The Intersection of Three Failures

In the name of God
The Intersection of Three Failures
One: Mr. Khamenei, the Leader of the Islamic Republic, has had three specific policies for Mr. Ahmadinejad and his government. These three policies are:
1. In the foreign arena, the policy of fleeing forward
This means that one must take an aggressive stance toward the Western powers, especially the Americans. Both in the nuclear affair and among the countries of the region, particularly Iraq and Afghanistan, one must be on the offensive, and in that case the Westerners, especially the Americans, will retreat. On this basis, while gaining popularity among the Iranian nation and the Muslim nations, one can also hold the upper hand at the negotiating table.
2. In the domestic arena, the policy of the iron fist
This means that one must stand firm against the people and show that the people must fear the government. If under previous governments the people managed to make gains in the areas of freedom of expression and civil institutions, it must be shown that the helmsman now has a different policy.
3. In the economic arena, the policy of bringing oil money to the people's tables
This means that previous governments devoted too much attention to infrastructure projects. Relying on oil revenue and imports of cheap goods, one must attend a little to people's livelihoods and, by injecting oil money, try to create an atmosphere like that of the 1970s under the Shah, and, as the saying goes, look after the people's bread and meat.
Two: Over the past two years these three policies have been implemented to the letter by Mr. Ahmadinejad's government, and the result has been failure in all three, as follows:
1. In the foreign arena, not only did the world not back down, but favorable conditions were created for America to take over the leadership of the Europeans as well in dealing with Iran and, through a series of measures, to have two sanctions resolutions against Iran passed unanimously in the UN Security Council. A third resolution, far harsher and more stringent, is on the way. Moreover, the heavy presence of American aircraft carriers in the region has brought Iran to the brink of war. The Americans have also taken action independently of the United Nations and, relying on their economic and banking resources, have imposed a banking blockade on Iran. Trade and banking transactions with Iran are gradually becoming more difficult, and so far Iranian merchants and industrialists are paying somewhere between six and twelve percent more on each purchase from abroad in order to make their purchases through intermediary banks, most of which are in Dubai. These restrictions are also making investment in Iran more difficult by the day.
2. In the domestic arena, pressure on academics, workers, teachers, women, the press, and all civil activities has increased. Along this path the government has been forced to resort to the language of violence. Since "he who sows the wind shall reap the whirlwind," this wave of violent repression is also preparing the ground for violence by the people, and the people are gradually being pushed toward expressing even their simplest protests in the language of violence. The story of gas stations being set on fire in protest against the government's unplanned gasoline rationing is the latest example.
3. As for the economic arena, the Shah's reckless injection of oil money into Iran's economy in the 1970s left behind three immediate side effects: inflation, recession, and corruption. All three have appeared in Iran's economy over the past two years in a broader and more destructive form, especially since Mr. Ahmadinejad, through successive mistakes in the monetary and fiscal spheres, has further fueled the spread of these three ills. Inflation has now reached a dangerous threshold, and the danger of runaway inflation threatens the country. The influx of cheap foreign goods, paid for with artificially cheap oil-derived foreign currency, has deprived domestic factories of the ability to compete and has put many production units at risk of closure. In an inflationary economy and amid a climate of crisis in foreign and domestic policy, investment has stagnated more than ever, and as a result the unemployment crisis has worsened. In addition, with the monopolization of political power at the top of the sprawling state apparatus and the institutions affiliated with the regime, especially the military and security institutions, conditions for corruption have been created that are gradually engulfing the pillars of the state, and one should expect Mr. Ahmadinejad's government to become the most corrupt government since the Constitutional Revolution.
Three: The failures of these three wrong policies are gradually approaching the point where they intersect. The main engine and powerful driver pushing these three policies toward the intersection of failure is the economic sector, but the mistakes in foreign and domestic policy add to the severity of the crisis.
One should expect that, as its next step, out of fear of international sanctions and further inflation, the government will intervene in the distribution of goods and try to control the consumption of some goods by rationing them (something it thinks it has accomplished with fuel rationing, though it is mistaken). This will further exacerbate the shortage of these goods. One should also expect a repetition of the classic mistake of all totalitarian regimes in economic matters. That is, in the next step the government will begin resorting to force to control prices. The groundwork for this has already been laid in the housing sector. Soon the government will begin uncovering traitors and foreign mercenary agents in the economy, and official news will probably be filled with reports of the discovery of hoarders and conspirators who, on the orders of foreigners, have hoarded goods the people need, even rental homes; a number of them will probably be arrested or even executed, and the blame for high prices will be laid on them. This will further fuel shortages and high prices, recession and corruption, and will drive the government toward greater violence in economic matters and against the people.
No exact date can be given for the point at which these three failures intersect. That is, one cannot predict precisely when international pressure, domestic violence, and the economic crisis will reach the peak of mutually intensifying one another, but from this autumn onward one should expect the curve of movement toward the peak of the crisis to grow steeper.
In another piece, God willing, I will address how the opposition should play its role in this coming crisis.
Mohammad Mohsen Sazegara
11 Mordad 1386 (2 August 2007)