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 (http://www.payvand.com/news/04/dec/1102.html), but that by February 2009 it had hit 16.3% (http://www.encyclopedia.com/doc/1G1-594557005.html).

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 (http://www.indexmundi.com/iran/inflation_rate(consumer-prices).html) , 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.