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US/IRAN: Ahmadinejad Feels Economic Heat

Analysis by Omid Memarian*

BERKELEY, California, Jan 22 2007 (IPS) - The arrests by a U.S. military unit of six Iranians in Erbil, Iraq and several others in Baghdad earlier this month indicate the deployment of a new strategy against Iran&#39s hardliner government.

The arrests were ostensibly aimed at members of the Revolutionary Guard (RG), close allies of Iranian President Mahmoud Ahmadinejad and a group that has become very powerful both politically and economically since the June 2004 presidential election.

Iranian authorities claim the detainees are diplomats, and have formally protested the detentions.

Since coming to power, Ahmadinejad, who hails from an intelligence and military background, has involved the RG in a series of billion-dollar economic contracts with various government departments, including the oil ministry. However, it now seems that the honeymoon period of the RG and the government is coming to an end.

Just a few weeks ago, the United Nations Security Council published the names of 11 entities and 12 individuals involved in nuclear and ballistic missile programmes. Most of the entities and/or companies on the list are affiliated with the RG. Chief among them are three high commanders of Iran&#39s Revolutionary Guard Corps: Maj. Gen. Yahya Rahim Safavi, Gen. Hosein Salimi, commander of the Air Force, and Ahmad Vahid Dastjerdi, head of the Aerospace Industries Organisation (AIO). These individuals now have travel restrictions abroad. Moreover, in early January, the U.S. announced sanctions against the Bank of Sepah, one of the country&#39s oldest commercial banks, in order to further restrict Tehran&#39s financial maneuverability. The move is intended to freeze the assets of "proliferators of weapons of mass destruction" and their supporters, following mounting fears in the U.S. administration that Iran&#39s state banks are being used as a cover for financing missile and nuclear projects.

These sanctions are making it essentially impossible for the conservative president to fulfill his populist promises. He is increasingly under pressure at home and abroad, as he faces both international isolation and a domestic crisis simultaneously.

At the same time, the traditional conservatives and their natural allies, the bazarries, the country&#39s small merchant class who control much of the Iranian economy, are increasingly alarmed about Ahmadinejad’s policies. The influential head of Tehran&#39s bazaar guilds, Ahmad Karimi, recently stated that economics is a science and those who have neglected its basic principals – meaning the Ahmadinejad administration – can no longer evade responsibility by blaming others for their mismanagement.

Iran&#39s influential Friday prayer leaders, most of whom are conservative, have also heaped contempt on the president for his economic policies. The mainstream political analyst Amir Mohebbian, in an interview with Roozonline daily, stated that the conservative faction can no longer afford to conceal its widening internal schisms – implying that the time for compromise with the militant faction has passed.

While he was strengthening his ties with the RG and intelligence body of the government, Ahmadinejad kept his distance from the conservative parliament. Since the adoption of the Security Council resolution against Iran on Dec. 23, and the significant U.S. pressure on the RG, the Parliament has been more critical of the president and his cabinet.

Now, more than 50 members of parliament have decided to summon Ahmadinejad to explain his policies, many of which have resulted in uncontrollable inflation and economic crisis.

Not only are the MPs critical of the president&#39s failure to fulfill his promises, such as redistributing the country&#39s oil wealth to the masses, but even Kayhan, the most conservative daily in Tehran, is subtly alluding to errors in Ahmadinejad&#39s policies.

"Now as the ninth elected government (since the inception of the Islamic Republic of Iran) is ending the second year of its four-year tenure, people are anxiously awaiting signs of improvement in living conditions – to no avail. High prices are choking the general public. Under the circumstances, the least the government can do is to relieve the high cost of living," Kayhan said in a recent editorial.

"The government should deeply ponder the fact that people will not continue to support them, and will constantly be judging the government&#39s actions rather than blindly giving their approval," the paper said. Taking a jab at Ahmadinejad&#39s claims of "divine inspiration", it added, "No organisation, including the government, should conceal its actions under the auspices of holiness and not accept opposition."

Jomhoury Eslami, another conservative daily in Tehran that is traditionally close to Supreme Leader Ayatollah Khamenei, has joined others in reminding the president of mounting popular frustration over his economic policies.

"People want improvements in the quality of their life, specifically a reduction in cost of living, or at least a stop to the constant rise in living expenses. Otherwise, they will lose whatever faith they have left in the government," Eslami said.

"The government must not turn a deaf ear to its advisors, using the excuse that it is directly in touch with the people. Whether it wants to or not, the government needs a series of non-governmental advisors to support its actions," the paper argued.

Ahmadinejad&#39s miscalculations have put him in a tenuous situation. His supporters won a very small percentage of votes in last December&#39s city council elections. The same month, the president&#39s visit to Amir Kabir University provoked a display of anger by students, with some tearing up and burning the president&#39s picture, while chanting "Death to the Dictator".

Iran&#39s hardliner president faces regional issues as well. Over the last two years, Ahmadinejad had counted on Washington&#39s willingness to negotiate since it needed Iran&#39s help in Iraq. He tried to use his influence with Hezbollah in Lebanon, Hamas in Palestine and Shiite groups in Iraq. However, these efforts have been futile because Hamas has been weakened since last September&#39s 34-day war with Israel, Mahmoud Abbas is meeting Israeli Prime Minister Ehud Olmert and U.S. Secretary of State Condoleezza Rice in a couple of months, and the U.S. has tried to encourage a coalition between Egypt, Jordan, Saudi Arabia and other Persian Gulf states to solve Iraq&#39s security crisis.

In light of these factors, Ahmadinejad&#39s claim that Iran can easily weather U.N. sanctions may be foolhardy. Compared to six months ago, Iran&#39s position has weakened dramatically. The provocative arrest of the five Iranians in Erbil shows that the U.S. is getting ready for a new order in the region, and harsh rhetoric on both sides may lead to a possible war.

Iranians all over the world have expressed their objection to any kind of military attack on Iran; the greatest fear is that if the U.S. attacks Iran, the hardliners will have even more ammunition to suppress their critics and opponents.

If the U.S. attacks Iran, the government will almost certainly seize the opportunity to rally the Iranian people behind the flag and crush the remnants of Iran&#39s civil society. With the U.S. more unpopular than ever in the Middle East, and especially in Iran – where the Central Intelligence Agency instigated a coup against the country&#39s most popular government in 1953 – together with major failures in Iraq and Afghanistan, many believe that military force would only strangle democracy in a society that is already transforming.

*Omid Memarian is an Iranian journalist and civil society activist. He has won several awards, including Human Rights Watch&#39s highest honour in 2005, the Human Rights Defender Award.