State-mandated prices for petrol, kerosene, liquid petroleum gas, gas oil and other oil derivatives are supposed to reach no less than 90 per cent of Gulf prices by the end of the period.
The government proposes to distribute cash to poor Iranian households to compensate for higher energy and food costs. State media said the government would open bank accounts for 36 million people to transfer the payments.
But critics including Mirhossein Mousavi, the Iranian opposition leader, argue that removing subsidies will still hurt ordinary Iranians by stoking inflation. That stood at about 15 per cent two months ago, Iran's central bank said.
Massoud Mirkazemi, the oil minister, has blamed Iran's lack of self-sufficiency in fuels including petrol and gas on wasteful energy consumption encouraged by subsidies.
Iran, which has the world's second-biggest gas reserves, yesterday agreed to import up to 425 million cubic feet per day of gas from Azerbaijan between now and the end of March, and is reportedly working on a longer-term gas deal with its neighbour. Last week, Mr Ahmadinejad inaugurated a new pipeline to import gas from Turkmenistan.
Iran's national oil company is building new refining capacity, but for the next few years OPEC's second-biggest oil exporter would be vulnerable to international sanctions on petrol imports unless it finds ways to conserve fuel.
Iran's fuel prices are among the lowest in the world, but Tehran rations subsidised petrol supplies.
The introduction of fuel rationing in 2007 provoked riots, which has left some politicians concerned about further civil unrest related to the subsidies bill.
In its worst internal crisis in 30 years, Iran has been rocked by anti-government protests since last June, when Mr Ahmadinejad was given a second term as president amid opposition allegations of electoral fraud.
After his re-election, Tehran has repeatedly rebuffed western overtures aimed at resolving the long-running international spat over its nuclear programme. That has led to the imminent threat of further sanctions.
The five permanent members of the UN Security Council will meet in New York tomorrow to discuss the options.
@Email:tcarlisle@thenational.ae
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
Five famous companies founded by teens
There are numerous success stories of teen businesses that were created in college dorm rooms and other modest circumstances. Below are some of the most recognisable names in the industry:
- Facebook: Mark Zuckerberg and his friends started Facebook when he was a 19-year-old Harvard undergraduate.
- Dell: When Michael Dell was an undergraduate student at Texas University in 1984, he started upgrading computers for profit. He starting working full-time on his business when he was 19. Eventually, his company became the Dell Computer Corporation and then Dell Inc.
- Subway: Fred DeLuca opened the first Subway restaurant when he was 17. In 1965, Mr DeLuca needed extra money for college, so he decided to open his own business. Peter Buck, a family friend, lent him $1,000 and together, they opened Pete’s Super Submarines. A few years later, the company was rebranded and called Subway.
- Mashable: In 2005, Pete Cashmore created Mashable in Scotland when he was a teenager. The site was then a technology blog. Over the next few decades, Mr Cashmore has turned Mashable into a global media company.
- Oculus VR: Palmer Luckey founded Oculus VR in June 2012, when he was 19. In August that year, Oculus launched its Kickstarter campaign and raised more than $1 million in three days. Facebook bought Oculus for $2 billion two years later.
MATCH INFO
Who: UAE v USA
What: first T20 international
When: Friday, 2pm
Where: ICC Academy in Dubai
The specs
Engine: Four electric motors, one at each wheel
Power: 579hp
Torque: 859Nm
Transmission: Single-speed automatic
Price: From Dh825,900
On sale: Now
The specs: Macan Turbo
Engine: Dual synchronous electric motors
Power: 639hp
Torque: 1,130Nm
Transmission: Single-speed automatic
Touring range: 591km
Price: From Dh412,500
On sale: Deliveries start in October
PROFILE OF HALAN
Started: November 2017
Founders: Mounir Nakhla, Ahmed Mohsen and Mohamed Aboulnaga
Based: Cairo, Egypt
Sector: transport and logistics
Size: 150 employees
Investment: approximately $8 million
Investors include: Singapore’s Battery Road Digital Holdings, Egypt’s Algebra Ventures, Uber co-founder and former CTO Oscar Salazar
Key developments in maritime dispute
2000: Israel withdraws from Lebanon after nearly 30 years without an officially demarcated border. The UN establishes the Blue Line to act as the frontier.
2007: Lebanon and Cyprus define their respective exclusive economic zones to facilitate oil and gas exploration. Israel uses this to define its EEZ with Cyprus
2011: Lebanon disputes Israeli-proposed line and submits documents to UN showing different EEZ. Cyprus offers to mediate without much progress.
2018: Lebanon signs first offshore oil and gas licencing deal with consortium of France’s Total, Italy’s Eni and Russia’s Novatek.
2018-2019: US seeks to mediate between Israel and Lebanon to prevent clashes over oil and gas resources.
Citizenship-by-investment programmes
United Kingdom
The UK offers three programmes for residency. The UK Overseas Business Representative Visa lets you open an overseas branch office of your existing company in the country at no extra investment. For the UK Tier 1 Innovator Visa, you are required to invest £50,000 (Dh238,000) into a business. You can also get a UK Tier 1 Investor Visa if you invest £2 million, £5m or £10m (the higher the investment, the sooner you obtain your permanent residency).
All UK residency visas get approved in 90 to 120 days and are valid for 3 years. After 3 years, the applicant can apply for extension of another 2 years. Once they have lived in the UK for a minimum of 6 months every year, they are eligible to apply for permanent residency (called Indefinite Leave to Remain). After one year of ILR, the applicant can apply for UK passport.
The Caribbean
Depending on the country, the investment amount starts from $100,000 (Dh367,250) and can go up to $400,000 in real estate. From the date of purchase, it will take between four to five months to receive a passport.
Portugal
The investment amount ranges from €350,000 to €500,000 (Dh1.5m to Dh2.16m) in real estate. From the date of purchase, it will take a maximum of six months to receive a Golden Visa. Applicants can apply for permanent residency after five years and Portuguese citizenship after six years.
“Among European countries with residency programmes, Portugal has been the most popular because it offers the most cost-effective programme to eventually acquire citizenship of the European Union without ever residing in Portugal,” states Veronica Cotdemiey of Citizenship Invest.
Greece
The real estate investment threshold to acquire residency for Greece is €250,000, making it the cheapest real estate residency visa scheme in Europe. You can apply for residency in four months and citizenship after seven years.
Spain
The real estate investment threshold to acquire residency for Spain is €500,000. You can apply for permanent residency after five years and citizenship after 10 years. It is not necessary to live in Spain to retain and renew the residency visa permit.
Cyprus
Cyprus offers the quickest route to citizenship of a European country in only six months. An investment of €2m in real estate is required, making it the highest priced programme in Europe.
Malta
The Malta citizenship by investment programme is lengthy and investors are required to contribute sums as donations to the Maltese government. The applicant must either contribute at least €650,000 to the National Development & Social Fund. Spouses and children are required to contribute €25,000; unmarried children between 18 and 25 and dependent parents must contribute €50,000 each.
The second step is to make an investment in property of at least €350,000 or enter a property rental contract for at least €16,000 per annum for five years. The third step is to invest at least €150,000 in bonds or shares approved by the Maltese government to be kept for at least five years.
Candidates must commit to a minimum physical presence in Malta before citizenship is granted. While you get residency in two months, you can apply for citizenship after a year.
Egypt
A one-year residency permit can be bought if you purchase property in Egypt worth $100,000. A three-year residency is available for those who invest $200,000 in property, and five years for those who purchase property worth $400,000.
Source: Citizenship Invest and Aqua Properties
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
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