Iran Focus Editorial
By Hamid Irani
Any democratic government, or at least a stable one, would have been well capable of transforming such wealth into economic prosperity for its people. The lack of such prosperity is a clear consequence of a lack of democracy, accountability, and rule of law in Iran.
The ruling mullahs are notorious for flouting human rights. In December, for example, the UN General Assembly voted to condemn systematic violations of human rights in Iran. Similarly, the mullahs are known for disrespecting and defying UN Security Council resolutions with regards to their nuclear program.
But they also violate economic norms and laws. A regime which executes minors and stones women to death is no candidate for free market economics. That is why for nearly three decades, Iran’s economy has been fraught with corruption, inefficiency, and lack of investment for long-term development projects. It has been designed to safeguard the interests of the theocratic regime, which bears absolutely no similarity to a liberal democracy.
Though Iran’s economic woes essentially stem from widespread systemic and structural deficiencies such as a weak private sector and severely hampered domestic production, the particular policies executed during Ahmadinejad’s tenure have added overwhelming pressure to such a feeble edifice.
Faced with domestic and international pressure, Ahmadinejad has sought to concentrate economic decision-making power into his own office. During his tenure, he initiated significant sweeping and over-night changes.
In 2007, for example, Ahmadinejad dissolved the “Management and Planning Organisation.” The latter was a 70-year-old macro economic planning body charged with annual budget preparations. It was replaced by a division at the office of the presidency, thus bringing it directly under Ahmadinejad’s control.
The most vital decisions of Iran’s Central Bank are now dictated by Ahmadinejad himself. Last year, following a presidential decree, government banks reduced their interest rates, inviting criticism from financial circles. Not surprisingly, the Bank’s governor resigned in August 2007.
Under a president embellishing himself by populist antics, liquidity, inflation, corruption, and unemployment have sky-rocketed. Since 2005, liquidity has more than doubled from $72.3 billion in 2004 to $148.9 billion in 2007, according to the Associated Press.
A rise in imports has left many independent manufacturers bankrupt. Furthermore, according to Tehran’s official estimates, inflation has soared to 23 percent. Independent observers put the figure closer to 30 percent. Housing prices in some parts of Tehran, for example, have jumped seven-fold.
With an unfavourable investment atmosphere, Iran has been drained of nearly 200 billion dollars in capital. The Tehran Stock Exchange has lost nearly 20 percent of its value since Ahmadinejad came to office.
All this has obviously created a devastating livelihood for the Iranian people. Millions of people have been left with mind-numbing poverty and unemployment, which have inevitably led to a sizable increase in social ills such as petty crime, drug addiction, and prostitution.
The Iranian people have been all but quiet about this. According to published statistics, various sectors of society have carried out more than 240 acts of protests against the Iranian regime last November alone. In response, the regime has increased the number of public executions – nearly 300 hangings since January – and stepped up its crackdown on human rights by arresting hundreds of thousands of youths under bogus pretexts such as “mal-veiling.”
During recent months, university students exhibited amazing courage by holding more than 60 anti-government demonstrations and gatherings. Most notable among them was the December 9, 2007 demonstration at Tehran University, during which students chanted “death to dictator” and “freedom is our inalienable right.”
The fact of the matter is that under the mullahs’ rule, the vast oil wealth is a curse for the Iranian people because it is not infused into structural development for economic progress. It is rather spent by the mullahs on their nuclear program and fundamentalist activities in Iraq and the Middle East at large. Economic progress in Iran has thus become wholly dependent on political transformation.
Such transformation cannot be achieved by appeasing the mullahs or persuading them to change their behaviour, a miscalculated policy the West has pursued in the past 28 years. The entire regime must be replaced with a government that is representative of and responsive to the demands of Iran’s 70 million people.
