Iran president rejigs budget body, gets freer hand

TEHRAN, July 11 (Reuters) Iran's president has brought the work of a budget planning body directly under his control, a move analysts said today gives him a freer hand to implement populist policies blamed for driving up prices.

President Mahmoud Ahmadinejad came to power in 2005 vowing to spread out Iran's oil wealth more fairly but economists say he has been spending windfall oil earnings without regard for the inflationary impact.

The president has dismissed the criticism and has in the past blamed the media for exaggerating the price hikes.

In a decision taken on Monday, the Management and Planning Organisation, a body charged with setting long-term nationwide budget allocations, was restructured and its work put under the control of the presidency, IRNA news agency reported.

''This organisation should harmonise work together and put everything in the same direction but because it was loaded with work, it couldn't carry out its duties very well,'' Ahmadinejad was quoted as saying by another news agency, ISNA.

Government spokesman Gholamhossein Elham told reporters when discussing the initiative today: ''The president needs some tools ... and he should make them efficient for his work.'' Although the MPO was a state body whose head was appointed by the president, analysts said many of its members were technocrats, making it a relatively independent organisation able to put some checks on executive spending plans.

'BYPASS ADVICE' ''The organisation was dissolved so there would no longer be any planning ... or maybe the organisation was dissolved because we don't need management and planning,'' Behnaz Sadeghpour wrote in the reformist Sharq daily, criticising the move.

Ahmadinejad had already eroded the organisation's powers last year when provincial offices of the MPO were put under the control of government-appointed governors. That move was also criticised, even by some of his supporters.

The latest move is the ''final nail in the coffin'' of the MPO, said an Iranian political analyst.

''(The MPO) made the process of decision-making a bit more cumbersome. But this way the president will be able to bypass the advice of experts and shorten the length of time for decision-making,'' said the analyst, who asked not to be named.

Analysts say the economy -- which has been missing growth targets -- could prove a key factor in parliamentary elections in March. Ordinary Iranians are already grumbling about rising prices, which official figures put at around 17 percent.

Ahmadinejad is still well-received at regular rallies around the country but opposition politicians say his popularity depends on his promises of largesse. His supporters say he has built popularity by turning up in provinces that were long neglected by central government.

But public criticism of his economic management has been rising.

Some 57 economists wrote an open letter in June saying his plans were undermining the social justice he was aiming for, because inflation hurts the poor most.

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