Wednesday, November 02, 2005


A tutor for the president (Haaretz, November 2, 2005)

By Zvi Bar'el

Hartford University, as opposed to the University of
Hartford in the United States, is a virtual college that operates on the
Internet and grants academic degrees, from bachelor's to doctorates. It is
the college where Ali Saeedlou, the designated oil minister of Iran,
studied, and where he received his Ph.D. "Designated," because the
conservative Iranian parliament, the body that is supposed to give its
full backing to the new president, Mahmoud Ahmadinejad, decided at the
conclusion of a lengthy debate, which lasted more than 30 hours, to reject
the appointment.

The reason was not the doctoral degree he received from
the online university, which of course teaches in English - the language
of the Great Satan - but his lack of experience in oil affairs and the
concern that he could lead Iranian oil policy to the brink of disaster.
This was the official reason, which in itself was enough to prevent the
appointment. The other, non-official but no less powerful reason is the
creaky relationship between the president and the parliament. In the less
than three months since his election as president in June, Ahmadinejad has
managed to get on the nerves of numerous members of parliament,
particularly those who head important committees, such as energy and
national security.

For example, these members of parliament claim that the
government, in other words the president (Iran has no prime minister), is
not responding to their requests, and is not initiating legislation to
improve the economic situation. Similarly, they contend, his new
bureaucracy is at odds with their plan to wipe out poverty. Instead, it
prolongs the administrative corruption, as he attempts to appoint
individuals who served with him in his previous posts as the mayor of
Tehran and as an intelligence officer in the Republican Guards.

One of Ahmadinejad's associates, the conservative MP
Ahmed Tawakli, was quoted by the Fars news agency as saying that "absolute
support for Ahmadinejad is liable to lead to an administrative breakdown
of the state." But more importantly, Iran is beginning to realize that
Ahmadinejad could cause strategic damage to the state. And this does not
refer to his statements about Israel. They are only the latest example of
the damage, which led to the ensuing "correction speech" by Hashemi
Rafsanjani and the response of the Iranian foreign ministry, in which
spokesmen underscored Iran's commitment to the UN charter, and especially
the positive attitude of Islam toward Judaism and Jews. For Ahmadinejad
this is a no less severe slap in the face than the parliament's decision
not to confirm four of his proposed cabinet appointments, or parliament's
enactment of a law to reduce gasoline imports, which Ahmadinejad's
government should have initiated but did not.

Oil shortage

The main criticism of Ahmadinejad stems from the fact
that Iran is now under immense international pressure, from which it seeks
to extricate itself in order to gain some strategic objectives: continued
construction of its nuclear reactors without outside interference, and the
building of an economy - especially an oil economy - that will not bring
it to bankruptcy 20 years from now. Iran's economic data is at first
glance impressive: Approximately 13 percent of global oil reserves lie
under its territory, it earned about $30 billion this year from oil
exports, and in recent years evolved from a state that owes money into a
state that can pay in cash for its projects.

The bad news is that even according to official Iranian
reports, at current production levels, unless Iran invests large amounts
of money to develop its oil fields, within 20 years it will be unable to
export oil, and will consume all its production locally. Since the
Khomeini revolution, Iran has produced about 4.5 million barrels of oil a
day, about 2 million barrels less than production levels prior to the
revolution, due to the sanctions that led to the corrosion of equipment
and the curtailment of investment in development of the oil industry. In
recent years, national oil consumption has increased by some 5.2 percent
annually, and Iran is already forced to import gasoline at a total outlay
of $5.5 billion a year, as its refineries are unable to refine the amount
required for domestic consumption. It is estimated that Iran needs an
investment of about $4 billion a year in order to increase its oil
production and develop its refineries.

Given the situation, a clever Iranian parliament cannot
accept an oil minister who lacks a full understanding of the oil economy
and whose experience amounts to having managed the finances of the Tehran
municipality for Ahmadinejad. Nor can such a parliament agree to a
populist policy in which the president wants to hand out approximately
$1,000 to every couple that marries, and by this means prevent unrest
among the younger generation. This is a generation that is less interested
in revolutionary ideology and wants to hear its government say when they
will be getting decent jobs. Based on the outcome of the last five-year
plan, the previous regime, under Mohammed Khatami, managed to create only
2.9 million jobs, about 700,000 less than planned and about 1.5 million
less than needed even to begin to wipe out unemployment, which affects
mainly young people and university graduates.

With populist planning like Ahmadinejad's, it is hard to
see not only how Iran will break free of its economic difficulties but
also how it will create an opportunity for local and foreign investors to
up their investments in the state. For example, sources in the Iranian
opposition report that since Ahmadinejad's rise to power, private capital
along the lines of $200 billion has fled the country, and has been
invested in real estate and stock exchanges in the Gulf states,
particularly in the United Arab Emirates. And if it is difficult to
receive any conformation of such a report, it is sufficient to observe the
Iranian stock market, which has plummeted by 20 percent since June.

The result of all this is that the spiritual leader, Ali
Khamenei, has decided that Ahmadinejad is still in need of a "tutoring
period," and recently appointed Hashemi Rafsanjani as the tutor. He is the
man that Ahmadinejad beat in the election. Rafsanjani, who is himself a
past president of the state and speaker of parliament, now serves, as
well, as chairman of the State Expediency Council, an appointed body that
has been assigned the job of bridging the gap between government policy
and parliament legislation, and is essentially the supreme arbiter when it
comes to government policy. Rafsanjani, who appointed the outgoing
president Khatami to a senior post on his council, is well aware of Iran's
international dilemmas and its need to enlist investors, as well as the
necessity of not stepping on the toes of Europe and the U.S. This also
explains why it was Khamenei and not Ahmadinejad who has now issued
statements on nuclear development, since Ahmadinejad's pronouncements
caused the countries of Europe to join in the demand to have the Security
Council vote on the Iranian question.

The fruits of pressure

Ahmadinejad is now feeling pressure from the Iranian
power centers, as did his predecessor Khatami. However, this time the
pressure is coming from Ahmadinejad's cohorts, and even from the group
that supported him in the election. He now realizes that as president he
cannot set policy on his own, that he cannot rely on parliament to support
him unconditionally, and he cannot even issue pronouncements against
Israel without someone in the Iranian regime intervening.

Interestingly, the counterresponse to the international
condemnations of Ahmadinejad's anti-Israel statements was delivered by
Rafsanjani, who in his Friday sermon in Tehran spoke about the great
respect that Islam in general and Iran in particular feel for Jews and for
Judaism, emphasizing, "We have a problem only with Zionist circles in
Israel, which we see as being responsible for the repression of the
Palestinian nation." This is the same Rafsanjani who in 2001 claimed that
Israel could be destroyed with a single nuclear bomb, with minimal damage
to the Muslim world. But now he is in a different position, as someone
opposed to Ahmadinejad and once again close to Khamenei, and especially as
someone who would like to present himself once again as a reformer in the
next election.

The pressure on Ahmadinejad is already having an effect.
This week, he dismissed Iran's ambassadors in Britain, Germany and France,
claiming that they were not up to the task of alleviating the global
pressure on Iran. But more importantly, he threatened to tell the public
in Iran how Rafsanjani is thwarting his programs. And when this is the
threat voiced by Ahmadinejad, it can be assumed that he is beginning to
climb the wall of conflict with the conservative but pragmatic
establishment, which is itself astonished to see him as the president of

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