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Broken promises

Yalda Zarbakhch / bk
June 12, 2013

President Mahmoud Ahmadinejad will leave his successor with an economically weakened and internationally isolated country. After eight years in charge, his record on domestic, social and labor issues is patchy.

Mahmoud Ahmadinejad, Präsident des Irans erleidet eine Schlappe im Machtkampf mit dem Parlament. Zugeliefert am 21.6.2011 durch Mahmood Salehi. Quelle: Fars
Mahmud Ahmadinedschad Schlappe im MachtkampfImage: Fars

Mahmoud Ahmadinejad made big promises when he took office in 2005. He said Iran's oil income "would make itself felt at the dining table of every single family." On top of that, the new president said he would create two million new jobs every year, bring unemployment to zero, and lower the inflation rate to under 10 percent. Eight years later, at the end of his second term, the reality is much more sobering. According to official figures, inflation is at 30 percent, unemployment at around 12 percent, and economic growth is negative. And these statistics are likely to be embellished.

Iranian economic expert Fereydoun Khavand believes that Ahmadinejad had no real economic policy when he took power. "The only plan he pursued - if you can call it that - was based on populism," he said, though he admits Ahmadinejad did realize some of his populist policies, such as subsidies for the rural population, or so-called marriage money for young couples.

Iranian rial notes in a box Source: Shabestan.ir Licence: Frei
The rial has lost two-thirds of its value against the dollar since 2011Image: Shabestan.ir

Currency depreciation and stagnation

But the promises that Ahmadinejad was not able to keep include creating a stable exchange rate for the Iranian currency, the rial. Since 2011, the rial has lost two-thirds of its value in comparison with the US dollar, further pushing up inflation. The inflation rate was at 12 percent when the Iranian president took office, now experts and international organizations estimate it to be at anywhere between 40 and 60 percent. In particular the prices for food, rent, and public transport have risen dramatically.

At the same time, Iran's economy is on its knees under the pressure of western sanctions. Before Ahmadinejad's accession to office, the growth rate was at around 7 percent, now it is negative, though the International Monetary Fund says there is the prospect of a slight recovery in 2014. "Without growth, no jobs can be created," explained Khavand, pointing out that of the two million new jobs per year that Ahmadinejad promised, only 14,000 have materialized.

Foreign policy priorities

Before reinforced international sanctions drastically reduced Iranian oil exports in 2012, the country boasted a comparatively high oil income for several years. But these revenues were channelled to the wrong places, argues Khavand. A large proportion paid for the import of goods while Ahmadinejad's government apparatus was also expanded. Then money was poured into Iran's foreign and security policy agenda: "So foreign organizations and groups close to the Islamic republic were supported, like Hezbollah in Lebanon and Palestinian Hamas," said Khavand.

Iranian President Mahmoud Ahmadinejad (L) and Palestinian Hamas premier of Gaza, Ismail Haniya (R) flash the victory sign to the crowd during the 33rd anniversary of the Islamic revolution in Azadi (Freedom) Square in southwestern Tehran on February 11, 2012 in which Ahmadinejad said that Iran has broken the "idol" of the Holocaust underpinning the creation of the Israeli state and US hegemony. Photo by Vahdati Isna/ParsPix/ABACAPRESS.COM # 308168_009
Ahmadinejad has poured money into helping foreign groupsImage: picture alliance/abaca

The economist sums up Ahmadinejad's tenure as "catastrophic years for the Iranian economy," that were exacerbated by international sanctions and "homemade failures and mismanagement."

Iran's fragile constitution

At a political level, on the other hand, the end of the Ahmadinejad era has been riven by internal power struggles. "The eight years of the Ahmadinejad administration have brought to light the fragility of Iran's constitution and system of government," exiled regime opponent Mehran Barati told DW. He argued that it has become clear that the president, the head of the Iranian executive, has no chance of governing the country alone - even though he is chosen by the country's highest religious leader.

"With the conflicting claims to power, it will be difficult to find a common path for the country to follow," said Barati. Despite this, the activist does not expect any fundamental changes in domestic or in foreign policy, particularly in the conflict over Iran's nuclear ambitions, he said. "The ideological moment is so strong in the Islamic republic right now, so that, regardless of who is elected to succeed Ahmadinejad, the conflict with the international community will continue."