Ahmadinejad Critics Let Fly as Iran Seeks Scapegoat for Economy

Iran’s currency crisis has emboldened critics of Mahmoud Ahmadinejad who are lining up to pillory the president and lay down markers for next year when his successor will be elected.

The rial has slumped as much as 40 percent against the dollar since August, leading to spiraling inflation, as U.S. and European sanctions curb Iran’s oil output and cut off the flow of hard currency. Protests against the rising cost of living broke out in Tehran’s markets last week and police used tear gas to disperse them.

The prospect of wider unrest adds to the pressure on Iran’s clerical rulers, who used force to suppress protests after Ahmadinejad was re-elected in 2009. The president has been under fire in the past for rhetoric that stoked tensions with the West. Now he’s being scapegoated for his management of the economy.

There “would be a long queue for the opportunity to push Ahmadinejad under the bus,” said Anoush Ehteshami, professor of international relations at Durham University in the U.K. “Iran is now facing its greatest crisis in two generations, and in those situations incompetence cannot hide under a rock.”

Israel has threatened military attacks on Iran to prevent it gaining atomic weapons. The U.S. also hasn’t ruled out using force to that end, raising concern that a conflict in the Persian Gulf, home of the world’s biggest oil reserves, could disrupt supplies. Iran says its nuclear program is peaceful and its economy is being unfairly targeted.

Robin Hood

Potential candidates in next June’s vote such as Parliament Speaker Ali Larijani are piling blame for the economic collapse on Ahmadinejad.

Larijani, a former nuclear negotiator who quit after a dispute with the president, said that bad management is responsible for 80 percent of Iran’s economic problems, and “Robin Hood methods” haven’t helped the country.

He was referring to efforts under Ahmadinejad, who pledged to spread oil wealth more equally, to shift universal food and energy subsidies toward cash handouts for poorer Iranians. While the program was praised by the International Monetary Fund, critics say it stoked inflation, which Larijani says was higher than the official rate of 23.5 percent in August.

Lawmaker Elias Naderan slammed Ahmadinejad for inaction in the face of the currency’s slide. “I really don’t know what Mr. Ahmadinejad is thinking,” Naderan said. “What plan does he have?” Mousa Reza Servati, the head of Parliament’s budget committee, accused Ahmadinejad of not admitting to a single mistake during his seven-year presidency.

‘Without Accountability’

Lawmakers are calling for Ahmadinejad to be summoned to answer questions about the currency turmoil. In March he became the first president in the Islamic republic’s history to be hauled before the assembly and forced to defend his record. His allies lost ground in parliamentary elections.

Ahmadinejad’s role in drawing all the criticism may be convenient for Supreme Leader Ayatollah Ali Khamenei and the clerics, said analysts including Karim Sadjadpour, an Iran expert at the Washington-based Carnegie Endowment for International Peace.

Khamenei is the ultimate decision-maker on nuclear and foreign policy. The president’s sway in those areas is limited, meaning Ahmadinejad’s departure won’t necessarily lead to policy changes.

“Khamenei’s modus operandi is to wield power without accountability,” Sadjadpour said. “To do that, he needs a president who has accountability without power.”

Potential Successors

A former Khamenei protege, Ahmadinejad has clashed with the supreme leader during his second term, and there are signs he is out of favor. On the day Ahmadinejad addressed the United Nations General Assembly last month, his press adviser was arrested back home.

Khamenei’s foreign policy adviser Ali Akbar Velayati is seen as a possible candidate to succeed Ahmadinejad. So is Mohammad Baqer Qalibaf, the mayor of Tehran. Predicting who will get the job is difficult, as candidates must be approved by the Guardian Council -- a group of clerics and jurists -- based on criteria including their Islamic faith and adherence to the theocracy’s principles. The final list of approved candidates usually isn’t released until a few weeks before the election.

At a Tehran press conference on Oct. 2, Ahmadinejad signaled he won’t bow out quietly.

“Doesn’t anyone else in this country have shortcomings, only the government?” he asked his critics, blaming the economy’s difficulties on a “psychological war” carried out by Iran’s enemies.

‘Living Hell’

The president’s ability to influence policy between now and the elections, groom an ally for the race or maintain a power base of his own are being undercut by the flood of criticism, said Gala Riani, head analyst for the Middle East at London- based Control Risks.

Ahmadinejad’s life may turn into “a living hell between now and the elections,” though it’s unlikely his term will be curtailed by impeachment, Riani said.

Nor is it likely that a change of president will bring the improvements that Ahmadinejad’s critics are calling for, said Ali Ansari, director of the Institute of Iranian Studies at St. Andrew’s University in Scotland.

“I don’t think anyone believes that Ahmadinejad on his own is to blame, or that a change of president will make much difference,” he said.

To contact the reporter on this story: Ladane Nasseri in Dubai at lnasseri@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.