Iranian Presidential Elections June 2009

Epiphany Term 2009 Policy Brief

IRANIAN PRESIDENTIAL ELECTIONS JUNE 2009

Centre for Iranian Studies—Durham University [email protected] Epiphany Term 2009 Policy Brief Page 2

DURHAM UNIVERSITY Centre for Iranian Studies

About the Centre

Founded in 1999, The Centre for Iranian Studies is a subsidiary research body of the Institute of Middle Eastern and Islamic Studies at the University of Durham. Its central aim is to facili- tate and encourage debate, research and the growth of Iranian Studies in the UK.

To achieve this, the Centre encourages links and exchanges between academics and academic institutions in the UK and Iran and hosts lecture series, seminars, workshops and conferences. Furthermore, the Centre for Iranian Studies facilitates the publishing of policy-relevant studies in Policy Briefs aimed at addressing Iranian affairs in a highly academic fashion.

The Centre for Iranian Studies' areas of expertise however transcends contemporary and policy -driven concerns and includes medieval, pre-modern and modern history of Iran, Iranian culture, Shi'ism, Modern and Classical Farsi alongside archaeology of the ancient Near East, Sas- sanian Iran and early Islamization.

Who is Who:

The CIS Executive Committee

Dr. Reza Molavi Executive Director, Centre for Iranian Studies Prof. Anoush Ehteshami Dean of Internationalization Durham University Dr. Colin Turner Director, Centre for Iranian Studies Dr. Paul Luft Director, Centre for Iranian Studies

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Iranian Presidential Elections June 2009

Contents Editorial Board

Anoush Ehteshami 1. Slogan vs. Manifesto: Analyzing Election Campaigning in Iran Reza Molavi Jennifer Thompson 2. Greatest Challenge For the Next President: Economic asperities outbalancing Iran’s nuclear ambitions and antagonism towards the United States Authors

3. About the Authors Ariabarzan 4. Interns at CIS Mohammadighalehtaki

5. CIS events past and present Intern and Team Leader Centre for Iranian Studies

Ehsan Abdoh Intern Centre for Iranian Studies

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Slogan vs. Manifesto: Analyzing Election Campaigning in Iran

Iran’s next presidential elections 1997, he surprised every one by Ahmadinejad. When Ahmadinejad will be held on June 12, 2009, and stating that what he meant by “civil launched his bid for the 2005 presi- besides many politicians who indi- society” was the “the City of dential election, his campaign cated their inclination to run for the Prophet Muhammad”. pledges included “bringing oil presidency if certain conditions money to people’s tables”.(2) Many were met, Mir Hossein Mousavi While the Western civil society, poor working class people voted for and Mehdi Karrobi have made it historically as well as theoretically, him because of his general promise public that they will compete is derived from the Greek city- to improve their living standards against the current president Mah- states and the later Roman political but they forgot to ask Ahmadinejad moud Ahmadinejad in the upcom- system, the civil society we have in how exactly he is going to deliver ing election. mind has its origin, from a histori- on his promise. Ahmadinejad did cal and theoretical point of view, in not say whether he was going to However, what is missing from all “Madinat ul-Nabi.”(1) reduce taxes or increase them, nor candidates’ and hopefuls’ agendas did he provide a fiscal policy to so far is an election manifesto. By If during his campaign Khatami had which he could be held account- the term “election manifesto” I provided a program that explained able. Instead he merely said that he mean a tangible plan that each can- how he was going to support civil will “bring oil money to people’s didate would present to the elector- society in Iran, he could not easily tables”. He did not even bother to ate as his election pledge, a plan have bent his words and used the provide his own interpretation of both political and economic that is term “civil society” in a sense dif- the promise he had made (like concrete and details as opposed to ferent from that in which it is com- Khatami). In fact, after feeling abstract and general. monly understood. But he has not, secure enough in the position of which gave him the liberty of not power, he denied using such a slo- Historically presidential election being accountable to what he said gan altogether. campaigns in Iran are mostly based in his election campaign after being on personality and slogans rather elected. Personality is an important factor in than programmes. In Iran slogans election campaigns everywhere. have taken the place of manifestos. I am certainly not denying that With all else being equal, candi- Slogans are general, catchy and Khatami was a president with a dates who hold charisma have bet- could be interpreted or ex- ter chances of getting elected plained differently before than those who are not charis- and after the elections. This “Historically presidential elec- matic. In this sense elections in can be better understood by tion campaigns in Iran are Iran may not seem that differ- the following examples from ent from elsewhere. Both recently organised election mostly based on personality and Khatami and Ahmadinejad did campaigns in Iran. slogans rather than possess some charismatic char- programmes” acteristics that helped them win A key slogan that was used elections. However, what explicitly by Mohammad makes election campaigning in Khatami during his election cam- reformist agenda. Instead I am Iran different from that in the US paign in 1997 was to promote, questioning the transparency of that for example is the accountability strengthen and support “civil soci- agenda during his first election factor. ety”. As a matter of fact, it was this campaign. When one does not pro- slogan that rallied educated middle vide people with a written docu- In America Barack Obama was class Iranian’s behind him. How- ment that explains in detail what under criticism by some prominent ever once in office and under im- exactly you are going to do once Democrats in the Congress for fail- mense pressure from the hardliners’ being elected as a president, you are ing to keep his promise of pulling camp, he provided an unfamiliar in fact making yourself unaccount- out all combat troops from Iraq by definition of “civil society” hitherto able to the electorate. next April. Obviously, not every unknown to anyone. In a famous president can keep his or her elec- speech at the Islamic Summit Con- Another instance, this time from a tion promises but in many countries ference in Tehran, 9 December Principalist President Mahmoud the success or failure of the presi-

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dent is compared against his or her below the rate of inflation and dis- cal manoeuvres during the last three election manifesto. The more prom- mantling the Management and years, I would like to have a look at ises they can fulfil the more credit Planning Organization (which was the bittersweet experiences of a they will receive. However in Iran historically charged with mapping president who used to be a symbol it seems that presidents can get out long term economic strategies ) of reformism. away with almost anything since made him unpopular with many they are not accustomed to stating middle class Iranians. Giving out During his first two years in office their agenda and program in a pre- cheap loans and affordable housing President Seyed Mohammad cise fashion. to many lower income people and Khatami was successful in expand- distributing shares of the major ing the freedom of both citizens and Until now there are three major state owned companies among the press. His “dialogue of civiliza- candidates who have directly or poor families, however, have made tions” initiative was very well re- indirectly expressed there willing- him widely popular among the im- ceived in the western world and his ness to enter the 2009 election race poverished and lower income seg- attempt to crack the “tall wall of in Iran: the current president Mah- ments of the society. mistrust” between Iran and America moud Ahmadinejad, the former was admired by most Iranians and premier Mir-Hossein Mousavi and In addition Ahmadinejad’s many Americans, especially in the the former speaker of Majlis Mehdi “economic transformation plan” Clinton administration. Karroubi. However the candidate could be viewed as his election whose late entry to and early depar- manifesto (at least in the economic However, two years after ture from the election race has left terms). The plan which includes Mohammad Khatami’s overwhelm- everyone in the state of shock (i.e. reforms in taxation and subsidies is ing victory in 1997 his conservative former president Seyed Mohammad supposed to give more freedom to adversaries (who had since been in Khatami) must not be forgotten. the private sector and reduce the a state of shock,) began to lick their country’s reliance on oil revenue.(3) wounds and put together a new I would like now to examine each This plan was passed to parliament strategy aimed at dismantling and candidate’s electoral behaviour in for approval but the recent decrease blocking the reform efforts of order to elucidate the above discus- in the price of oil and the subse- Khatami. In the absence of strong sion and put it in the context of quent fall in the state revenue have reformist will to use the power of today’s Iran. brought it to a deadlock. masses the conservatives took the initiative by gathering their most President Mahmoud Ahmadine- Ahmadinejad’s record as a presi- loyal elements inside and outside jad is the top Principalist nominee. dent in addition to his economic the Majlis in a formation later nick- As President he enjoys access to plan can give the average Iranian named Setade Zedde Eslahat [The state funds and this gives him a electorate a solid glimpse of the Counter-Reform Headquarter]. huge privilege over his competitors. next four years if he is re-elected. His numerous visits to almost every In an interview with Iranian na- Unfortunately for the reformists the province in the country have ex- tional television and in an effort to eager conservatives involved in the ceeded the shape and scope of a respond to the criticisms made by Headquarter were for the most part normal presidential mandate and former president Khatami against successful in their mission. It are largely considered as an exploi- his economic plan, he said “those seemed that Khatami’s honeymoon tation of public money for personal who use words such as “servitude” of freedom and reform was going to gains. Furthermore, while the Ira- in relation to cash payment instead end early. nian national television is con- of subsidies should say what solu- stantly broadcasting president’s tions they have to present?”(4) After the student uprising of July speeches in near and far cities, the 1999 and the “mass closure of pro- other candidates are deprived from Seyed Mohammad Khatami who reform papers” in the subsequent holding a University hall meeting has been the reformists’ top candi- years he became a handicapped under the excuse that the official date ruled as the president of Iran politician who could not even pro- time for election campaigning has from 1997 to 2005. Even though he tect his own ministers, let alone not yet arrived. pulled out of the presidential race in ordinary Iranians. The reformist 16th of March 2009, he spent a con- lost the Majlis, the city councils and Mahmoud Ahmadinejad is the only siderable amount of time during the the presidential elections to their candidate with a current presiden- last three years contemplating and opponents. tial record. People can actually operating on becoming a tenet of judge his policies and their effec- the Sa’dabad Palace for the third Yet despite all his failures, Khatami tiveness and decide whether to vote time. Therefore, for the purposes of is still a charismatic figure and is for him or not. In the economic my argument, I cannot afford to still seen by many Iranians as the domain his seemingly bizarre deci- turn a blind eye on his activities. only viable alternative to Ahmadi- sions such as cutting interest rates Before analysing Khatami’s politi- nejad’s rule.

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It seems that Ahmadinejad’s mis- and development, all these can be his nemesis, President Ahmadine- management of the economy, his achieved through religion.”(5) jad. In a 2008 meeting with a num- cavalier attitude towards students ber of Bushehri intellectuals and and human rights activists and the And: notables he criticised Ahmadinejad way he deals with the free press and for his over-reliance on oil reve- publications has alienated many of “In today’s world the long distance nues. (9) In another meeting in his initial supporters and made between morality and politics has March 2008 this time with the nota- them wish for another period of been disastrous”.(6) bles of the Bakhtiari tribe in a state- Khatamisim. However, Khatami’s ment that was received as a harsh withdrawal from the election bid Another important statement he attack at Ahmadinejad’s distribu- and his endorsement of Mir- made was that “a movement can tive policies he said that “people do Hossein Mousavi has disrupted all only become sustainable if it de- not need to be given donations from these premature dreams. rives from the centre of the masses’ their own pockets, our society is demands, decisions and apprehen- above that.”(10) Khatami’s Approach to election sion”. (7) He added, “There was a campaigning: time that I did not want to touch on To cut a long story short, Khatami Dr. Shariati’s idea’s because he has has been more comfortable degrad- Khatami has always been more many opponents and proponents, ing Ahmadinejad’s record than pro- concerned with the theory of reform however he did do a very important viding a new policy of his own. It is than its practice. After his presi- job…he believed that the language always easier to react to an unpopu- dency Khatami became active in of elite must be levelled with the lar policy in a negative way than to two major fields. The first one was language of the masses, of course propose genuine policies in a posi- to promote his message of dialogue the role of Imam in this [discourse] tive way. Similarly it is less risky to among the civilisations along with a was very important and Dr. Shariati announce vague but attractive slo- broader audience. To achieve this was very successful in this job, stu- gans than to announce a list of fea- purpose he made many trips to dif- dents and university lecturers sat sible election promises. This pattern ferent countries around the world next to workers and farmers and all of behaviour (as we will see later) and held numerous lectures in is prevalent among all which he was professing the Khatami has been more comfortable election contenders. idea of dialogue among the civilisations as an alternative to degrading Ahmadinejad’s record Hojjatol-Eslam Mehdi Samuel Huntington’s “clash of than providing a new policy of his Karroubi was the civilizations”. own speaker of the Iranian Majlis from 2000 to The second part of his post- 2004 and one of the 2005 strategy was to clarify his understood each other’s lan- founders of the Association of the version of reformism and explain guage.” (8) Combatant Clerics, an Islamic or- what his perception of reformism ganisation that was created out of was. It seems that Khatami has realised the Combatant Clergy Association that the language used by reformists in 1989. Karroubi left his organisa- In order to accomplish this task, up until that time was no match for tion when members of the Associa- Khatami gave two conferences so Ahmadinejad’s populist agenda. tion refused to support his bid for far. Both were organised by the Therefore he was in agreement with president in 2005. BARAN institute. BARAN is an a discourse that is both reformist acronym for [Foundation for Free- and populist! In the 2005 presidential election dom, Growth and Development of Karroubi was probably the only Iran] Bonyade Azadii Roshd va However, what has been com- candidate who made an obvious Abadanie Iran, a research centre pletely absent during all of election promise: a monthly pay- established by Khatami and a num- Khatami’s recent lectures and con- ment of 50000 Iranian tomans ber of his former colleagues after ferences is a proposal or manifesto, (about 50 US dollars) to every Ira- the end of his second term. which clearly and concisely states nian citizen if he was elected presi- the policies he plans to implement dent. Middle class Iranian’s under- Khatami’s speeches in these two once in power: “A Road Map for estimated this pledge and reduced it conferences went on endlessly Reform”. to the level of an amusing joke. about the philosophy of reform and Ironically a promise that was taken how reform and religion should be For reasons that will be discussed lightly by many Iranians brought its compatible. For example: later in the conclusion of this paper owner more votes than Dr. Moein’s Khatami was reluctant to offer a human rights and democracy “The reforms that we speak about, detailed plan; instead he was doing agenda. Despite this relative suc- democracy, civil society, growth his best to criticise the job done by cess he did not make it to the sec-

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ond round. Karroubi blamed elec- manifesto, is repeating itself in the sembled themselves around the tion fraud and irregularities for this case of Karroubi. newly established (1988) Associa- failure. tion of Combatant Clerics that was In a meeting with a group of artists established. After his defeat in 2005 presidential and media activists he stated that “it election and in an attempt to fulfil is not possible to protect the sanc- In 1985 Seyed Ali Khamenei the shortcomings of his previous tity of society by sticks and clubs, it (currently the Supreme leader of campaign, he decided to form a is [only] through accurate and ra- Iran) was elected as a president. A political party. This decision was tional planning that society can be year before that the conservatives made in view of the fact that his guided toward prosperity and excel- had won a relative majority in the former organisation lacked the will lence.”(11) second Majlis election. Mosavi’s and the capability of effectively allies did not hold the majority any supporting him during the elections. It is yet to be seen if Karroubi is more and the rightwing of the Ma- Therefore he established his own going to practice what he preaches jlis was preparing a vote of no con- party, the National Trust Party and would actually provide his sup- fidence to his government. How- (NTP) Hezb-e Etemad-e Melli . In porters with a plan for after his be- ever, at the time it was Ayatollah addition to this he published a daily ing elected. But so far there are no Khomeini’s intervention which newspaper of the same name where signs of such decision. stopped the rightwing conservatives he and other high ranking members from achieving their objectives. of his party express their views. Mir-Hossein Mousavi was Iran’s Prime Minister from 1981 to 1989. In 1989 Iran’s constitution was re- For a while Karroubi became an He was the last premier of Iran be- viewed and amended. One of the outspoken critic of the reformist fore the position itself was elimi- amendments was to eliminate the agenda. He accused reformists nated in the amendment of constitu- position of Prime Minster. Since determined in their political views tion in 1989. Currently Mousavi is then Mir-Hossein Mousavi has re- of fanaticism. In return members of a member of the Expediency Coun- treated from the frontline of Iranian the Mosharekat Party and the Or- cil. He is also the head of Iran’s politics into academic artistic ac- ganisation of the Islamic Revolu- Academy of Art. tivities. His main positions since tion Mojahedin accused him of po- 1989 have been membership of the litical opportunism and lack of As Prime Minister Mir-Hossein Expediency Council and the head- sound judgment. They blame Kar- Mousavi was very much for state- ing Iran’s Academy of Art. roubi for splitting the reformist intervention. During his time in electorate in 2005 and accused him office he expanded state control Mousavi’s approach to the up- of taking this gesture only to please over economy. Subsidisation of coming presidential election: the establishment and avoid mar- food and basic commodities, expan- ginalisation. sion of state’s role in the foreign In 2005 Mir-Hossein Mousavi was commerce in addition to policies of approached by both Khatami and Whether we see him as a pragmatist land redistribution and land reform Karroubi to become the reformists’ or opportunist, Mehdi Karroubi has are all examples of his leftist ten- united candidate yet he disap- managed to expand his party ad- dencies. pointed his former friends and col- ministration both in the capital Te- leagues by refusing to enter the hran and provinces further a field. In the 1980s the Iranian political election. The NTP emerged above expecta- spectrum was divided into left wing tions in the 2007 Assembly of Ex- and right wing. Initially the left and perts election and enjoyed an aver- right were all gathered in the Is- Mousavi: A man of reform age performance in municipal and lamic Republic Party (IRP), but Majlis elections. These achieve- gradually the disagreements be- ments, though very modest, brought tween the two factions became un- some confidence to NTP headquar- bearable and ranged from differ- ters and encouraged Karroubi to run ences over the state’s role in the for president one more time. economy to serious disagreements over the authority of the Vali-e Election Campaigning Activities Faqih or Supreme Jurisconsult. Eventually in 1987 the party was So far, Mr. Karroubi’s approach to dissolved and the right and left the presidential election contest has wings of the party gathered around not differed significantly from that other organisations. While the right of other candidates. It seems that wing reorganised itself around the the same pattern of reaction instead already existing Combatant Clergy of action, and slogan instead of Association the leftist faction reas-

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Surprisingly, in 2009 Mousavi in- political pathologies and shortcom- 2. Among the presidential candi- sisted on running for president de- ings of the past thirty years. The dates in Iran there is a high ten- spite the fact that Khatami was al- document is full of preaching about dency to use catchy slogans and ready a candidate. Eventually what went wrong but when it comes mottos instead of presenting de- Khatami preferred not to compete to policy recommendations it does tailed election promises. against his friend and former col- not go beyond general advice.(15) league Mir Hossein Mosavi. Keep- Slogans can be eye-catching and ing his promise of “either me or Conclusion: appealing, yet at the same time gen- Mousavi” Khatami urged Mehdi eral and vague. It is easier to get Karroubi to unite his front with 1. Election campaigning in Iran has away with an unfulfilled vague slo- Mousavi in order to stop a vote split always been about personality and/ gan than a detailed election prom- in the reformist campaign. or ideology and rarely about elec- ise. Therefore accountability is one tion pledges. The notion of mani- factor which many candidates are In his first statement after festo as “official statements of the trying to avoid when refusing to Khatami’s withdrawal announce- intended policy issued by political provide manifestos that include ment, Mousavi presented himself as parties by the time of elections”(16) policies with numbers and figures. a principalist and a man of reform. is a strange notion both to Iranian He praised Khatami’s record as a politicians and the electorate. 3. One of the major problems with reformist president and promised to the Iranian opposition parties and support the development of civil So far in Iran, the documents that individuals is that they are more society. (12) were published at the time of elec- comfortable degrading the govern- tions were more concerned with ment’s record than offering an al- Furthermore, a group of Mousavi’s locating problems rather than pro- ternative policy. It seems that pol- allies have established an organisa- posing solutions. icy recommendation does not have tion called the Association of a serious role for Iranian political Monotheism and Cooperation We know that a manifesto does not parties. Yet one of the main func- (AMC) Jameyat-e Tauheed va necessarily include detailed policy tions of political parties anywhere Ta’avon. Recently they became recommendations. “They can be is to recommend policies. very active in organising confer- politically quite irrelevant, neither ences and gathering support for read by anyone nor influencing At the moment it seems that react- Mousavi’s nomination(13). Another elected party members, as with the ing to anything that Ahmadinejad step that was taken by AMC pre- ‘platforms’ issued by the US politi- says or does is the only thing that sumably on behalf of Mousavi was cal parties.”(17) the Iranian opposition is good at. the publication of 163 page Criticising Ahmadinejad is what “manifesto” named “The Guideline However the concern of this paper reformists do best. However what for Living as a Muslim” Olgoui-r is not over definitions: instead what they don’t do is to propose a policy Zist-e Mosalmani. (14) I have to say is important is to analyse the nature of their own next to any policy of that for a moment upon first hearing of presidential campaigning behav- Ahmadinejad that they are reject- about this “manifesto” I was very iour in Iran in order to find the rea- ing. For example Ahmadinejad’s happy since I thought that finally sons behind the candidates’ reluc- attempt to distribute the shares of the deadlock had been broken and tance to issue detailed election the major state owned company someone had finally realised the promises. among all Iranian citizens, was de- importance of writing a manifesto. spised as unscientific and ill pre- Whether we classify these docu- pared by many reformists, yet they To my surprise however I found out ments a manifesto or not is not of failed to provide any alternative that this “manifesto” was not what I significance here. In other words, policy which demonstrates how to expected. To be fair the document the concern is over the lack of sub- privatise the state owned companies offers an assessment of the socio- stance, not the form. in Iran.

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To summarise this idea, re- the election campaigning style of to be sceptical, however, if the his- actionism instead of pro-actionism Iran. tory of election campaigning inside is the common denominator of all Iran is anything to go by. opposition parties in Iran and whilst In remarks seen as highly critical of it is understandable that opposition the way the election campaigning is However if only one candidate pro- parties have to define their relation taking place, Ayatollah Mahdavi posed a detailed plan (be it for the to government policies (whether Kanni the Secretary General of the economy, finance, domestic or for- approvingly or disapprovingly) Combatant Clergy Association eign policy) the other candidates what is not understandable is their stated that “When both the masses will have to respond to his action failure to propose alternative poli- and elite want to elect someone, and in responding they will be cies and take the initiative of pro- they read his plan and if the an- forced to propose their own poli- posing precise policy recommenda- nounced program was of use they cies. tions in their own hands. will elect him.

5. Some reformist candidates are so Subsequently elections can not be obsessed with their own agenda that won with the use of foul language they fail to notice that Iranians’ or sabotage of the personality. Let main concern today is the economy. us suppose that the vulgar party has (18) In the last presidential election won, what will they do after the Dr. Mostafa Moein who was the top election? Swear at [others]?”(19) reformist candidate did not even bother to touch on economic issues. In a similar fashion, Hojjatol Eslam He came fifth while Mehdi Kar- Nategh Nouri another high ranking roubi, who made the famous $50 cleric in the regime said that “a promise, came third in the race. In party shouldn’t be clawing at others my opinion, presenting an eco- and should not always cry the nomic pledge in the upcoming elec- “anti” slogan…another point is that tion seems to be a priority for any [the party’s] positions with regard candidate who stands a chance of to economy, culture, domestic and winning the contest. foreign policy must be clear.”(20)

6. The entire situation becomes Finally we should keep in mind that clearer when we know that this time the presidential election is in June even some of the Islamic Repub- 2009, and the candidates still have lic’s prominent clerics have noticed plenty of time to offer their election that there is something wrong with manifestos or pledges. We are right Ariabarzan Mohammadighalehtaki

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Endnotes:

(1) Mohammad Khatami, Statement by President Mohammad Khatami Chairman of the Eighth Session of the Islamic Summit Conference Tehran, [http://www.abbc2.com/islam/english/islamwo/khatami.htm], 25 Feb 2009 (2) Mohammad Mehdi Afkari, Conservatives Challenge Ahmadinejad Over Economy, [http:// www.groundreport.com/World/Conservatives-Challenge-Ahmadinejad-Over-Economy], 20 Feb 2009 (3) Revealing Details of the Grand Economic Transformation Plan, [http://www.president.ir/fa/? ArtID=10391], 4 Feb 2009 (4) http://aftabnews.ir/vdchiqn6.23nkqdftt2.html (5) Seyed Mohammad Khatami,The First Meeting on Clarifying the Fundamentals of Reform, [http:// www.baran.org.ir/?sn=news&pt=full&id=1942], 14 Feb 2009 (6) Ibid (7) Ibid (8) Ibid (9) A Meeting with the people of Bushehr [http://www.baran.org.ir/?sn=news&pt=full&id=1935], 5 Feb 2009 (10) Khatami’s Answer to Ahmadinejad, [http://www.aftabnews.ir/vdcevo8v.jh8epi9bbj.html], 5 March 2009 (11) [http://www.aftabnews.ir/vdccm0q4.2bq0x8laa2.html], 28 Feb 2009 (12) Mir Hossein Mousavi, [http://www.kalemeh.ir/pages/5180.php], 17 March 2009 (13) The friends of Mousavi meeting, [http://www.khabaronline.ir/news-2137.aspx], 4 March 2009 (14) Mir-Hossein is very close to the Guideline for Living as a Muslim, [http:// www.entekhab10.net/1387/12/post-22.php], 5 March 2009 (15) Olgoui-r Zist-e Mosalmani, [the Guideline for Living as a Muslim], Tehran 2008 (16) David Robertson ed, The Routledge Dictionary of Politics, Routledge, London, 2004, pp 295-296 (17) Ibid (18) Iranians worried about economy, [http://news.bbc.co.uk/2/hi/middle_east/7827198.stm], 4 March 2009 (19) Etemad newspaper, [http://www.etemaad.ir/PDF/87-12-03/etemaadp02.pdf], 22 Feb 2009 (20) Ali Akbar Nategh Nouri, The party must not be clawing at, [http://www.tabnak.ir/pages/?cid=32141], 6 March 2009

Photos: M. Sadegh Dalvandi, Soltanabad.net, Montaghed.com

Centre for Iranian Studies—Durham University [email protected] Epiphany Term 2009 Policy Brief Page 11

Greatest Challenge for the Next President Economic asperities outbalancing Iran’s nuclear ambitions and its antagonism towards the United States

With a typical defiant and combat- estate was considered a safe invest- oil prices have put Iran in even ive manner, the Islamic Republic of ment with low costs and high inter- more immediate danger. Until mid Iran (I.R.I) celebrated the 30th anni- est. Since 2006 prices of real-state 2008, assessments suggested that versary of the 1979 revolution by and housing went sky-high while high oil prices would shield Iran's displaying the prowess and achieve- the capability to buy went to an all weakened economy for the next 3 ments of the past 3 decades. Masses time low (4), creating a dull market. to 5 years. of military personnel and civilians In addition, ordinary Iranians had to demonstrated in streets carrying deal with other detrimental finan- Now with oil prices stabilizing in models of Iran’s latest technologi- cial issues. According to official the range of $35 a barrel, Iran faces cal achievement, the homemade estimates, Iran has the highest infla- an enormous budget deficit of $44 Safir satellite (1); while Ahmadine- tion rate in the whole region at 25.6 Billion (7) which will put ordinary jad sanctimoniously decreed Iran percent (5). Many experts are skep- Iranians through suffocating hard- the world’s ‘Real Superpower’ (2). tical of this figure and estimate the ship in year 2009-2010. The gov- Some demonstrators were also keen inflation to be somewhere between ernment has no alternative other to express the never-ending conflict 35 to 40 percent. There is no doubt, than to decrease capital expendi- with United States. Not content however, that in the last 2 years ture; development projects will with the usual slogans of “Death to foodstuffs have experienced more suffer as will government’s ability America” the more militant demon- than 40 percent inflation (6). Iran’s to provide employment. Even if strators dressed several donkeys shrinking middle class and lower government cuts its capital expendi- with the American flag (3), empha- income classes in particular, the ture to zero, it still faces a deficit sizing that the I.R.I will not com- base constituency of Ahmadinejad, which leaves the state with the po- promise on its’ opposition litically dangerous necessity of against U.S, come what decreasing subsidies. Ahmadi- may. “Current economic challenges nejad’s disastrous economic could overshadow Iran’s nuclear policies and the extent of their But beyond the bravado and ambitions” long-term effects are subject to defiant front, those who independent reviews, but ar- were in Iran this winter guably his absolute disregard noticed a disturbingly grim mood were the main recipients of these for planning and the creation of gripping the country. The social shocks while at the same time gov- financial ambiguity have harmed atmosphere and political situation ernment subsidies suffered from Iran in both the short and long- leave much to be desired, but the decreased value due to inflation. term. greatest challenge threatening Iran’s stability lies within its ex- Challenges for the next president: The strongest opposition against hausted economy. In an overall Ahmadinejad's popular schemes view, Iran’s economy is in a very Iran’s current economic predica- comes from apolitical technocrats bad shape and similar to many ment is a product of decades of who form the backbone of coun- countries suffers from recession. poor planning, inefficient bureauc- try’s administrative management, While this is officially denied by racy and massive mismanagement. and it is from them that Ahmadine- Iranian government, recent reports These problems have been ampli- jad faces continuing “organizational of Iran’s Central Bank indicate a fied by the erratic policies of resistance” in all levels of structural sharp decrease in new investment Ahmadinejad and the isolation management. Ahmadinejad initially endeavors, increase of imports and caused by the nuclear dispute. The sacked many high-level directors decline of the stock market: all sig- next Iranian president will have to and ministers unwilling to accept nifying growing stagnation within address the following issues sooner his crude policies but soon resolved the economy. However, Iran has rather than later: to disband Iran's oldest and most been coping with stagflation since fundamental agencies responsible late 2005; sooner than even the Ahmadinejad’s economic legacy: for central planning altogether. For earliest signs of the current interna- example, the “Budget and Manage- tional recession. The dire state of Ahmadinejad’s reckless injection of ment Bureau” was reduced to a vice Iran’s economy is quite evident oil income into the Iranian econ- -presidency in October 2006 and within its internal markets, namely omy has created a serious problem the “Council of Currency and Allo- the housing sector. In the past, real- of liquidity, and recent decreases in cation” was dissolved in July 2007.

Centre for Iranian Studies—Durham University [email protected] Epiphany Term 2009 Policy Brief Page 12

Ahmadinejad granted the authori- ernment starved of revenue. Ac- necessary investment, Iran will fail ties of these bureaus to provincial cording to Mohammad-Reza Nema- to increase its oil production and governors and various Cabinet Sub tizadeh—until recently under- along with high internal consump- -Committees where he could prac- secretary of Oil Ministry- and Ka- tion Iran's income of crude oil will tice direct control. mal Denshyar -current chairman of drastically decrease. It is fair to Parliament's Energy Committee- state that the current state of Iran’s Furthermore, Ahmadinejad’s ad- only a few years ago Iran produced energy sectors is unsustainable. ministration deliberately obscured 6 million barrels of crude oil per financial estimates and statistics day. By the end of 2007 this was The nuclear debacle: through many accounting hat-tricks, reduced to 4 million barrels and at particularly by decreasing the usu- the current rate will further drop to I.RI leaders have persistently ally extensive annual budgeting to 3 million barrels by 2013. The more boasted that U.S led sanctions are brief summary books. This sham- pressing problem is that in light of ineffective on Iran’s state of econ- bolic method of budget writing ini- the current high and heavily subsi- omy. The case could have been tially aimed to bypass parliament dized internal consumption, Iran’s made that while Iran enjoyed high monitoring and increase govern- oil income will soon be overrun by income from oil and gas produc- ment’s power on allocation and costs of internal consumption. tion, these sanctions had only a expenditure, but it has also signifi- Without drastic measures, Iran may limited effect. The sharp decrease cantly contributed to the current even become a major oil importer in oil prices since November 2008 deficit problem (8). The latest con- within the next 15 years(10). have altered this previous balance. troversy over this financial ambigu- The energy sector’s low profit cou- ity was in February when Iran’s Iran's current energy situation is not pled with the current huge deficit “Supreme Audit Court” confirmed the result of the nuclear standoff’s makes Iran very vulnerable to cur- that over $1 Billion of Iran’s 2006’s imposed sanctions or Ahmadine- rent sanctions and any future exten- surplus oil income is missing! (9) jad's populist policies but is due to sions in the years 2009-2010. Due to these circumstances Iran’s decades of subsidized internal con- economy is a perfect example of the sumption, diminishing upstream oil Major English, German and Japa- so-called “Dutch Disease”. production, technological inability nese banks have complied to U.N Security Council Resolu- Iran’s Energy Situation and tion 1737, mainly to avoid need for new investment: Without drastic measures, Iran may U.S treasury punitive even become a major oil importer measures. In the past the In spite of having the second Islamic Republic has en- largest gas reserve in the within 15 years deavored to balance U.S world and the availability of antagonism by building foreign partners willing to risk in- and lack of new investment. There- closer ties with Russia and China. vestment, Iran has yet to reach fore, Iran needs huge investments in Indeed, China and Russia were able higher mass-production capacity various parts of its energy sector. In to decrease the severity of Resolu- and has extreme difficulties with 2005 Bijan Namdar-Zangeneh, tion 1737. Iran also viewed China fulfilling its existing contracts and Khatami’s Oil Minister, stressed and Russia as potential investors even in satisfying its own high do- Iran’s need for $150 billion of in- which would compel both countries mestic demand. Iran’s difficulties in vestment in a 10 year period in or- to provide political support to Iran utilizing its vast gas resources are der to avoid crisis(11). Zangeneh's in return of lucrative deals. In 2007 due to technical and managerial successor in Ahmadinejad’s gov- Chinese company CNOOC signed a shortcomings. The Iranian govern- ernment, Kazim Vaziri-Hamaneh, gas agreement worth of $16 Billion ment also allocates much of its im- confirmed this estimate and in 2006 (13). And since February 2006 Iran mediate reserves to support and announced that although close to has been in extensive negotiations subsidize old unprofitable indus- $38 billion had been invested in the with the state-owned China Petro- tries and wasteful pet projects. oil industry since 2003, another leum & Chemical Corporation to $120 billion investment should be finalize an energy deal potentially Furthermore, Iran faces pressing allocated to this sector before 2013 worth $100 billion for development concerns in its oil industry. Since (12). Hamaneh's tenure as Oil Min- of Iran's Yadavaran oil field (14). late 2004, Iran's oil experts have ister was short and he was dis- persistently warned about Iran’s missed for resisting Ahmadinejad's However, the nuclear debacle has diminishing oil income. They argue interventions and popular policies. affected Iran’s trade relations with that, should existing trends in up- Along with Hamaneh, Mahmud- even the politically friendly China stream output continue, the amount Reza Shoraka, Chief of “Central and Russia. Since 2007, Assadollah of oil Iran would be able to export Budget and Planning Bureau”, re- Asgharulady chairman of Iran- would be gradually eroded over the signed in protest as well. Shoraka China Chamber of Commerce has coming decades, leaving the gov- had also warned that without the constantly protested against restric-

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tions imposed on Iranian entrepre- Ahmadinejad has delayed this move for another revolution. neurs by Chinese banks (15). Iranian due to the resulting political un- leaders are fond of talking about popularity and repercussions of Conclusion: Iran’s special relations and strategic such an action on the eve of elec- alliance with China and Russia, but tion. Understandably, no candidate At the moment Iran faces a $44 in reality neither of these countries wishes to announce that his first act Billion deficit and is in need of has demonstrated any willingness as president will be the diminution $120 Billion if it wishes to structur- for such an alliance or for infinite of decades of government subsi- ally reform its energy sector. Fur- support of the Iran’s nuclear pro- dies. Nevertheless, at the current thermore, according to the current gram. Russia’s limited support has time this policy seems inevitable. Minister of Labour and Social Af- been rewarded by major conces- fairs, Iran needs to invest $3,700 sions over the energy resources of The same realities suggest an ex- billion to realize the outlined objec- Caspian Sea, a long-term loss for tremely dangerous horizon for any tives of its extensive “20-Year Vi- Iran’s national interests. Similarly, Iranian government in the years sion plan” (18). “Beijing provided a degree of sup- 2009-2010. Historically, all politi- port for Iran against U.S pressure, cal upheavals were trigged in times Despite the need for new invest- but has also limited its commitment of financial difficulties. In contem- ment, Islamic Republic leadership to Iran to minimize the adverse porary Iran this has usually been- has not yet demonstrated a willing- impact of ties with Iran on China’s manifested with an initial oil boom ness to surpass the political and links with the United States and the and government mismanagement ideological barriers hindering for- Arab and European States, and on causing high inflation: this was the eign investment. The constitutional China’s international reputation in case in the 1978 revolution. (17) prohibition over foreign ownership general.”(16) However, the current situation is of national energy reserves still more similar to the Rafsanjani stands and consequently so does the Unless Iran agrees to a political presidency in early 90s, when fi- 'buyback' contract model; obliging compromise on its nuclear project nancial downtime caused by low oil IOC's to surrender control of oil the U.S will certainly try to exploit income and high inflation trigged and gas fields after becoming op- Iran’s energy vulnerabilities. Iran’s violent unrest in cities of Mashahd, erational. There is relatively little dependence on petrol exports for Qazvin and Islam-Shahr. These so- incentive for IOC's to take a risk on internal consumption will be an called ‘blind riots’ had no clear investing in Iran when the returns obvious target for U.S efforts. The political motives and leadership; are so limited. The current standoff U.S will also increase its pressures they were social protests born out over Iran's nuclear programme has to dissuade potential energy inves- of political frustration and financial also added to Iran's energy prob- tors in Iran. With the current state hardship. Similar revolts will lems. Oil majors such as Shell and of the economy, continuing the probably occur in late 2009 and Total have become concerned that usual attitude of non-submission the political risks of in- will be highly risky for Iran. Iran’s dependence on petrol ex- vestment are not worth Iran’s buyback terms. It is Socio-political risks for the ports for internal consumption evident that Iran has to next Iranian president: will be an obvious target for U.S change its policies if it efforts wishes to attract new in- All signs and surveys confirm vestors. However, for the that financial difficulties are the past 30 years, the Islamic main concern of ordinary Iranians may have further complications for Republic has championed national and will be the most important fac- the Islamic Republic of Iran. A right and control over natural re- tor in the 2009 presidential elec- prelude to this occurred in June sources, using it as a means for tions. However, none of the candi- 2007 when the government’s sud- political legitimization. Changing dates have highlighted this as their den implementation of petrol ra- this policy in open will be embar- main priority or have provided spe- tioning caused brief but costly riots rassing and can put the initiator in cific planning for tackling these in Tehran. A new president with serious political difficulties. numerous problems. Other than the high approval rating can hope to historical roots of this approach, the postpone the immediate socio- The next Iranian President is there- main issue is that no candidate political threats but will have to fore left with the imperative deci- dares to disclose either the extent of break from many longstanding poli- sions of diplomatic compromise economic reality, or the necessary cies –of business as usual- if he and fundamental changes in finan- course of action to the public. Fac- wishes to tackle the growing financial planning and decision making. ing the immediate problem of defi- cial perils in the next 2 to 3 years. A compromise over the nuclear cit and low oil prices, the state is Equally, Ahmadinejad’s re-election program will provide Iran with left with no option other than to will cause immediate social up- some breathing space, alleviate drastically decrease subsidies. heaval and may even pave the way internal recession and encourage

Centre for Iranian Studies—Durham University [email protected] Epiphany Term 2009 Policy Brief Page 14

new foreign investment.

Much relies on direct negotiations with U.S and the fact that both sides have much to gain from successful and extensive negotiations. A frag- mented and partial compromise will only go so far given that the U.S effectively controls the limit of imposed sanctions on Iran and that much depends on severity of U.S punitive measures for those who wish to invest in Iran. As far as the need for new investments is considered, the United States is the prime candidate outweighing all other contenders.

In the long-run Iran has no other choice other than to compromise on its commitment to the controversial nuclear programme.

In the face of current economic challenges it can no longer afford high stakes gambling, as the country appears to slide towards a crisis. The necessity of direct negotiations with United States is desirable

Ehsan Abdoh Ahmadinejad’s re-election may cause significant social upheaval and unrest.

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Endnotes:

(1) Iran celebrates the 30th anniversary of Islamic revolution, guardian website http://www.guardian.co.uk/ world/gallery/2009/feb/10/iran-iranian-revolution?picture=343045677 (2) Resalat daily newspaper, 11 February 2009, p.1. http://www.resalat-news.com/Default.aspx? pap=216186 (3) Ibid http://www.guardian.co.uk/world/gallery/2009/feb/10/iran-iranian-revolution?picture=343053519 (4) Fars News Agency, 19 February 2006. http://www.farsnews.net/newstext.php?nn=8511010282 (5) BBC Persian, 15 January 2009. http://www.bbc.co.uk/persianbusiness/2009/01/090207_ka_inflation_iran.shtml (6) Central Bank of Iran’s Annual Report 2007-2008, http://www.cbi.ir/showitem/5962.aspx p.74 Tabnak Professional News Site, July 15, 2008. http://www.tabnak.ir/pages/?cid=13804 (7) BBC Persian, February 9th 2009, citing Iran’s parliament centre of research www.bbc.co.uk/persian/business/2009/02/090209_wmj-iran-deficit.shtml (8) Abdohtabrizi, Hossein. Bedat jadid boudgeh-nevisi, shenasayi soud wa maliayat mohum, Sarmayeh daily Newspaper, February 19th 2009, p.1http://www.sarmayeh.net/Archive.php?1387-11-30 (9) BBC, Persian, February 18th 2009, http://www.bbc.co.uk/persian/ iran/2009/02/090218_mg_court_lostbillion.shtml (10) Reported by Azar Jazayeri, Sarmayeh Daily Newspaper, 2 December 2009, pp.1 & 5 (11) Ibid (12) Ibid (13) BBC Persian, 11January 2007 http://www.bbc.co.uk/persian/iran/story/2007/01/070111_jk-china-iran- gas-deal.shtml (14) Michael Piskur, Iran's Nuclear Plans Complicate China's Energy Security, Power and Interest News Report (PINR) 13 March 2006. http://www.pinr.com/report.php?ac=view_report&report_id=456&language_id=1 (15) BBC Persian, 30 January 2008, http://www.bbc.co.uk/persian/business/story/2008/01/080130_he-china-iran.shtml (16) Garver, John W. China and Iran, ancient partners in a post-imperial world, University of Washington Press, 2006, p.125 (17) Abrehamian, Ervand, Iran Between Two Revolutions, Princeton Revolutionary Press, 1982, pp. 446 & 497 (18) Press TV, 30 August 2007, http://www.presstv.ir/Detail.aspx?id=21225§ionid=351020102

Photo: Iranian Students News Agency (ISNA)

Will voters want a dramatic change for Iran in 2009?

Centre for Iranian Studies—Durham University [email protected] Epiphany Term 2009 Policy Brief Page 16

About the Executive Director:

Dr Reza Molavi is the Executive Director of the Centre for Iranian Studies, at Durham University. Dr. Molavi is also the Executive Editor of The Iranian Journal of National Interest, and a Senior Research Associate at The Centre for Strategic Research, a unit of the Expediency Council of Iran.

From 2003-2006, Dr Molavi was the Editor-in-Chief of SGIA News, a newsletter published by the School of Government and International Affairs (SGIA) at Durham University. His current research interests are security issues, foreign policy, political economy and environmental policy in Iran and the Middle East. Reza's key publications include: An Assessment of the Political Will for Oil and Gas Privatisation in Iran (Durham, UK, 2007), Foreign Direct Investment is Good for Iran (Tehran: Iran Economics, 2004); The Privatisation of the Oil and Gas Industry in Iran (Tehran: Economic Trends, 2003).

About the Authors:

Ehsan Abdoh is a PhD student currently working in the School of Government and International Affairs at Durham University.

Ariabarzan Mohammadighalehtaki is also a PhD student working in the School of Government and International Affairs.

CIS Team Leaders CIS Interns

Ariabarzan Mohammadighalehtaki William Robert Carter Contemporary Iranian Politics Matt Narracott Payman Pourmohammadi Rana Daroogheh Ashkan Rahmati Ancient Persia David Bryn Roberts Mohammed Saleh Afshar Jennifer Thompson Mohammed Shareef Policy Brief Arlene Taylor Rachel Mari Thomas Afshin Shahi Reza Safiyari Arts and Culture Hesam Forozan Kemal Alam Eskandar Sadeghi Ehsan Abdoh Publications

Centre for Iranian Studies—Durham University [email protected] Epiphany Term 2009 Policy Brief Page 17

Past and Future CIS Events

Ferdowsi Lecture Iranian Theocracy & Democracy: Convergence of Contradiction? Date: 10 December 2008 Time: 11:00-16:00 Venue: Room 102, Al-Qasimi Building, Durham University Speakers: Prof. Charles Melville, Dr. Mohammad Rasekh, Dr. Ali Paya and Prof. Jalal Dorakhshah

Public Lecture Human Rights: A Universal Language? Challenge and Obstacles in Iran Date: 16 February 2009 Time: 12:00 Venue: Room 102, Al-Qasimi Building, Durham University Speakers: Ms. Roya Kashefi, Head of the Human Rights Committee at the Association des Chercheurs Iraniens

Professor A.K.S.Lambton Memorial Lecture Sex, Drugs and Rock n’Roll: Ethics, Law and Clerical Authority in post-revolutionary Iran Date: 04 March 2009 Time: 15:00 Venue: Room 102, Al Qasimi Building (Durham University) Speaker: Professor Robert Gleave

Iranian Nouruz Party Date: 14 March 2009 Time: 18:30 Venue: St. Aidan’s College, Durham University

Iranian Culture Week Date: 27 April 2009—1 May 2009 Time: TBA Venue: St. Aidan’s College, Durham University

Farabi Lecture Iran and the International System Date: 2-3 June 2009 Time: TBA Venue: St. Aidan’s College, Durham University Speakers: TBA

Lecture: Iran’s Presidential Elections of June 2009 Date: 4 June 2009 Time: TBA Venue: Room 102, Al-Qasimi Building, Durham University Speakers: Dr. A. Mohajerani , Minister of Culture, Under President Khatami Dr J. Kadivar, Al-Zahra University, Tehran

Centre for Iranian Studies—Durham University [email protected] Epiphany Term 2009 Policy Brief Page 18

The Centre for Iranian Studies attempts to present divergent ideas and sympathies by its contributors, while it does not necessarily represent the editorial boards own sentiments or beliefs. Some of our writers and readers may disagree with the views and opinions represented in this or other Policy Briefs. Articles published as part of CIS’s Policy Briefs are the sole responsibility of the authors, we do not accept responsibility for the views expressed in any articles, signed or unsigned, that appear in these pages. What we do accept is the responsibility for giving those writers and opinions a chance to express their views, for the sake of balanced and an unbiased publication of CIS's Policy Briefs.

The Editor

Notes:

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Centre for Iranian Studies—Durham University [email protected]