It’s the economy, stupid

The Council on Foreign Relations has a great interview with Virginia Tech economics professor, and visiting scholar at Brookings, Djavad Salehi-Isfahani, on Iran’s economic issues and how they are based on failed economic policy by the 9th administration, rather than being caused by international sanctions. He discusses particularly economic issues within Iran that Ahmadinejad did not fix, and how these issues, such as weak support for private industry and using high oil prices to import rather than build infrastructure for self-sufficiency, consistently harmed the economy.

I think this also harms the Revolutionary ideology of self-sufficiency that the regime speaks of so much. When populist demand for lower prices on goods goes up during economic prosperity, so do cheap imports, hurting Iranian jobs and industry. The cheap foreign producer wins against the local quality.

But what is most interesting about what Mr. Salehi-Isfahani mentions is the poor response from the election candidates towards a rhetoric of economic reform. The economy is one of the big issues they tend to have free reign to discuss, since the most pressing issue of foreign policy vis-à-vis the US is off the table for them. But Mr. Salehi-Isfahani wonders:

…to what extent this is a problem with a lack of sophistication of the campaigns, and to what extent a lack of sophistication of the voting public about economic matters. Iran has become a very complex economy in terms of its operation, but the level of understanding of the people of how the economy functions lags behind. There was one Iranian website–a conservative website–that complained that these presidential candidates are insulting people by not giving them good information and clear plans about the future. I agree with that. I think that both Mr. [Mehdi] Karroubi and Mr. [Mohammad] Khatami, when he was running, and the new entrant, Mr. [Mir-Hossein] Mussavi, have not been very specific about what is wrong with the economy and how they would fix it. When asked by an interviewer, Mr. Mussavi singled out the dismantling of the Management and Planning Organization as the major problem. But it is way down on the list of problems that I would consider serious.

To start with, 2.3 million of the 3 million people who are unemployed in Iran are under the age of thirty. That is a huge problem. You have the future of a country, which are these 15 to 29 year old people-most of them educated; a lot of them with a high school or university education, but are unable to find work. This is supposed to be the demographic gift of this nation, something that happens once in history, and it’s being squandered.

Or maybe [politicians] know this is a very difficult issue, and they just wish it would go away. So I haven’t seen anyone address this particular issue that I think is the number-one issue of the country.

The reason why Ahmadinejad has lost his popularity with the electorate is because he has failed in his economic promises. Not just because of oil prices falling, but also because he hasn’t changed anything to benefit the long-term. But does the long-term matter so much to the electorate? I think it does more than Mr. Salehi-Isfahani leads us to believe. Although he is certainly correct that the candidates aren’t using this to their advantage. The economy is complicated, of course, but during times of crisis people tend to become ‘experts’, and a good candidate should be able to spell out economic issues in populist terms like Ahmadinejad did in 2005.

If these new candidates, conservative or liberal, are to compete with Ahmadinejad on solid issues rather running against his plummeting popularity, it is time to treat the populace with respect and tell them what new economic models or alternatives they can provide. The voters are not as disenfranchised as some may imagine. They’ve avoided some elections, such as the last two, but with the major issues on the table such as Iran-US relations and the struggling economy, signs are showing that they know this election is one of the most important in years.

Ahmadinejad still has a chance as the incumbent and possible primary Principal-ist candidate so they need to ramp this discussion up extensively, get in his face over it, and put the message to the people.


~ by The Common Man on March 26, 2009.

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