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Spendthrift Amadinejad faces criticism
Posted by: McQ on Friday, October 31, 2008

You may remember reports of Iran's leaders gloating that the financial meltdown was God's punishment being visited on the West (and specifically the US).

What they apparently didn't foresee while gloating was that the price of oil would drop like a rock, from its high of $147 a barrel, to its present $65 a barrel.

And guess who is at the center of the criticism?
Iran plunged this week into a bitter storm of political recrimination, largely directed at President Mahmoud Ahmadinejad, as officials and ordinary Iranians realized with shock that the Islamic republic faces a severe economic crisis of its own.

The reason: As oil prices plunge because of the global slowdown, Iran is caught in a classic crunch. Ahmadinejad's government failed to save enough of the billions in oil windfall it earned during the good years to now cushion the bad.

The same crunch afflicts Venezuela and to a lesser extent, Russia, as all three struggle with falling oil prices.

But in Iran, the economic crisis has quickly turned political. Economic woes are the key issue as Ahmadinejad — already deeply unpopular and suffering from exhaustion, he said this week — seeks re-election next summer in a tough vote. And they are shaping up as his weakness.
Couldn't happen to a nicer and more deserving guy.
Critics say he has recklessly squandered Iran's oil windfall on costly, subsidized imports, from fruit and other goods to the gasoline the country must buy overseas because of a refinery shortage, while failing to take any needed reforms.

"The Iranian people got a golden opportunity in history. But it was buried under this government's wrong policies," said Mohsen Safaei Farahani, a former lawmaker and reformist economist.
How bad is it?
Among the dire statistics made public this week: The government may have as little as $9 billion left in its hard-currency reserve, the rainy-day fund set aside to bolster the currency, import goods or pay off debt, according to one official, an ally of the president, who gave that figure to newspapers.

Other officials immediately disputed that, saying Iran still had closer to $20 billion or $25 billion in the fund.

But the relatively low figures shocked the country, leading one state agency to send an investigative report to Iran's supreme leader, Ayatollah Ali Khamenei, and parliament Monday, accusing Ahmadinejad's government of financial violations. Among the accusations: His government unlawfully withdrew money from the fund.
Ahmadinejad faces a reelection campaign in June, and if the economic prognosticators are right, this isn't going to be much better by then. About the only thing which would save him, or at least soften the internal criticism, is a large increase in the cost of a barrel of oil and those windfall monies again flowing into the Iranian treasury. If not, we could see a new Iranian president in July of '09 - and hopefully a much more moderate one than Ahmadinejad.
 
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Its more than just Iran’s past gloating about the West that makes this poetic justice.

The slowdown is tied to the world instability and uncertainty that they are largely responsible for.
 
Written By: jpm100
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If not, we could see a new Iranian president in July of ’09 ...
That or an attack on ’the little Satan’ to distract attention.
 
Written By: Achillea
URL: http://
But with Ahmadinejad gone, who’s going to be the new right-wing boogieman? Oh wait we’ll be knee deep in President Obama by then, never mind.
 
Written By: TomD
URL: http://
But with Ahmadinejad gone, who’s going to be the new right-wing boogieman?
Right-wing?

Miss all the primary debates, Tom?
 
Written By: McQ
URL: http://www.QandO.net
Because if there is one thing economic crises bring, it’s political moderation.

On a more serious note, a cash starved Iran might be willing to suspend enrichment for a serious carrot, and weak oil reduces the temptation to cheat on the sticks somewhat.
 
Written By: Joe Canadian
URL: http://
Critics say he has recklessly squandered Iran’s oil windfall on costly, subsidized imports, from fruit and other goods to the gasoline the country must buy overseas because of a refinery shortage, while failing to take any needed reforms.
They consider fruit to a costly import? Jeez, what up with that?

Also - I find it amazing they have no refining capacity. Talk about missing the boat... We should take note of that should we ever start ’drilling here’. We need refineries to make the gas.
 
Written By: meagain
URL: http://
Time for a quick whack at Israel and then it’ll be ’blame the joooooooooooooooooooos" for all outcomes, whatever they may be.

After all it’s unlikely to be good, or to fix their problems.
(Kinda like CO2 limits to stop global warming)
 
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