New Broom Ahmadinejad Starts Wiping Iran’s Economy off the Map

When reform-minded Mohammad Khatami was elected president of Iran eight years ago, some Western observers ventured to hope he would prove to be Iran’s Gorbachev and try to restructure the hidebound, radical regime.

This hope was finally extinguished when Mahmoud Ahmadinejad was elected to succeed him two months ago. Anxieties about the Islamic Republic’s nuclear intentions and ballistic missile industry were running deep by the time the new president delivered his outrageous utterances about destroying Israel in the first stage, Western civilization in the second, with the ultimate goal of dominating Europe and the United States.

But before shocking the world, DEBKA-Net-Weekly‘s Tehran sources report he stunned his own compatriots. In the first week of September, the new president proclaimed his intention of launching a new economic order in Iran that would put an end to a system under which “the rich sucked the blood of the poor.”

The Tehran stock exchange thereupon crashed.

The bourse, the country’s main capital lifeline, has failed to recover from the shock. It is still 20% down in the dumps as Iranian and foreign capital alike gives it a wide berth. A colossal $10bn is estimated to have drained away from the Iranian economy in two months.

The hard-line president’s confrontational stance is consistent.

Though dominated by hard-liners like himself, parliament, the majlis, turned down four of his ministerial appointments, including the key posts of oil and education and culture. Ahmadinejad was forced to submit a fresh list of ministers, which he did November 2. All the candidates were political unknowns, distinguished only by being radical cronies of the president.

The key portfolio is of course the oil ministry which handles the multibillion dollar revenues that constitute 90% of Iran’s earnings. His appointee, the obscure Sadeq Mahsouli, is also likely to be vetoed by parliament.


The spreading rot of corruption


This week too the new government wielded the axe against the diplomatic corps. A shakeup was announced that entailed the sacking of 40 ambassadors and senior diplomats, mainly to purge and replace envoys who advocate a pragmatic approach to the West and the previous president’s supporters. Tehran’s ambassadors to London, Paris and Kuala Lumpur are reported in line for the high jump.

The next oil minister will be under close scrutiny because this department is notorious for wholesale corruption. It is common practice for high-ranking officials who sign contracts with foreign oil companies to pocket “commissions” running into millions of dollars. The peculator might or might not share with other colleagues in the regime.

A small item appearing in the conservative newspaper Resalat on Nov. 2 related how income from the sale of 200,000 thousand barrels of heavy oil had “unaccountably disappeared” on its way to the ministry of finance. This item aroused little interest because such occurrences are commonplace in the Islamic republic.

Even the chief justice Ayatollah Mahmoud Hashemi Shahroudi is scandalized. This week, he spoke out to warn that if the blight was not urgently eradicated, it could bring the entire regime to collapse.

The new president campaigned on a pledge to fight corruption. He has done nothing to fulfill that pledge. Indeed his radical views are making a bad situation worse. After causing the bottom to fall out of the stock market, he has done nothing to stimulate economic activity. The shops are empty as never before.

DEBKA-Net-Weekly‘s Tehran sources attribute the Iranian economy’s attrition to Ahmadinejad’s failure to chart any clear economic policy, the massive flight of capital, fears of UN sanctions against Iran for its nuclear program but, most of all, to his reckless ranting against Israel and the West.


Even Khamenei failed to rein him in


This week, his critics came out in the open. The first to raise his voice in public was the former president Ali-Akber Hashemi Rafsanjani (whom Ahmadinejad defeated in the last election). He advised the parvenu to consider international realities before indulging in unbridled rhetoric. But in a private forum of his followers, the seasoned Iraqi politician said that the new president would have to go unless he was muzzled on critical matters of state.

The outgoing president Khatami declared publicly: We are not seeking to convert everyone in the world to be faithful Muslims. He was commenting on a phrase in the president’s wipe-Israel-off-the-map speech in which he declared that Israel’s destruction was but the first stage toward domination of the infidel world, namely Europe and America.

DEBKA-Net-Weekly’s Iran experts are convinced that the West ought to treat the radical president’s belligerent rhetoric very seriously, because he speaks for the violent Revolutionary Guards. They regard the Western world as a dying force and Islam as the rising global power.

To promote their cause, the Guards demand a large slice of the national revenue to accelerate the national nuclear bomb program and long-range missile production. But they also seek to drum up an environment of international crisis and menace. Ahmadinejad performs this function on their behalf.

Last month even the hardline supreme ruler Ali Khamenei was moved to rein in the new man by awarding the Council for Promotion of the Regime’s Interests the authority to oversee the government, the judiciary and the legislature. But even after this extreme step, the president’s outbursts continued, cheered on by his Revolutionary Guards buddies.


A hard man to remove


Our Iran experts do not expect the wild-eyed Iranian president to be removed any time soon. For one thing, his ouster would be seen in Tehran’s bazaars as a sign of weakness in the ruling regime. But most of all it would expose Tehran to the peril of a military coup by the Revolutionary Guards in angry reprisal for the removal of their champion.

He is therefore likely to get away with his unbridled outbursts unpunished. But the nuclear program will be quietly taken out of his hands and passed to Rafsanjani, his rival and leader of the pragmatic opposition.

Our experts emphasize that this step when it transpires should not be mistaken for a change in Iran’s nuclear stance, only in the tone in which it addresses the world. Rafsanjani is regarded in the West as a moderate because he sounds reasonable, although in substance he is as inflexible as any representative of the extremist theocracy.

The anti-reform, fanatical president Iranians have elected as their president appears to have a penchant for mayhem rather than stable administration. Lacking a steady hand at the helm, the ruling administration appears to be breaking up into an assortment of elected and non-elected decision-making bodies at odds with one another.

This was demonstrated on Tuesday, November 1.

When the president’s outburst was still echoing around the world’s chanceries, Iran suddenly notified the IAEA in Vienna that UN nuclear inspectors would be allowed to visit previously prohibited sections of the top-security military complex at Parchin. That same day, the majlis passed the first reading of a bill obliging the government to immediately activate at full capacity the uranium enrichment facility at Natanz.

The first action appeared to be motivated by a wish for compromise to avoid UN Security Council referral and sanctions. The second zigzagged back towards intransigence.

This conduct could be interpreted as typical Iranian deceitfulness. However DEBKA-Net-Weekly‘s sources in Tehran say this might have been the case in the past. Today, it is an example of two separate branches of government executing conflicting actions totally out of sync.

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