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Features Iran: new direction?
August 3rd, 2005 -- Mahmud Ahmadinejad, Iran’s newly elected president, was due to announce the composition of his first government as MEI went to press, but few details had emerged about the complex deliberations involved. As usual, the Iranian public knows next to nothing about the backroom manoeuvrings and machinations that are permanent features of the Islamic Republic. But on this occasion, much of the political establishment is equally in the dark, particularly members of conservative groups like the powerful Militant Clergymen’s Association (MCA) or the bazaar-based Islamic Mo’talefeh. This is no doubt part of a deliberate political strategy to confound opponents before the cabinet is announced some time between 3 and 11 August. This same tactic of secrecy and aloofness yielded huge dividends during the election campaign. It is also in full keeping with the nature and past practices of the Abadgaran, the political coalition to which the president-elect belongs and which is now in full control of the Majlis and Tehran City Council. Particularly irksome to many in the conservative establishment is Ahmadinejad’s personal management style. According to a source close to the president-elect, throughout his regular meetings with officials, lobbyists, factional representatives and other notables, Ahmadinejad maintained a brusque and dismissive attitude — in sharp contrast to the humble “everyman” demeanour he presents to the press and public. Many senior figures, including Oil Minster Hamid Zanganeh and a number of Kurdish MPs, reportedly left after meetings with him baffled, not knowing whether his dismissive tone was attributable to lack of experience or to supreme confidence after his landslide victory. Neither Ahmadinejad’s tendency to secretiveness nor his apparently cavalier approach seem to have damaged his esteem in the eyes of Iran’s Supreme Leader, Ayatollah Ali Khamenei, who reportedly believes the surprisingly large vote cast for his favoured candidate — 10 million more than expected — has provided them both with an extraordinary opportunity to create new alignments and set new priorities. The selection of the new cabinet entailed the formation of three separate special committees of experts whose brief was to search for candidates who fit the criteria set out in a letter published by the new president. The criteria include being “devout, ascetic, hard-working, incorruptible and competent”. The committees proceeded to choose among 900 potential candidates for 22 ministries and vice-presidential positions. Contrary to previous practice, it refused to solicit the opinions of other groups or individuals outside the circles of the president-elect and the Leader. In the end, they recommended a shortlist of 3-5 individuals for each post. The source told MEI the new cabinet will closely reflect Ahmadinejad’s instructions to the selection committees: it will include many new faces, will be less doctrinaire than past cabinets, although it is likely to include two or three “radical” figures, essential, it is said, to placate the radical groups that played an important role in engineering his electoral victory. As to the policies the new administration is likely to follow, there appears, contrary to perceptions both inside and outside Iran, to be considerable flexibility in the formulation of policy decisions. Foreign policy Early indications are that Ahmadinejad’s foreign policy will provide much continuity with that of the Khatami era. Despite Khatami’s personal predilections, major foreign policy decisions, particularly during his second term in office, were formulated in power centres other than his own. So on issues such as relations with Iraq and the Arab world, as well as the Middle East peace process, few changes should be expected. However, on the pressing issue of Iran’s nuclear programme, early indications are that, at least in the short term, Ahmadinejad will conduct a more proactive policy than his predecessor. The new president believes that the nuclear programme is an indispensable source of power and prestige for Iran, a programme in which the country has invested vast human and material resources. Based on the conviction that its continuation is one of the highest national security priorities, the new leadership strongly opposes discontinuing the programme and is willing to pay the price for it. For example, according to MEI’s source, in a private talk with Hassan Rohani, Iran’s chief negotiator with the European Union troika, Ahmadinejad said Iran’s referral to the UN Security Council would be a small price to pay for continuing the nuclear programme. Significantly, in recent weeks, Iran’s national TV has been running a series of educational programmes and panel discussions on the benefits of nuclear power. Observers interpret this as a sign that the public is being prepared for a major resumption and possible acceleration of enrichment activities. In addition, several hundred conservative academics have collected signatures in recent days for a petition urging the government to resume enrichment and not to succumb to external pressures. Finally, it was reported in late July that Iran’s negotiating team in London had informed its European counterparts it was preparing to resume enrichment. By far the most significant indication that the new government may be hardening its nuclear stance came when Ali Larijani was seen accompanying Ahmadinejad in his meeting with Iraqi Prime Minister Ja’fari in Tehran in mid-July. Although not generally considered a hard-liner on foreign policy, Larijani, who made an unsuccessful bid for the presidency, is on record as advocating a much faster pace in Iran’s nuclear development. The gesture is also widely interpreted in Tehran as a sign that Larijani will take a major foreign policy post in the next government. In this connection it is believed that Ahmadinejad is anxious Hassan Rohani retain his post at present because of the negative signal his removal might send to the international community. However, political circles in Tehran are of the opinion that Rohani’s boss on the National Security Council, Ali Akbar Hashemi Rafsanjani, is making his continued presence on that body — and as the public face of Iran’s nuclear diplomacy — conditional on one of his allies holding the industry and mining portfolio. The ministry has long been a Rafsanjani preserve. In general, however, despite Ahmadinejad’s past hard-line positions, a great deal of flexibility is to be expected in the next administration’s foreign policy. In particular, with political rivals marginalized or ousted from power, radical posturing and sloganeering has lost most of its utility. Economic policy By general consensus, the success or failure of Ahmadinejad’s presidency is inextricably bound up with his government’s economic performance: specifically, whether or not he can deliver on the promises of economic and social justice he has made. It is estimated that of the 17 million who voted for him, over 9 million did so largely for economic reasons. This group, almost all from poor and working class families, are a double-edged sword that may turn their ire on the new government if their expectations are unfulfilled. Largely oil-based, Iran’s economy suffers from all the ills and distortions of the rentier economy: 5,000 large and medium-sized state-owned firms — many of them loss-making — consume around 60% of the annual budget, while 80% of economic activity is controlled or related to the government sector. Politically connected individuals and groups routinely engage in rent-seeking activity of often dubious legality, while mafia-type circles control monopolies and large swaths of the economy. The result is rampant inefficiency, corruption, nepotism, a large income gap and very high rates of inflation and unemployment. The only bright spot is the huge boost in oil revenues from the recent surge in oil prices. The windfall has considerably eased the pressure by bringing in a flood of imports and riches for the better-off. Clearly, most of these problems are systemic and it is highly doubtful the new government will have either the will or ability to implement serious structural change. But there is a lot it can do to bring about a short or even medium-term upturn, and there has been much speculation in Iran about the merits of various measures thought likely to be on or close to Ahmadinejad’s agenda. 1) The new government can try to implement a Keynesian-style expansionary fiscal and monetary approach to increase income and economic activity. Included in the discussion on this approach are thought to be the fate of over 11,000 unfinished economic projects initiated by previous governments, as well as the expenditure of billions of dollars on new infrastructure projects to help alleviate unemployment. This year’s huge windfall from oil income, estimated at $40bn, would fund such expenditure. Another possibility is to make available low-interest loans to students, young couples and small and medium-size enterprises. This would certainly be popular with the electorate. 2) The government plans to distribute billions of dollars worth of stocks to rid itself of control of many state-owned firms. Although it is yet to be determined how this would be put into practice, the idea would be to decrease the size of the state’s holding, reduce the national debt and give the population a tangible stake in Iran’s future. Politics and society With the election of Ahmadinejad, all three branches of the Iranian government are now firmly in the hands of the radical right. This is a rare historical moment that may not be repeated, one which the present leadership is loath to squander. While Ahmadinejad and members of his new elite have backgrounds in either security, intelligence or the Basij, or have strong connections with bastions of the hard right, they will have to make concessions to the centre in order to maintain the country’s stability. Nearly 26 years of failed social engineering and experimentation, as well as the problems of governing a complex society like Iran, leave little room for a dogmatic approach. There is very little to suggest anything other than this in the government’s early phase. In both the political and social arenas, it is expected to tread carefully and pragmatically, to ensure that the tenuous social equilibrium reached during the Khatami era is not disturbed. This state of affairs is of course contingent on the absence of grave foreign or internal threats to the system. For under such contingencies, the most likely scenario would be repression at home and adventurism abroad. For now, while a new elite is consolidating itself, social peace and harmony would seem to be the government’s most likely motto. |
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