Iran pours oil fund billions into wooing disaffected youth

Iran's new populist conservative government has launched its first term with an ambitious round of social spending, led by a $1.3bn (£720m) "love fund" directed at the millions of low-income young couples currently unable to marry.

The hardline President Mahmoud Ahmadinejad, who won elections in June with a pledge to redistribute the earnings of the world's fourth-biggest crude oil producer, has immediately set about wooing the two-thirds of the population under 30.

The first giveaway is the "Reza love fund" named after a Shia imam whose shrine is in eastern Iran. Iranian young people often complain they cannot afford to get married because of Iran's economic woes. They are living with their parents longer than ever before.

"The love fund is a realisation of the new government's slogan - taking oil money to the tables of the people," Vice-President Farhad Rahbar told state television. The money for the bill will come from National Iranian Oil Company income and non-government donations.

Young Iranians bemoan the prohibitive cost of dowries and wedding dresses, the expense of feasts and other costs associated with traditional nuptials. Middle-class families will often spend up to £7,000 on a wedding, a cost usually borne by the groom's family.

"I can't afford to get married and I think one should try to marry by 24," said Mehdi, a 22-year-old selling steamed sweetcorn outside a grocery shop in Tehran. "The plans to help us sound really good but I'll wait to see if they are carried out."

It is not the first time a government has tried to redress the problem. Universities stage annual mass weddings for students who cannot afford their own. They often involve gifts of household appliances donated by state and religious organisations, but critics say this attracts charlatans who sign up to marry every year.

Dowries are also a problem, with gifts of hundreds of gold pieces promised to the wife. These have become associated with domestic abuse as husbands beat wives who demand the payment of dowry promises that cannot be fulfilled. A recent proposal to set a legal cap on dowry size was dismissed as unworkable.

The new fund will be distributed at a provincial level by local boards of trustees. They will decide how much money should be allocated to hopeful couples. The government has not yet explained how it will make the cash available but previous administrations have often tried to distribute funds through low-interest loans.

"I didn't study for 17 years to do this. I can't marry on this salary," said Jamshid, a 25-year-old graduate selling fruit from a stall. "The government can solve all our problems if they set their minds to it. All they need to do is give us loans for marriage and to buy a house."

The plan is very much in line with the new President's agenda. He focused on social justice in his election campaign and fought for the youth vote with promises of greater public employment and financial help - instead of appealing to the young's desire for greater social freedom.

Expectations of the new President are very high, but he has already run into difficulties after nominating cabinet choices earlier this month. Four of his choices - including the key post of oil minister - have been turned down by hardline conservatives in the parliament, a group that supported his presidency. Analysts regard the muscle-flexing as evidence of a struggle for power between conservative factions.

The love fund cuts right into differences between Iranian political views. More westernised economists say Iran must cut current spending from oil revenues, which they say contributes to inflation and drives high levels of imports. But populist politicians, harking back to more revolutionary principles, say oil money should be distributed among the poor.