Saturday, June 20, 2009

The Economics Of The Iranian Presidential Election

While many think the appeal of Mahmoud Ahmadinejad has been his Shi'i fundamentalism, in 2005 he ran against the wealthy former president and favorite of the Iranian mullah hierarchy, Hashemi Rafsanjani on populist economic grounds, complaining somewhat like Jimmy Carter in 1976 against Gerald Ford that the Iranian people were economically worse off than four years before and that he would help the poor. Supporters of Rafsanjani included the established mullah hierarchy, including Vilayet-el-faqih ("Supreme Jurisprudent") Ayatollah Khamene'i. There is evidence that Ahmedinejad has engaged in various redistributive programs especially aimed at the rural poor. However, crucial economic variables have gotten worse, just as they did for Carter by 1980, opening him up to the criticism he leveled against his earlier opponent. There are various numbers out there, but after digging around it would seem to me that the best estimate on the overall unemployment rate is that it was about 10.4% in December 2004 (, but that by February 2009 it had hit 16.3% (

As for poor Carter in the US, the inflation in Iran also appears to have risen as well from 13.5% in 2006 to 17.1% in 2008, prodiving the dread genie of stagflation ( , with some reports suggesting it has soared to over 20% in 2009, all of this with much higher oil prices than in 2005, which should have made things easy for Ahmadinejad economically. It should also be noted that most sources show youth unemployment being anywhere from 50-100% higher than the overall rate, thus quite possibly over 30% now, with that of young women possibly as high as 50%. No wonder that Ahmadinejad has been hurting badly on the economic issue, both with fervent youth now in the streets, as well as with such previous backer as the conservative bazaari merchants and even reportedly with elements of the military and Revolutionary Guards who respected Mousavi's performance as prime minister during most of the Iran-Iraq war in the 1980s.

The real question now, in the face of clear electoral fraud by the regime, is why Khamene'i has switched sides and is backing Ahmadinejad this time over Mousavi, who appears not to have threatened the foundation of the regime before now. Khamene'i has called for there to be no demonstrations today in Iran, with the threat that any might be put down violently. This becomes even more problematic given that the one authority able to replace his is the council headed by former president Rafsanjani, whom he reputedly supported in 2005, but who now supports Mousavi by the best reports. Clearly this is a moment of deep decision in Iran, and I do not have a full explanation or understanding of what is really going on there. At this point I hope that there is not too much bloodshed, while truth and justice prevail.


gordon said...

Surely it is necessary to discuss the economic effects of sanctions? This Wikipedia article, though far from exhaustive, indicates that trade and investment in Iran are a good deal below what would be expected in a non-sanctions environment.

Diane Warth said...

Sanctions and percentages are entirely ignored because the objective is not truth but is spreading the contagion of mass hysteria.

Allegedly 19-21 million voted for Mousavi and 1 something million demonstrators (if that) is construed as yet another clear indication of fraud. If this same percentage of voters (and those admittedly too young to have voted) acted in such a manner in the U.S. or one of its satellites, they would be derided by the same observers as an angry, dangerous mob.

Interesting take on percentages here:
Conversation on historic losses and perceptions of those losses

Barkley Rosser said...


Sanctions may have had some impact, but the deeper problem is the dependence of the Iranian economy on oil. This is the old ironic curse of the natural resource state, also called "Dutch disease," in which having a lot of a valuable natural resource that can be exported, especially oil, tends to drive out other industries, especially as exporters. An even bigger problem with oil is that it employs little labor, but drives out labor-intensive competing industries from being able to export. In a country with a surging population, this leads to lots of unemployed youths, which was a problem under the Shah (when there were no sanctions), was a problem four years ago, and has only gotten worse since.


I am a bit mystified by the remarks in the link you have provided. They seem to imply that the report leaked from the Interior Ministry showed that Mousavi won outright. This is not so. He supposedly got 19 million, but this is out of about 40-41 million, so not a first round victory. What is suspicious with those numbers is their putting Ahmadinejad in third place behind Karoubi, thus booting him out of a second round.

Ahmadinejad was formerly the mayor of Tehran, with his strongest base of support being in the poorer parts of southern Tehran. A lot of reports have suggested that his support there has weakened badly. A million people in the streets of Tehran protesting the outcome of the election suggests that we should not be surprised if Ahmadinejad indeed lost Tehran (and most of the other big cities), even if he actually did get the most votes overall (or even got more than 50%). Word has been that the base of his support has been more in rural areas more recently.

Diane Warth said...

Barkley - The discussion I linked to concerns the numbers Mousavi's camp magically produced then claimed were "leaked" that allegedly prove he won.

So far as I know these are the official results:
LATEST: Full election results, by numbers

I'm not aware of anyone claiming that Ahmadinejad won Tehran or surprised he lost it.
Tehran count revealed
June 14, 2009

Diane Warth said...

Mousavi claims victory in fierce Iran presidential poll
Friday, June 12 08:26 pm
"In line with the information we have received, I am the winner of this election by a substantial margin," Mousavi said.

Only minutes earlier, close Mousavi aide Ali Akbar Mohatshemi-Pour told AFP his candidate had won 65 percent of the vote.

Neither man gave any details to back up his claim.

Al-Arabiya: According To Iranian Interior Ministry Leak, Mousavi Won
MEMRI Iranian Media Blog
Posted 16 6 2009
The Al-Arabiya website reported yesterday from Tehran, based on a leak by employees in the vote-counting apparatus in Iran's Interior Ministry, that the real winner in Iran's presidential election on Friday was Mir Hossein Mousavi, with 21 million votes – 57% of the 37 million votes cast.

According to the report, the ministry faked the elections using a computer program, and issued results that had been prepared ahead of time.

Source: Alarabiya, June 15, 2009

Barkley Rosser said...

Well, I am now watching TV. Blood is in the streets of Tehran, with a total of 19 dead. The government is still squashing regular news coverage. Government planning to arrest Mousavi for all this. If any of you want to justify this, be my guest.

If this government were not a dictatorship, they would either do a better job of proving that their election results are credible (they did NOT allow any observation by opposition or others), or re-olding the election.

Jack said...

There is nothing good to say about Iran's ruling elite. This election appears to have been a power struggle between elements of that group rather than a struggle between more and less democratic ideologies. There will be blood. There may be wholesale civil war. The results in any case do not foretell democratic reform. If there is hostility and turmoil now there may at some much later date be movement away from tyranny.

There just seems to be little to be said from the outside that is beneficial to the people of Iran. Any significant change in the power structure has to come from within. Anything others have to say in this fight between factions is going to be misplaced and of no useful purpose. Support peaceful resolution and don't take sides.

Barkley Rosser said...

Regarding the election results, it is curious that there seem now to be at least four different reports. At the extremes are the claims that on the one hand Ahmadinejad got 62-63% and at the opposite that Mousavi got 65%. There is this supposedly leaked report that has Mousavi with a bit under 50% and now the more recent official report, linked to by Diane, that has Ahmadinejad at 55%. What a mess.

Diane Warth said...

Barkley - The translation "of vote results in some (maybe most) of Iran’s major cities" I linked to was published 14 June by the blog, the source a .pdf file posted on the Interior Ministry’s website.

The translator also informs:

‘These account for a total of 16,565,964 votes. Of these, 9,194,832 belonged to Ahmadinejad (55.5%) and 6,734,204 to Mousavi (40.1%). The national total was 39,371,214, of which Ahmadinejad got 62.5% and Mousavi 33.9%. said...


Please check out Juan Cole's recent reports. Apparently some parts of Iran are reporting more votes than are registered voters. The official results are simply garbage, whatever the reality actually is.