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Iran ends fuel and food subsidies -- and my easy access to saffron

On Dec. 19, prices for basics from bread to gasoline jumped after the Iranian government ended subsidies. How will this turmoil influence Iran's negotiating position over its nuclear program? And what about my Persian saffron for cooking?

By Clayton Jones / December 23, 2010

Iran's President Mahmoud Ahmadinejad delivers a speech in Istanbul, Turkey, on Dec. 23.

MUSTAFA OZER/AFP/Getty Images/Newscom

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An Iranian friend of mine living in America has been a good source for the most luxurious spice of all – Persian saffron.

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But no more.

A combination of economic sanctions on Iran over its nuclear program and Tehran's end to government subsidies on fuel and food has meant the easy export of inexpensive saffron will become more difficult. I’ll need to start cooking with less-tasty saffron from Spain or elsewhere.

But my food preferences hardly matter compared to the current events in Iran that may reshape the Middle East. The end of subsidies this week could be the most jarring political event there since street riots after the rigged 2009 elections.

The price of bread has tripled since Sunday. Truckers are on strike over fuel prices that have risen nearly twenty-fold. Security forces have fanned out in major cities to quell any protests. Longer term, a general hike in prices will speed up inflation, eroding incomes – as well as Iran’s negotiating power with the West over its nuclear ambitions.

The government could no longer afford the nearly $100 billion in subsidies, especially after a fourth round of United Nations sanctions were imposed in recent months. Gasoline has become scare, as Iran – despite being the fourth largest oil exporter – has seen fewer nations and companies willing to do business with it.

No wonder Iranian President Mahmoud Ahmadinejad visited Turkey this week in large part to find out if that neighbor might buck the sanctions and allow more trade.

Mr. Ahmadinejad’s own political fortunes might actually be helped by the end of subsidies. He’s taking credit for the government's cash payments of $20 to $150 a month now being given the poorest families to defray the higher costs of basics.

But the regime itself – especially the powerful mullahs above the president – will continue to lose whatever legitimacy they have left after the last election and after the killing of innocent protesters by security forces.

The few foreign journalists allowed to report in Iran are critical to letting the outside world know about the economic pressures on the regime. Iran plans to resume talks with the West at the end of January.

Will it be weaker or stronger? It depends on how Iranians cope with the skyrocketing prices for bread and energy.

Iran's turmoil has definitely weakened me. I’ll now be shopping for saffron, just not the best kind.

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