Friday, 25 Apr 2008
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opinion article

April 25, 2008

The Most Political Issue in Iran

Ahmad Zeidabadi
Ahmad Zeidabadi

 

 

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.‎



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