The fact that the cordial relationship between Khamene-e and Ahmadinejad has broken down is a well-known fact in Iran

It is reported from Tehran, that Dollar has reached 20500 rials and gold coin is priced at 10,500,000 rials  and yet, there is no official assessment of what is going on in Iran. By contrast, every now and then, if and when an opportunity offers itself, Iranian politicians claim that the USA is falling apart!

In the last 12 months, rial lost about 50% of its value against the dollar, and hence, about $80 billion imports into Iran that would have required 867200 billion rials about a year ago, would now- on 23 January 2012- need 1,640,000 billion rials, a rise of nearly 90% in just one year. Needless to say, the unavoidable implication of this would be a sharp rise in inflation. On the other hand, the European Union has agreed to extend the economic sanctions on Iran’s oil exports and on its Central Bank. Iran’s initial response was anger and frustration, claiming that these sanctions would hurt the EU more than Iran. However, when implemented; sanctions would be a serious economic disaster for Iran. Iranian politicians, though, continue sleep walking. The notorious former information minister Fallahiyan advises the government that before the EU sanctions become operational; Iran should stop its oil export. That would increase the world price of oil and would make the EU to change its mind . Fallahiyan seems to have ignored the fact that if this was to be done, Iran’s sources of petro dollars would dry up and it is not clear what will happen to its increasing imports from the rest of the world. An un-named source close to Iran’s government claimed that the Central Bank of Iran has not a single penny in European banks, hence sanctions or no sanctions, it would have no impact. Having blamed the BBC and VOA for the current financial crisis, the Central Bank was also criticised for not taking the initiative by providing information.   An influential member of Majlis suggested that the best method for the management of money markets in Iran is a “dirty float system”, but the Central Bank has lost its desire to manage the currency market in Iran, hence, the current crisis. In his view, government‘s reputation has been seriously dented and invited Ahmadinejad to take charge of this affair . Tabesh, another member of Majlis, called it a “tsunami” which requires urgent action and criticised the government for its lack of cooperation with Majlis. He said Majlis invited government ministers to attend their session but they refused and did not provide any necessary information . An official of the Central Bank has advised people not to pay more than 7,000,000 rials for gold coins, otherwise they would suffer serious losses  , and yet, gold coin prices in Tehran keep rising. There are rumours that in several places, there were runs on banks, and the public demanded to take their cash out and were refused. It must be said that I am not sure if this is true.

A former Majlis deputy – Khosh-chehreh- who is now an economics professor at the University of Tehran has called on the security forces to deal with a “deviant group” who are trying to bring the Islamic regime down. No further details are provided. The editor in chief of Keyhan, Shariatmadari who is very close to Khamene-e  in his latest contribution, opens a new avenue claiming that a conspiracy to enhance the impacts of forthcoming economic  sanctions has been formed by some “ insiders”. In his view, the aim of these conspirators is to convince the public, that there is no way other than starting to negotiate with the USA . It could very well be a reference to Ahmadinejad and his supporters. The editor in chief of Resalat, another Tehran daily, Anbarloui went further than any other observers and has openly accused the government to have caused the crisis to increase its revenue to deal with its budget deficits and other financial shortcomings . Hossaini, Economics Minister rejected this view on a TV programme and even threatened to use court against those who are now “involved in a psychological war against the government”.  In the process, he accused Fars News Agency- very close to the Islamic Guards as being one of the culprits. The  Agency, in turn, responded by criticising the minister and saying that for more than a week, Hossaini who is also government’s economic spokesperson “was absent” and he would be advised to justify “ his absence” rather than blaming others . Mesbahi- Moghaddam, a Majlis deputy has held the government responsible for the crisis for failing to manage the currency market and has also made a reference to government’s attempt to raise its revenue and immediately dismissed this as being “very dangerous” for the system as a whole.   Whatever the real causes of the crisis in Iran, it seems that we are dealing with several “groups” who are trying to undermine the system.  Few in this political game offer any serious explanation as to why these groups or individuals may wish to see the demise of the Islamic Republic of Iran?  This said, whenever, pro-Khamene-e ‘s observers refer to the “ deviant group”, it is a coded language referring to supporters of Ahmadinejad, but Khosh-chehreh seems to have discovered another “deviant group” which is active in economic affairs . There is no doubt, the financial and economic situation in Iran is seriously critical. It is, nevertheless, too early to judge if it would lead to the collapse of the regime in Tehran, though, it is likely, but it is our contention that while economic sanctions are important, but the current situation is mainly the result of a dangerous game played by authorities in Tehran.

The fact that the cordial relationship between Khamene-e and Ahmadinejad has broken down is a well-known fact in Iran. It has been suggested by many, including Mottaheri, a current Majlis deputy that Ahmadinejad has helped himself with copies of a large number of security files kept on the influential politicians by the Information Ministry and has been covertly using them to get his way. It is rumoured that when following a case of embezzlement, authorities moved to arrest his first vice president, Rahimi, Ahmadinejad used some of these files on Mojtaba Khamene-e the son of the Supreme Leader- and has effectively stopped the arrest. It has been suggested that Ahmadinejad’s position was that if “corrupt” individuals should be arrested, then Mojtaba  Khamene-ee has no legs to stand on. At this stage, it is not possible to confirm if these rumours are true, but the way monitoring institutions, such as Majlis and the National Audit Office reacted to frequent cases of undermining the laws by Ahmadinejad in the last five years, may lend support to the idea that “snapping of files” may be in fact, true . Whatever that may be in the background, we argue that this dangerous game is going on in Tehran.  

The two main players, in our view, are Ahmadinejad and Khamene-ee but they are not openly involved and are playing using proxies. They seem to be trying to out-manoeuvre one another. Iran, a pro-Ahmadinejad daily has openly accused those who attacked the UK Embassy in Tehran to have caused the current crisis. In view of the forthcoming General Elections, this could be used to discredit those who are standing on a platform of supporting Khamene-ee. If the economic and financial situation deteriorates as it will, this could be used to persuade Iranian electorates- whatever number that might participate- not to elect the supporters of trouble makers into Majlis. They could only make the situation worse.  At the same time, it would further, open the avenue for serious negotiation with the West, a position that Ahmadinejad and his supporters are in favour, but Khamene-e and his supporters have consistently blocked in the last several years.   Earlier, we have mentioned that the editor in chief of Keyhan- a close associate of Khamene-e has used this line of argument in his latest editorial. At the same time, however, pro-Khamene-e observers refuted this, claiming that the government, instead of facing the fact, is trying to find an escape goat for its failed policies which are the root causes of current crisis. In a way, despite several years of total support given to Ahmadinejad by Khamene-e, it seems that Khamene-e, short of accepting it publicly that he was wrong, wish to convince the Iranians that Ahmadinejad would have another 18 months to two years to run but it would be a grave mistake to elect his supporters into the 9th Majlis for another four years. Ahmadinejad and his supporters, on the other hand, are arguing that the overall economic and financial situation is “ healthy” and the other side- those who may lost their influence and ability to seek rent- are contributing to the current tension in the market. What would eventually happen is very difficult to predict. Khamene-e, himself has so far made no intervention, however, some of his well-known supporters- Tovakkoli in addition to Keyhan’s editor in chief- have removed their gloves . Time would tell, but as the saying goes, “the future is grey and not orange”!
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After nearly 30 years of teaching, the author has retired in 2010 from his post at the University of Staffordshire. Currently he is teaching at Regent's College in London Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it