Iran General NewsAs Iran gets ready to vote, the economy dominates

As Iran gets ready to vote, the economy dominates


ImageNew York Times: In the West, Iran’s coming presidential election is viewed largely through the lens of President Mahmoud Ahmadinejad’s crackdown on social freedoms and his combative approach to Israel, the United States, and Iran’s nuclear program.

The New York Times

Published: June 10, 2009

ImageTEHRAN — In the West, Iran’s coming presidential election is viewed largely through the lens of President Mahmoud Ahmadinejad’s crackdown on social freedoms and his combative approach to Israel, the United States, and Iran’s nuclear program.

But here, as in so many other elections, another issue is seen as more important: the economy. Iran’s crippling inflation rate, unemployment, and the question of how its oil revenue is being spent are at the top of the agenda for most voters, analysts say.

The two main camps here see the issue in starkly opposed terms, with Mr. Ahmadinejad’s supporters saying his policies have improved things for average people, while all three of his challengers in the election on Friday insist that the economy is in serious trouble. Even when it comes to basic economic indicators, the two sides often present starkly opposed statistics and projections, leaving many voters confused about what to believe.

To some extent, both sides have a case to make: Mr. Ahmadinejad’s populist policies have enriched some segments of the population, but a longer trend of unemployment and economic stagnation is evident as well.

In his debates with other candidates, Mr. Ahmadinejad has held up graph after graph purporting to show that Iran’s economy is in splendid shape, cruising through the global recession that has ravaged much of the West.

In fact, growth has slowed sharply in Iran, which is heavily dependent on oil exports. The International Monetary Fund projects the country’s economy will expand by 3.2 percent in 2009, down from 4.5 percent in 2008 and nearly 8 percent in 2007.

During a debate on Saturday, one of Mr. Ahmadinejad’s rivals watched in disbelief — eyes wide, head cocked as though knocked off balance — as the president delivered a cheerful lecture about his good economic stewardship.

“Do you think I came from the desert, and that I don’t know anything about figures?” said the candidate, Mehdi Karroubi, his voice almost quivering with outrage.

Mr. Karroubi went on to dispute Mr. Ahmadinejad’s numbers, including his claim that inflation was at 14 percent, not the 23.6 percent reported this week by Iran’s Central Bank.

Other challengers have done the same thing, holding up their own graphs and reading litanies of gloomy statistics on job losses and slumping oil revenue.

Mr. Ahmadinejad did not invent the numbers, as his detractors claim, but he emphasized some data that suited his purposes and ignored other widely used indicators.

Inflation is about 14 percent when it is measured as the year-on-year change in prices, said Saeed Leylaz, an economist who was briefly a minister in the reformist government of Mohammad Khatami. But in Iran as elsewhere, inflation is usually referred to as an annualized average, or projected annual rate, based on the rise in prices in a recent month or quarter, and by that measure it is 23.6 percent, according to Iran’s Central Bank.

Measured either way, inflation is far higher today than it was four years ago, even as growth has slowed, undermining Mr. Ahmadinejad’s claim that the economy has improved on his watch.

Mr. Leylaz said that revenues from oil exports soared in the last few years, and that petrodollars pumped into the economy tended to fuel inflation rather than productive growth. The accusation that Iran’s oil wealth has been wasted is rooted in fact, he argued.

In addition, unemployment is increasing fast. It was 10.5 percent four years ago, and it is now 17 percent, Mr. Leylaz said.

“The problem is that Ahmadinejad has focused on the distribution of wealth, and what we need is the creation of wealth,” Mr. Leylaz said. With a disproportionately young population, Iran desperately needs more economic growth and more jobs.

Instead, economists say, Mr. Ahmadinejad has bought political support among the poor and lower middle class by increasing pensions and government workers’ wages. He has also handed out so-called justice shares of state firms that are selling stock to the public, and provided low-interest loans to young married couples and entrepreneurs.

Mr. Ahmadinejad’s rivals say the money should have been spent on creating jobs and improving Iran’s infrastructure.

Yet the populist policies clearly serve a purpose.

“He helps the poor, he supports the families of the martyrs and the wounded,” said Hassan Muhammad Zadeh, a 47-year-old veteran who had come to show his support at a vast Ahmadinejad rally on Monday.

Mr. Zadeh explained that his pension had more than doubled, to $500 a month, since Mr. Ahmadinejad came to office.

Others in the swelling crowd, gathered at an unfinished prayer hall in central Tehran, had their own stories of how loans and salary increases had cemented their loyalty to Mr. Ahmadinejad, who is widely seen here as simple man with a deep sympathy for the poor.

“Who says Ahmadinejad created unemployment?” said Hamid Nassiri, a 25-year-old from south Tehran who works in a market. “It’s not true at all. He is from the people, and he attends to the people’s needs.”

Those who oppose Mr. Ahmadinejad tend to be better off and more educated. Issues like social freedoms and Iran’s reputation in the world are important to them. Many also say his redistributionist policies, while popular, have undermined the economy.

“Ahmadinejad has destroyed the country,” said Bahram, a 23-year-old student in Tehran, who refused to give his last name because he said he feared repercussions for criticizing the president. “We need jobs. We want our money to be for us, not for Hezbollah in Lebanon.”

Nazila Fathi contributed reporting.

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