Friday, September 26, 2008

While Iranian President Mahmoud Ahmadinejad basks in media attention during his annual visit to the United Nations, his countrymen are more worried about how they are going to pay their bills.

“Economic affairs are more important” than the president’s speeches and press conferences abroad, said Saeed Laylaz, a former deputy interior minister in the administration of Mr. Ahmadinejad´s predecessor, Mohammad Khatami. “Inflation is officially 28 percent. No other country has such huge inflation except Zimbabwe.”

At a breakfast in New York on Thursday for a dozen newspaper and television executives, Mr. Ahmadinejad tried to turn the spotlight onto others’ problems, citing the financial crisis unfolding in Washington as evidence that the days of U.S. world domination are over.

“The world is on the brink of a new era,” he said confidently. The current system has “lost its power to manage human society” and cannot even “respond to the current events.”

Asked about the Iranian economy, Mr. Ahmadinejad declined to answer a question about whether he had just fired his second central bank governor since taking office in 2005. “We really do not face serious problems,” he said, adding that “what you are facing [in the United States] is far harsher than in Iran.”

But in Tehran, there are concerns that Mr. Ahmadinejad will overstimulate the Iranian economy in a bid to ensure his re-election as president in June.

Mr. Laylaz, an economist, said the latest reshuffle at the central bank will open the door to “a more expansionary monetary policy.” He predicted the president will try to buy votes among the poor, which will give some a temporary respite but increase inflation in the longer term.

“It seems that Ahmadinejad will have a $10 [billion]-$15 billion budget deficit this year” because of the handouts, Mr. Laylaz said.

A paltry sum to a U.S. administration advocating a $700 billion credit-industry bailout, the figure is significant for a nation that depends on oil revenues of about $120 billion this year.

Despite these record revenues for Iran and a tradition of Iranian presidents serving two terms, Mr. Ahmadinejad cannot be assured of another mandate, said Farideh Farhi, an Iran-born specialist on Iranian politics at the University of Hawaii.

Iran’s supreme leader, Ayatollah Ali Khamenei, recently told the president to “work as if you will stay in charge for five years.” But Ms. Farhi and others said that did not mean that Ayatollah Khamenei, who has also criticized the president at times, was endorsing him.

“I do not believe that Mr. Khamenei will stick his neck out for someone who is facing stiff opposition” even within his own conservative political camp, Ms. Farhi said.

How competitive the race will be could be determined by whether Mr. Khatami, the former president, decides to run again. (In Iran, presidents can seek a third term, provided it is not consecutive.)

Should Mr. Khatami oppose Mr. Ahmadinejad, others will not enter the fray to avoid splitting votes and handing a victory to the other side, Mr. Laylaz said. If Mr. Khatami doesn’t compete, however, the floodgates will open and “five to 10 reformers and five to 10 conservatives” will vie to survive a first round, Mr. Laylaz said.

Mr. Khatami, Mr. Laylaz said, is reluctant to run again, being fearful that Iran’s powerful intelligence services will undermine his presidency as they did before.

If he stays out, potential candidates on the reform side include a former speaker of the Iranian parliament, Mehdi Karroubi, and Mr. Khatami’s former interior minister, Abdullah Nouri. Two former nuclear negotiators - Hasan Rowhani, a centrist in the Iranian political spectrum, and Ali Larijani, a conservative who is now parliament speaker are also likely to run. The mayor of Tehran, Mohammad Baqer Qalibaf, a technocrat and former police chief, is amassing a campaign war chest and trying to impress the people of Tehran by improving services in the congested capital.

Mr. Ahmadinejad said Thursday he welcomes competition. Wearing his favorite casual beige jacket to demonstrate his populist credentials, he asserted that he had encouraged Mr. Larijani to run and that in Iran, “everyone can enter the scene” and voice opinions.

In fact, a clerical-led Council of Guardians disqualifies anyone perceived as insufficiently supportive of the system in force since Iran’s 1979 revolution.

Still, there are important differences within the elite. Social restrictions eased during the Khatami period and Iran’s relations improved with Western nations and neighboring Arab states. Under Mr. Ahmadinejad, Iran has accelerated a nuclear program that could give it the ability to make weapons - which Iran denies it wants - and has antagonized Western nations with belligerent rhetoric, particularly directed against Israel.

On Thursday, Mr. Ahmadinejad said Iran did not seek confrontation with anyone and had nothing against Jews, only Zionists, who he said “are not religious people … they are simply a political party.” He repeated a proposal to solve the Arab-Israel dispute by allowing Palestinians all over the world to vote in a referendum - something Israel has rejected.

Despite Mr. Ahmadinejad’s claims about Iranian democracy, voter turnout has been dropping since conservatives began a comeback in the early part of this decade. Iranians have complained about ballot-stuffing and other voting irregularities intended to inflate the appearance of popular participation.

Nosrat Azizi, a carpenter who built most of Tehran’s old wooden ballot boxes, said he voted in 1997 for Mr. Khatami and in 2005 for Mr. Ahmadinejad, who was then considered the anti-establishment candidate.

“I have always voted for reform and for good change, to make the situation better,” he said.

Asked whether he would vote for Mr. Ahmadinejad again, however, Mr. Azizi said he would not bother because “for sure he would be president. All the presidents have won their second rounds.” Still, he didn’t rule out participating if Mr. Khatami or someone like him runs.

“I’ve heard that Khatami is going to nominate himself,” Mr. Azizi said. “There are also some other names. I would vote only if there was someone better than Ahmadinejad.”

Hadi Nili reported from Tehran.

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