It’s the Economy, Ahmadinejad!

The photogenic Iranian president may be mugging for the world’s cameras—his smile has become ubiquitous—but he has much to frown about back at home.

Thanks to Iranian President Mahmoud Ahmadinejad, the Farsi chant “Enerjiye hastei, haghe mossalame mast,” meaning “Nuclear energy is our undeniable right,” has become the standard for Iran’s demonstrating crowds. With this talk of Iran’s nuclear ambitions—as well as Holocaust denial—you almost could forget that Ahmadinejad floated into office in 2005 on his promise to solve the country’s economic woes.

So why is Ahmadinejad so defiantly confronting the international community on the nuclear issue? The dominant reason is a domestic one: A nuclear program is clearly easier to achieve than the economic gains. Ahmadinejad wants his countrymen to share his mythical belief that transforming Iran into a nuclear power will move it “50 years along the path of progress”—technologically and economically. The nuclear cause célèbre also has other bonuses. For a Shia president at the helm of a Shia country, it bolsters Ahmadinejad’s credentials in the Sunni Arab world and ensures unprecedented media attention everywhere he travels. Ahmadinejad’s stance also raises his profile in non-Arab Muslim countries, such as Malaysia and Indonesia, where the West’s silent tolerance of Israel’s nuclear arsenal is viewed as unfair and hypocritical.

The photogenic Ahmadinejad may be mugging for the world’s cameras—his smile has become ubiquitous—but he has much to frown about back at home. Despite having one of the best-educated populations in the Middle East, especially in the fields of science and technology, the Islamic Republic of Iran is an economic shambles. Forty percent of its 70 million people live below the poverty line, and inflation and unemployment are at 15 percent. When asked about major economic or industrial feats, an Indian can point to the country’s thriving information-technology sector and burgeoning middle class. But although numerous Iranian immigrants head top technology companies in the United States, Iran’s own IT sector is minuscule. Even the mighty, nationalized oil industry that Iranians once took pride in is falling apart, its production capacity declining by as much as 10 percent a year. True, like their president, many Iranians blame the West, especially the UN sanctions that forced countries to stop supplying nuclear materials to Iran, but the majority hold the ruling regime squarely responsible for the sorry state of the economy.

They’ve got a point. Ahmadinejad campaigned with the following slogans: “Cut off the hands of the mafia” in the oil sector and “Put oil money on the table of every Iranian family.” But the only noticeable difference at the oil ministry has been a change in personnel: Now it is his friends who plunder. As a candidate, he promised to fight poverty by reducing expenditures on luxuries and goods, citing as government waste former Iranian President Mohammad Khatami’s 10-day trip to Africa in early 2005. But Ahmadinejad has been on so many foreign trips that Tehranis now quip that his wife has moved her kitchenware into the presidential Boeing 707 so that she can cook for him in his second home. Meanwhile, the poor—who were mainly responsible for bringing Ahmadijehad to power—continue to worry about how to heat their homes if the government goes ahead with its plan to cut gasoline subsidies.

Which brings us back to Iran’s right to develop nuclear power, that clever cudgel that Ahmadinejad wields to make his mark in the Muslim and developing world. His timing is excellent: Saddam Hussein’s demise has created an opening for a new strongman willing to challenge the United States. It is a far more successful strategy than playing the Holocaust-denial card, which one could argue has been counterproductive: Many Muslim political figures distanced themselves from Tehran’s infamous Holocaust denial conference last year.

The consenquences of Ahmadinejad’s rhetoric are dire. The Iranian people view the current Bush administration as militant, and they have become increasingly concerned about the threat of military action. This perception is shared by foreign companies, which are understandably unwilling to invest in Iran. In fact, many businesses are transferring their funds out of Iran to the United Arab Emirates. There is even speculation that Russia’s unwillingness to complete the Bushehr nuclear plant is directly related to Moscow’s concerns about an impending war with Iran.

I believe that the military option will always be there—along with other options—as a tool to coerce Iran to suspend its uranium-enrichment program and to get back to the negotiation table. But Washington should keep in mind that the use of force may very well backfire and cause Iranians to become more nationalistic. In 2006, Ahmadinejad’s impotence on the domestic front and his confrontational attitude toward the international community over the nuclear issue earned his political allies a beating in the elections for the Assembly of Experts. I suggest the hawks in Washington seriously consider the option of sitting tight and letting the Iranian people give Ahmadinejad the boot at the polls in 2009.

Meir Javedanfar is an Iranian-born Middle East anyalst based in Israel. He is the co-author of the upcoming The Nuclear Sphinx of Tehran: Mahmoud Ahmadinejad and the State of Iran.