Tuesday, March 14, 2006

TEHRAN — Iran’s clerical and business establishments, deeply concerned by what they see as reckless spending and needlessly aggressive foreign policies, are increasingly turning against President Mahmoud Ahmadinejad.

Within this context, many see the president’s long-running confrontation with the United States and Europe over Tehran’s nuclear program as an attempt to demonize the West and distract the Iranian public from pressing domestic problems.

A relatively small group of extremists “at the top of the government around the president” are seeking to benefit from a crisis with the West, because “that way they will be able once again to blame the West for all of their problems,” said Mousa Ghaninejad, the editor of Iran’s best-selling economics daily newspaper, Dunya Al-Eqtisad.

Millions of low-income Iranians voted for the new president last year, motivated by his firm stand against corruption and pledges to give financial priority to their needs.

“His appeal was to those for whom class discrimination is important, and his simple lifestyle gave an air of credibility to his claims,” said Nasser Hadian, a political analyst at Tehran University who attended high school with Mr. Ahmadinejad.

Mr. Hadian predicted that senior Iranian clerics would continue to support Mr. Ahmadinejad — or at least not move against him — for about a year because of that popular support. But privately, he said, they feel he is isolating Iran internationally and putting its economy at risk.

Also at the back of their minds is the fear that his anti-corruption drive ultimately threatens their own considerable privileges.

Mr. Ghaninejad was one of 13 experts in economics who warned, in two petitions to the government just before Mr. Ahmadinejad was elected, that his populist, short-term policies would spell disaster for Iran in the long term.

“Now he’s throwing money at complex problems and just doesn’t care about the long term. He thinks he should help the poor today and leave everything else to the Hidden Imam,” the newspaper editor said, referring to a character whom Shi’ites believe will one day emerge to bring justice to the world.

The critics say Mr. Ahmadinejad’s budget, which has just been approved by parliament after prolonged wrangling, flouts economic doctrines sanctioned by the powerful Expediency Council, which is under the supervision of the supreme leader Ayatollah Ali Khamenei.

Iran’s long-term planning calls for vigorous efforts to reduce the size of government and to curb subsidies to state-owned entities, which account for an estimated 75 percent of the economy. But the Ahmadinejad budget boosts spending by 25 percent and envisions a 31 percent increase in spending on state enterprises.

The 2006 budget also calls on the government to use up to $40 billion of its foreign cash reserves — generated from oil sales — to meet the fiscal year’s spending needs, in spite of long-term plans calling for restraint.

The value of Tehran’s stock market had fallen by $10 billion under Mr. Ahmadinejad as of February, the Los Angeles Times reported. Other recent Western news reports say that the nation’s vibrant real-estate market has withered and that capital outflows are increasing.

Mr. Ahmadinejad’s spending has pushed the inflation rate to an estimated 13.5 percent, and several estimates say it could go as high as 30 percent this year.

Economic analysts note that inflation will be felt most acutely by the poor, undermining the president’s support among his most important constituency.

Parliament has challenged the president on other issues, most notably by rejecting three successive candidates for oil minister. Mr. Ahmadinejad declared angrily after the second rejection that “no other president has ever been subject to such negative propaganda and treatment.”

Mr. Ahmadinejad’s detractors say the broad coalition against him is attracting many of the regime’s powerful personalities and may include even the supreme leader himself, despite his superficial statements in support of the president.

They point to a recent decree by Ayatollah Khamenei giving the Expediency Council, headed by former President Akbar Hashemi Rafsanjani, oversight of the presidency.

The clerical establishment has close ties with the capitalist class and is said to be appalled at the rapid slide of the economy since Mr. Ahmadinejad’s inauguration. The clerics are also thought to be deeply apprehensive about the president’s aggressive foreign policy.

Mr. Ghaninejad said that by confronting Iran over its nuclear program, the West was in fact throwing a lifeline to Mr. Ahmadinejad.

“If they keep piling on the pressure, Ahmadinejad will become a national hero,” the newspaper editor said.

“Let the Iranians deal with him. If you leave him alone, he will become a bankrupt politician within a year. With greater pressure, only the extremists will benefit.”

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