We have spoken to economist Saeed Leilaz about the recent open letter to Ahmadinejad, in which 150 Majlis deputies criticized the president’s handling of the economy. Leilaz believes that Iran is currently “experiencing its darkest times with rent-seeking in the past 27 years.”

Rooz (R ): What is your opinion about the letter of 150 Majlis deputies to Mr. Ahmadinejad?

Saeed Leilaz (SL): I think that three factors have contributed to the recent attacks on Mr. Ahmadinejad from all fronts. The first factor is the heavy defeat of Ahmadinejad’s supporters in the most recent elections. The second is the passage of the Security Council resolution against Iran. Public opinion and various political factions view Mr. Ahmadinejad as being responsible for this resolution. And the third factor is the worsening of the economic crisis, which inevitably stirs up social instability. A large portion of the economic turn for the worse is due to Ahmadinejad’s policies and management style. These three factors have prompted many to publicly criticize Ahmadinejad and attempt to distance themselves from the administration. The administration has increased government expenditure so much that we will face an enormous budget deficit in the coming year. This is reminiscent of Iran’s situation in 1977. In 1977, Iran will face many similarities with 1997: following a long, 7-8 year period of high oil prices, the country faced a deep economic crises, which ultimately led to the disintegration of the government. The same conditions are beginning to take a grip on the country again. This is why Majlis deputies and prominent political figures are trying to distance themselves from Ahmadinejad.

R: Mr. Ahmadinejad has promised to control inflation by next year. How serious is that promise?

SL: There is absolutely no basis for accomplishing this. If Mr. Ahmadinejad really wants to control inflation he has to first control the budget deficit and then curb government expenditure, so that there would be no need for taking money out of the foreign reserves account. Not only do I not see a prospect for lowering inflation in the coming year, but I actually envision a serious increase in the rate because of the increase in the money supply.

R: What about Ahmadinejad’s promise to bring oil revenues to people’s tables?

SL: Right now we have 15 percent inflation; but the inflation rate should actually be 30 percent. Oil revenues cover the difference. But the government has failed to do anything about income inequality, despite its high levels of expenditure. The lower classes do not have access to the banking system to use low-interest, zero-down loans. So, certain privileged groups reap the benefits of the rents that the administration is pumping into the economy. I don’t really think anyone else could have created such vast crises in the country’s social and economic situation in such a short time.