Tehran begins to feel the pain of finance crisis

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By Hadi Nili

TEHRAN

When the U.S. stock market plunged and venerable New York investment houses fell, some Iranian leaders said the Bush administration was paying the price for its aggressive, unilateral ways.

As the crisis mushroomed into a worldwide phenomenon, officials here are no longer so smug.

Former President Ali Akbar Hashemi Rafsanjani, still one of Iran's most prominent and influential political figures, told those attending Friday prayers Oct. 24 that Iran should not gloat because one of the major consequences of the crisis has been tumbling oil prices that are hurting the Iranian economy.

"We should not think the financial crisis that hit the world is in our interest," Mr. Rafsanjani said in comments broadcast by Iran's state-run IRIB TV. "The first negative consequence of the wave is the fall in oil prices. The drop in oil causes major damage to us."

Iran has become increasingly dependent on oil earnings since the 2005 election of President Mahmoud Ahmadinejad. It is the world's fourth-largest oil producer and second biggest exporter in the Organization of the Petroleum Exporting Countries (OPEC). Since July, however, the price of oil has dropped by half.

The consequences could be serious for a government facing international sanctions because of its rejection of demands that it suspend a nuclear program that it insists is peaceful but some argue could give Iran the ability to make atomic weapons. Economic difficulties could also give the next U.S. administration new leverage to negotiate with Iran.

Only a few weeks ago, when oil was still above $100 a barrel, the attitude in Tehran was blase, even triumphant.

Mr. Ahmadinejad told reporters when he visited New York in September, "We really do not face serious problems. What you are facing [in the United States] is far harsher than in Iran."

A clerical supporter of the president, Ayatollah Ahmad Jannati, said last month that the financial meltdown was a "punishment from God" and that Iranians were happy that the U.S. economy is in crisis.