The Most Political Issue in Iran
Ahmad Zeidabadi - 2008.04.25

One does not have to be an economist to understand the upcoming economic problems of Iran and their macro causes. It is clear that the country’s economy suffers from a series of deep and structural problems which have historical causes. Unfortunately none of the governments since the 1979 revolution have had the courage or power to surgically remove the fundamental issues faces the economy. In addition to the historical issues, political instability, bad investment climate, continuous corruption and the administrative structures of some of the more sensitive bureaucracies are also causes for the country’s sick economy.
International economic sanctions, particularly the UN Security Council resolutions are also among reasons that have pushed the economy to its brink, despite the windfall petro-dollar revenues of recent times.
And finally, Ahmadinejad’s economic policies which have led to the complete unleashing of liquidity have added to the economic woes and increased the pace of inflation and price hikes.
An impartial look at Iran’s ailing economy must consider all the above issues but the politicization of the country’s economy – which has been caused by the conservative wing of the regime – has forced the various political factions in the country to recognize only those factors that project its goals and views.
Critics of Mr. Ahmadinejad inside the administration are gradually moving in the direction of naming the president as the chief cause of the current economies problems. While the president is responsible for the state of the economy by virtue of being the head of the cabinet and the executive branch, it would be unfair to negate the role of international sanctions on the state of affairs. Undoubtedly the president is responsible for the current situation also because he has been publicly dismissing the UN Security Council resolutions as worthless pieces of paper that have no impact on the country’s economy.
It must be borne in mind that Mr. Ahmadinejad is not someone who will acknowledge his erroneous economic policies or accept the consequences of serious international economic sanctions. He tries to dismiss the issue altogether for a while and take an optimistic view of the future but when problems such as inflation and price hikes become so overwhelmingly apparent and out of the closet that they cannot be denied or ignored, then what does he do?
He does exactly what he did last Wednesday in Qom. He blames the problems on his domestic rivals so that he can deflect public criticism while at the same time settle scores with his opponents. But his opponents do not remain passive and in their defense expose his performance and that of his close associates.
So for a while, the verbal battle of accusations heightens, it leads the way to actual settlements in where different government agencies step into the playground and engage in making formal accusations. In this game, some investors and capitalists may even lose their investments while others leave the country, along with their wealth, fearing possible losses. This of course leads to further economic instability, a further drop in production, rise in unemployment and higher prices. This is the trend that the Iranian economy has taken because of politicization.
That the managing editor of such an influential newspaper as Keyhan, who carries three decades of experience, once again calls for the expropriation of the property of the wealthy and its redistribution among the needy as a solution to the economic woes of Iran, is indicative of the strange days that are ahead for the Iranian economy.
