Iran seals its doors tighter against the West
(Herald Tribune) TEHRAN: Rents are soaring, inflation has been hovering around 17 percent and 10 million Iranians live below the poverty line. The police shut down 20 barbershops for men in Tehran last week because they offered inappropriate hairstyles and women have been banned from riding bicycles in many places, as a crackdown on social freedoms presses on.
For months now, average Iranians have endured economic hardship, political repression and international isolation as the nation’s top officials remain defiant over Iran’s nuclear program.
But in a country whose leaders see national security, government stability and Islamic values as inextricably entwined, problems that usually would constitute threats to the leadership are instead viewed as an opportunity to secure its rule.
President Mahmoud Ahmadinejad’s economic missteps and the animosity generated in the West by his aggressive posture on the nuclear issue have helped his government stymie what it sees as corrupting foreign influences by increasing the country’s economic and political isolation, economists, diplomats, political analysts, businessmen and clerics said in interviews over the past two weeks.
Pressure from the West – including economic sanctions – over Tehran’s nuclear program and its role in Iraq has also empowered those pushing the harder line, many of those interviewed said.
Saeed Leylaz, an economist and former government official, said: “The leader is concerned that any effort to make the country more manageable will lead to reform and will undermine his authority.”
The effort to keep Iran’s doors to the West sealed tight was on display Sunday, when Ahmadinejad announced that Tehran’s scientists had developed 3,000 centrifuges and then mocked the West for trying to press Iran to stop uranium enrichment and slow its nuclear program.
On Monday, Ayatollah Ali Khamenei, the supreme leader, tried to use such Western tactics to rally public sentiment behind the government. “Iran will defeat these drunken and arrogant powers using its artful and wise ways,” he said to a group of students, state run television reported.
The remarks were seen here by Western diplomats and political analysts as an attempt by the president to undermine months of careful negotiations between more pragmatic conservatives in the leadership and the International Atomic Energy Agency, which days earlier had said that Iran was being more cooperative.
The message was clear, a Western diplomat said. “They are convinced the rest of the world is trying to put pressure on Iran to keep Iran down,” said the diplomat, who requested anonymity so as not to compromise his ability to work in Iran. “They believe if Iran makes a concession to the West on the nuclear issue, it will be the first step toward regime change.”
The economic component of Iran’s go-it-alone approach began with Ahmadinejad’s election two years ago. He laid down a series of erratic economic decrees that he said were aimed at helping the poor, but often made their lives harder. Recently, the head of the central bank and the ministers of oil and industry resigned, warning that Iran was heading toward trouble. The president’s decisions have frightened away investors, derailing efforts to open Iran to world markets, analysts said.
The leadership has been able to ease some of the pain because of the income from its crude oil sales. Ultimately, those interviewed agreed, Ahmadinejad has continued unimpeded because he has the support of Khamenei, who has the final say on all key decisions.
“The only thing that has kept Ahmadinejad in power is the support of the leadership,” said Muhammad Atrianfar, publisher of two newspapers that have been closed and an ally of former President Hashemi Rafsanjani. “As soon as the leader stops supporting him, he can easily be impeached and dismissed.”
No one accuses the leadership of deliberately fostering economic chaos. Instead, analysts here said Ahmadinejad fails to understand the effects of his policies. “He feels the pain of the poor but doesn’t have any solution,” said Ali Rashadi, an economist. “He is wrecking a system that was patched together over 25 years.”
Many journalists, academics and former government officials said they thought Ahmadinejad had been more active, and reckless with the economy, than Khamenei had expected. But he is comfortable with Ahmadinejad because he can count on him to preserve the system and to roll back political, economic and social changes that conservatives feared were insidious steps toward revolution, some of those interviewed said.
A Western-allied ambassador here said that the supreme leader and the security services arrested Haleh Esfandiari, an Iranian-American scholar who was imprisoned here for months before being allowed to leave the country last weekend, partly as a warning to Iranians who have expressed dismay over the direction of the country.
“They think little by little we have moved away from Islamic values,” said Mohsen Kadivar, a cleric who was removed from his teaching job at Tehran University. “They see Ahmadinejad as the man to return Iran to these values.”
Kadivar added, “What’s important for them is being in power.”
When Ahmadinejad was elected, he campaigned as a Robin Hood, promising to redistribute Iran’s oil wealth from the rich to the poor. One of his first edicts was to order banks to lower interest rates to 12 percent, from as high as 17 percent. The order, like others, backfired, making loans harder to come by.
In another case, Ahmadinejad decided that the price of cement was too high, so he ordered it reduced. Rashadi, the economist, said the decree frightened away investors who had planned to build new cement factories around the country.
Rashadi also said the president’s constant insults aimed at the stock market had undermined investor confidence, which he said encouraged people with money to invest in real estate, driving up property values.
“My income does not match my cost of living,” said Hassan Khalili, 37, who rents a small apartment in the village of Vardan, a meandering hillside community of about 9,000 people an hour outside Tehran. “I thought it was going to get better under Ahmadinejad, but it didn’t.”
But with its oil revenues, the government has, in the short term, been able to buy itself out of an economic meltdown by using $60 billion for subsidies and a massive increase in imports – although that has undermined local manufacturing, economists here said.
Some of those interviewed said the oil revenues also have helped shore up the regime by enriching a new ruling class made up of members of the Revolutionary Guard and alumni of the Basij militia, who have their hands in nearly every aspect of the economy – and now in much of the government as well.
Ahmadinejad’s economic policies have also cushioned many homeowners because property values have skyrocketed. Three years ago, for example, a four-bedroom apartment in a good Tehran neighborhood sold for $200,000; it could be worth more than $1 million today.
Mehdi Panahi lives in central Tehran and runs a small snack shop in the mountains just north of the city, where many people hike and relax on the weekends.
He has had to raise his prices 20 percent since March, he said, because his rent doubled in the last year. The cost of cooking oil shot up 50 percent, tomato paste rose 70 percent and prices of dairy products increased by 70 percent.
But in the current environment of fear and caution, Panahi said: “Of course I am optimistic. What is there not to be optimistic about?”
The economic upheaval has been coupled with a far-reaching, months-long security clampdown. Analysts said the authorities have arrested prominent Iranian-American intellectuals, suppressed the student movement, rolled back social freedoms, purged university faculties, closed newspapers and moved to marginalize political figures who are out of step with the government.
Those arrested included a once-prominent ally of the leadership, Hossein Mousavian. The former nuclear negotiator – and ally of Rafsanjani – was detained on espionage charges in May.
The repression is calibrated. Students and female activists have been encouraged to leave the country or face more serious pressure. The idea is to send a message without spreading the pain too widely.
As a result, the streets are calm but there is an undercurrent of unease and confusion. People routinely say that life is good, better even under this president – then rattle off a litany of complaints.
Last week, Ahmedinejad attended a conference of religious leaders in the north of Tehran. Ali Akhbar Akhbari, his wife and two young daughters live in a tent a block from the convention center. They said they were homeless and collected bottles to make money for food. Marziah, 13, and Roziah, 9, slept in their own small tent decorated with Looney Tunes characters.
“No one will help them!” shouted Valioalah Ghiyasi, 60, as he walked down the street, his hands deep in the pockets of his sport coat. He pulled a pay stub from his pocket, showing his own small government salary, the equivalent of about $130 a month.
“It was a better situation before,” he said. “My wife has cancer and I can’t afford the medicine. I haven’t been able to pay my rent in five months. My rent is $250 a month. I don’t know what to do. I am begging.”
The net effect of the president’s policies can be seen in the village of Vadan. Property values have gone up so much that a local man, Ghalan Abbas Mahmoodi, has been able to open a real estate office.
Farmers are selling off land, and wealthy people from Tehran are building villas on scenic hills overlooking the rolling countryside.
Those who do not own land and have seen their rents soar, like Khalili, said they were facing a catastrophe.
Mahmoodi, the realtor, had a different view. “As my income increases, my purchase power increases,” he said.
While the president has lost a great deal of political support within the system, he has not shown any signs of being deterred. “There is an honorable butcher in our neighborhood who is aware of all the problems of the people,” Ahmadinejad said, “and I also get important economic information from him.”
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