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Preelection polls dont match election results { June 27 2005 } Original Source Link: (May no longer be active)
http://www.businessweek.com/bwdaily/dnflash/jun2005/nf20050627_8840_db039.htmThe election results, which made a mockery of the preelection polls and analysis, should put the senior clerics on warning that beneath the surface much of the public is seething over poverty, unemployment, corruption, and other ills. "The new President represents a different type of reform," writes Anthony Cordesman, a Gulf security expert at the Center for Strategic & International Studies in Washington.
http://www.businessweek.com/bwdaily/dnflash/jun2005/nf20050627_8840_db039.htm
JUNE 27, 2005
NEWS ANALYSIS
By Babak Pirouz and Stanley Reed
A Watershed in Iranian Politics
With Ahmadinejad's election victory, conservatives now dominate the government. This may mean a more antibusiness and anti-U.S. stance
Just days ago, the Iranian business community inside and outside of the country was set to celebrate the election victory of their patron, Hashemi Rafsanjani. But in a runoff election on June 24, Iranian voters overwhelmingly chose Tehran's conservative mayor, Mahmoud Ahmadinejad, over the former President, who had promised probusiness policies and a rapprochement with the West. Ahmadinejad received 62% of the vote. Now people who had been lining up to invest in Iran are in deep shock.
The victory of Ahmadinejad, an Islamic nationalist suspicious of outsiders, capitalists, and technocrats, increases the risk of confrontation with the U.S. and the West on everything from the Islamic Republic's nuclear program to neighboring Iraq. The election's winner could also deal an economic setback to the country, which badly needs private investment and foreign technology and knowhow. Economic growth, which has been close to 8% annually over the last two years, has recently slowed to the 5% range as businesses worried about the upcoming election as well as growing tension with America.
REFORMERS' LOW. Ahmadinejad campaigned on a populist platform, blaming the emergence of private banks and Iran's very modest privatization program for the increasing income divide between the Tehran elite and the rural and urban poor. The politician also displayed isolationist tendencies, criticizing Iran's acceptance of World Bank loans and urging reliance on local capabilities. While Ahmadinejad is close to some of the top clerics, the landslide for him was in part a protest against the clubby religious establishment, which the portly Rafsanjani epitomized, that has run Iran since the 1979 revolution and is widely viewed as corrupt and ineffective.
The election results, which made a mockery of the preelection polls and analysis, should put the senior clerics on warning that beneath the surface much of the public is seething over poverty, unemployment, corruption, and other ills. "The new President represents a different type of reform," writes Anthony Cordesman, a Gulf security expert at the Center for Strategic & International Studies in Washington. It shows "an emphasis on Islamic socialism and economics, and a rejection of both the rich Bazaari merchant class, with its privileges and corruption, and the market-oriented technocracy."
Ahmadinejad's election could well be a watershed in Iranian politics. He is close to the Supreme Leader, Ali Khamenei, and his victory means the main levers of government -- the Presidency, the parliament, the judiciary, and the powerful Council of Guardians -- are in the hands of the conservatives, who have seen a resurgence in the last few years.
In contrast, the reformers around outgoing President Mohammed Khatami have hit a new low. They have been stripped of all powerful positions except for a small minority of parliamentary seats.
WILL COOLER HEADS PREVAIL? Ahmedinejad and his supporters may interpret his win as a mandate to pursue divisive, purist policies -- from tighter enforcement of Iran's Islamic dress requirements, such as headcoverings for women, to raising the temperature of confrontation with the U.S. over Iran's nuclear program, which may come to a head later this summer. During the campaign, he was the least enthusiastic of the eight candidates about improving relations with America, saying such a change was a low priority.
The new President may also purge key government departments, such as the oil and foreign ministries, of the relatively liberal technocrats who dominate there. The pace of signing new oil and gas deals may slow, and more emphasis could be given to awarding these projects to local players. Administrative problems may crop up because the conservatives just don't have the technocratic manpower to staff key economic positions.
The big question is whether the Supreme Leader, who is wary of exposing Iran to either domestic turmoil or foreign intervention, will caution Ahmadinejad not to rock the boat too much. An Iranian President does not have a free hand, and cooler heads in government may warn Ahmadinejad not to go too far.
Too much pressure on young people to curb their increasingly freewheeling lifestyles could lead to domestic strife. A wholesale assault on private business would blight the economy. Likewise, an Iran that steps up subversive activities in neighboring Iraq or is openly provocative over its nuclear work would risk damaging conflict with what is perceived to be a hawkish U.S. under President George W. Bush.
SERIOUS MISJUDGEMENT. While the hardliners are jubilant, Iran's reformers have a lot of soul-searching to do. They frittered away the eight years of outgoing President Mohammad Khatami's time in power without achieving much in the way of economic change. The group pursued self-destructive election tactics, dividing their votes among three candidates in the first round, held on June 17, and, as a result, got no one in the final round. The reformers were also reluctant to rally behind Hashemi Rafsanjani, a pragmatist who was damaged by allegations that he has grown rich from his long tenure at the center of power.
Rafsanjani also badly misjudged the situation. He put most of his effort into cultivating businesses and the elite, ignoring poor and rural voters. He never left Tehran, saying to the astonishment of most observers that he lacked the funds for trips to the provinces.
He did manage to achieve a narrow lead in the first round, partly through heavy spending. But in the second round, voters overwhelmingly rejected his arguments that the way to ease poverty and unemployment of 15% to 20% was to accelerate privatization and encourage more foreign investment.
Instead, they went for Ahmedinejad's promises to end corruption and protect workers and small-business owners. Yet Ahmadinejad's economic prescriptions are vague and nationalistic. Essentially, he pointed out problems without offering any real solutions.
OIL LARGESSE. Whether the election winner, who was born in 1956, has the skills and the policies to improve lives is a big unknown. Much less well-known than Rafsanjani, Ahmedinejad portrays himself as a simple man -- a portrayal the public obviously bought. A longtime member of the Revolutionary Guards, he was a frontline fighter in the war against Iraq. He has close relations with the basij, the several-hundred-thousand-strong religious police.
Ahmadinejad also holds bachelors and masters degrees in civil engineering and a PhD in traffic management, but he has failed to tame the traffic of Iran's capital in his two years as mayor. During his mayoral stint, he has emphasized Islamic and revolutionary values, making municipal employees feel that they have to dress and behave more conservatively. He has talked of requiring a separation of men and women in the workplace but seems to have backtracked on the idea.
As long as oil prices hold up, he will probably have the wherewithal to buy social peace with ever larger subsidies. But if oil earnings collapse and he fails to encourage more private investment, then he may soon become just as unpopular as Rafsanjani. For now, Iran's economic outlook has taken a turn for the worse.
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Pirouz is a correspondent in Tehran, and Reed is BusinessWeek's London bureau chief
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