1.21.2007

Iranians Don't Like Their President

The Telegraph ran a story today that exposes the political/economic rift in Iran that should be a major point of discussion in America. Basically, the Iranian Middle class is disappearing due to the weak performance of the economy.
Ahmadinejad came to power in 2005 promising to use oil money to cut the gap between rich and poor. If he has succeeded, it is only because both groups are now struggling to make ends meet.

Had he nailed the economics, his critics might have had more stomach for his political grandstanding and nuclear brinkmanship. Instead, while the Iranians are at the Americans' throats throughout the region, internal inflation and unemployment are running at 30 per cent and rents and property prices are 40 per cent higher than six months ago. Even former supporters are questioning whether turning the entire United Nations Security Council against Iran was a bright idea.

Last week, 150 parliamentarians — just over half of Iran's 290 MPs — took the extraordinary step of signing a letter blaming Ahmadinejad for the country's woes and accusing him of planning to squander the country's oil earnings, which account for about 80 per cent of its revenues, in next year's budget. "The government's efforts must be focused on decreasing spending and cutting its dependence on oil revenues," the MPs wrote.

It was a sure sign that what limited backing Ahmadinejad had from Iran's supreme leader, Grand Ayatollah Ali Khamenei, had evaporated. The hard-line conservative newspaper Jomhouri Islami, a reliable indicator of Khamenei's thinking, spelled it out. "Speak about the nuclear issue only during important national occasions, stop provoking aggressor powers like the United States and concentrate more on the daily needs of the people," it wrote.

Iran is a complex nation, and it's a mistake to believe that Ahmadinejad speaks for the entire public. The Iranian middle class knows that their economy cannot be sustained with the petroleum revenues forever, and the crisis is coming to a head. Unfortunately, they need to find alternative fuel sources in order to maintain the production quotas (and to reuse some of the gas in effort to get the most from their declining fields).

This is a critical period in the diplomatic relationship between the United States and Iran. They either want nuclear power plants or they want to expand their territory and grab some of Iraq's oil. There's not a lot of room for us to maneuver, and that's why this requires a delicate hand. I'm can't trust Condi or Cheney to handle this situation effectively, and that's why I suspect that conflict in Iran is inevitable.

Whenever I hear the Administration's saber rattling with Iran, I'm reminded of a Drow quotation: Keep your friends within sword-reach, keep your enemies within knife-reach. The elder Bush understood this. Younger Bush, well I don't think he understands very much at all.

For more information regarding Iran's oil economy and its effect on the entire Middle East, check out this well-researched post at The Oil Drum. The near-term problem isn't necessarily Iran's nuclear weapon ambitions, it's the emerging Shi'a Crescent in the entire region that will likely create conflict and petroleum instability over the next few years.

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