New York Times: Rents are soaring, inflation hovers around 17 percent, and 10 million Iranians live below the poverty line. The police said they shut 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. The New York Times
By MICHAEL SLACKMAN
Published: September 5, 2007
TEHRAN, Sept. 4 Rents are soaring, inflation hovers around 17 percent, and 10 million Iranians live below the poverty line. The police said they shut 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 hardships, political repression and international isolation as the nations top officials remained defiant over Irans 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.
Paradoxically, President Mahmoud Ahmadinejads economic missteps and the animosity generated in the West by his aggressive posture on the nuclear issue have helped Irans leaders hold back what they see as corrupting foreign influences, by increasing the countrys economic and political isolation, said economists, diplomats, political analysts, businessmen and clerics interviewed over the past two weeks.
Pressure from the West, including biting economic sanctions, over Irans nuclear program and its role in Iraq have also empowered those pushing the harder line.
The leader is concerned that any effort to make the country more manageable will lead to reform and will undermine his authority, said Saeed Leylaz, an economist and former government official of the countrys supreme leader, Ayatollah Ali Khamenei.
The effort to keep Irans doors to the West sealed tight was on display on Sunday, when Mr. Ahmadinejad announced that Iran had developed 3,000 centrifuges and mocked the West for trying to press Iran to stop uranium enrichment and slow its nuclear program.
On Monday, Ayatollah Khamenei used Western pressure to rally public sentiment. Iran will defeat these drunken and arrogant powers using its artful and wise ways, he told a group of students, according to state-run television.
The caustic remarks were seen here by Western diplomats and political analysts as an attempt by the president, through the supreme leader, to undermine months of careful negotiations between more pragmatic conservatives in the leadership and the International Atomic Energy Agency, which only days earlier had insisted 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, insisting on 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 Irans go-it-alone approach began with Mr. Ahmadinejads election two years ago. He laid down a series of erratic economic decrees that he said were aimed at helping the poor, but instead have often made their lives harder.
Recently, the head of the central bank and the ministers of oil and industry resigned, warning that the country was heading toward trouble. The presidents 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 unprecedented income from the sale of crude oil. Ultimately, those interviewed agreed, the president has continued unimpeded because he has the support of Ayatollah Khamenei, who has the final say in all state matters.
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 a former president, Ali Akbar 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, economists here say Mr. Ahmadinejad fails to understand the effect of his policies. He feels the pain of the poor, but doesnt have any solution, said Ali Rashadi, an independent economist. He is wrecking a system that was patched together over 25 years.
Many journalists, academics, and former government officials said they thought Mr. Ahmadinejad had been more active and reckless with the economy than Ayatollah Khamenei had expected. But he is comfortable with Mr. 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 a velvet revolution, those interviewed here said.
A Western-allied ambassador here said the supreme leader and the security services decided to arrest Haleh Esfandiari, an Iranian-American scholar, partly as a warning to Iranian insiders 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 recently was removed from his teaching position at Tehran University. They see Ahmadinejad as the man to return Iran to these values.
He added, Whats important for them is being in power.
When Mr. Ahmadinejad was elected, he campaigned as a sort of Islamic Robin Hood, promising to redistribute the countrys 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 secure.
In another case, Mr. Ahmadinejad decided that the price of cement was too high, so he ordered that reduced, too. Mr. Rashadi, the economist, said the decree frightened away investors who had planned to build cement factories around the country. Mr. Rashadi said the presidents 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 Vadan, a meandering hillside community of about 9,000 people an hour outside of Tehran. I thought it was going to get better under Ahmadinejad, but it didnt.
But with its oil revenues, the government has, in the short term, been able to buy itself out of an economic meltdown with $60 billion spent on subsidies and a huge increase in imports though that has undermined local manufacturing, Iranian economists said.
Oil revenue has also helped shore up the government by enriching a new ruling class made up of Revolutionary Guard members and members and alumni of the Basij militia who have their hand in nearly every aspect of the economy, and now the government, people here said.
The presidents 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; today it is worth over $1 million.
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.
However, despite the current environment of fear and caution, he insisted: Of course I am optimistic. What is there not to be optimistic about?
The economic upheaval has been coupled with a far-reaching security clampdown over recent months. 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 once-powerful political figures, like the former president, Mr. Rafsanjani, who are out of step with the current trend.
The arrests include a once-prominent insider and former nuclear negotiator, Hossein Mousavian, on spying charges in May.
The repression is calibrated. Students and female activists have been encouraged to leave the country or face stepped-up 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, Mr. Ahmadinejad 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 where the conference took place. They said they were homeless and collected bottles to earn 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 government salary, the equivalent of $131 a month.
It was a better situation before, he said. My wife has cancer and I cant afford the medicine. I havent been able to pay my rent in five months. My rent is $250 a month. I dont know what to do. I am begging.
The net effect of Mr. Ahmadinejads policies can be seen in the village of Vadan. Suddenly, property values have gone up so much that a local man, Ghalan Abbas Mahmoodi, opened a real estate office. Farmers are selling off land, and wealthy people from Tehran are building villas on scenic hills overlooking the rolling countryside. For those who do not own land and have seen their rents soar, such as Mr. Khalili, it is a near catastrophe.
Mr. Mahmoodi, the real estate agent, had a different view. As my income increases, my purchase power increases, he said.
While Mr. Ahmadinejad 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, the president said, and I also get important economic information from him.