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Reflecting on Iran's Presidential Election

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I imagine the reason Mr. Mousavi never clearly explained his economic agenda was that he suspected that his ideas of economic liberalism would not have been very popular with the overwhelming majority of the Iranian people. Iranians had earlier experienced policies of economic liberalism under President Rafsanjani (1980-88), which was called "structural adjustment program." Judging by people's reactions to those policies, it is obvious that they did not care much for them.

It is no longer a secret that Hashemi Rafsanjani was the main pillar of Mousavi's presidential campaign. "Since he was defeated by Ahmadinejad in the presidential elections of 2004," points out Rostam Pourzal, "Rafsanjani has led a public crusade against the winner's zeal for social spending, which he characterizes as Gadaparvari, or dependency promotion." Using original (Farsi) documents, Pourzal further explains how Rafsanjani has for years been trying to modify Iran's Constitution in order to facilitate the drive to deregulation and privatization:

The powerful state Expediency Council, which Rafsanjani heads, led a reinterpretation of Article 44 of Iran's constitution that last June mandated a downsizing of the government in favor of private investors and contractors. The sale of state-owned industries is advancing faster than ever, and the introduction of private banking was followed late last year by the opening of the first foreign bank branch. . . . Yet Rafsanjani's powerful allies complain bitterly in public that Ahmadinejad loyalists in the bureaucracy impede progress towards the competitive economy envisioned in the new law.This year Mousavi adopted Rafsanjani's 2004 campaign pledge to institute "an economic revolution" in which improved efficiency would result from deregulation [10].

Mr. Mousavi expressed his economic agenda in short, cryptic and patchy statements that were scattered throughout his stump speeches and other campaign announcements. I sifted through almost all of those speeches and the one place, perhaps the only place, where I found all of his economic ideas together in one text was an article that appeared in the 25 May 2009 (4 Khordad 1388, Iranian calendar) edition of Jomhouri Eslami newspaper , titled "Mir Hossein Mousavi's Program for the Improvement of the National Economy." Briefly, the following are the main points of his economic reform agenda, as I have summarized and translated them from Farsi into English (I am confident my summary reflects his economic reform ideas accurately).

The first and "the key principle for the solution of Iran's economic difficulties," according to Mr. Mousavi's agenda, was "reform and redefinition of the executive branch of the government." This would include reducing the size of the public sector, curtailing social spending, and bringing transparency and discipline to financial policies of the government.

The second major principle in his economic program focused on ways to open more space for business activities of the private sector, and "to promote the role of this sector in the decision making process of national economic policies." Among other issues, this principle included adoption of policy measures that would expedite the process of market deregulation and revise constitutional "obstacles" to privatization of public enterprises. Combined with policy measures to curtail the public sector and the economic role of the government, these essential steps toward economic liberalization would be instrumental to the objective of "attracting foreign capital," his program maintained.

Within these general principles, Mr. Mousavi occasionally (and, again, very vaguely) spoke of reducing poverty and unemployment and increasing homeownership, without explaining how he would achieve these objectives. Judging by his overall philosophy of economic reform, it is obvious, however, that he would rely on market efficiency, managerial knowhow, and individual or entrepreneurial ingenuity to achieve these goals. At one point in his "Program for the Improvement of the National Economy" he writes, "Today most economists believe that, within certain ethical framework, individuals' pursuit of self-enrichment can lead to the collective well-being at the national level."

This is, of course, the prima-facie beautiful but actually misleading motto of laissez-faire economic doctrine, and the major justifier of the unregulated, trickle-down economic philosophy. It is ironic at a time when this deceptive economic doctrine, which promotes greed as a virtue, is wreaking havoc in the core capitalist world Mr. Mousavi is trying to promote it in Iran.

A recurring theme in Mr. Mousavi's economic agenda was bringing down the oppressively high rates of inflation in Iran, which he blamed on Ahmadinejad's government. Why? Because, he argued, Ahmadinejad's "out-of-control" social spending and/or subsidies to the poor and working classes gave them a strong purchasing power that, in turn, led to a strong demand and, therefore, high inflation. And what was his solution to bring inflation down? Simple: reduce the size of the public sector, cut social spending, and promote free enterprise and economic liberalism.

Both Mr. Mousavi's diagnosis of inflation (social spending) and his prescription for fighting it (cutting that spending) are based on major theories of neoliberal economics, which are religiously promoted by the IMF (International Monetary Fund) and WTO (World Trade Organization) throughout the world.

While Mr. Mousavi was sparing and ambiguous in terms of a positive policy agenda for change, he was quite openhanded and expansive on negative campaigning. In an unfair and obfuscationist manner, he blamed almost all of Iran's economic difficulties on Ahmadinejad, thereby overlooking the debilitating effects of economic and military pressures from abroad.

A great deal of Iran's economic problems such as inflation and unemployment are due to the suffocating imperialist economic sanctions and military threats. Since the 1979 revolution, Iran has been essentially under both an economic and military siege, ruthlessly inflicted by US imperialism and its allies. These destabilizing policies of economic strangulation have led to capital flight (both human and financial), hoarding and black-market activities by unscrupulous domestic capitalists, known as "economic mafias," and speculative investment in trade and real estate, instead of long-term investment in productive activities.

A product of the revolution and prime minister for eight years, Mr. Mousavi must be aware of these debilitating consequences of foreign interferences on the Iranian economy. Alas, he seems to be more interested in scoring political points against Ahmadinejad than abiding by the principles of fairness in judgment.

But then he also blamed Ahmadinejad and his "rash" foreign policy for the imposition of economic sanctions and military threats from abroad. Ahmadinejad's foreign policy has consisted of an uncompromising stance against the United States and its allies on the issue of Iran's legitimate right to nuclear energy, outspoken opposition to the colonial settler state of Israel, steadfast support for liberation movements in Palestine and Lebanon, and expanding friendly relations with revolutionary and progressive governments around the globe, including those of Cuba, Venezuela and Bolivia.

Mousavi and his campaign managers labeled Ahmadinejad's foreign policy as "adventurous" and "confrontational," blaming it for Iran's economic difficulties. Accordingly, they sought "understanding" and "accommodation" with the United States and its allies, presumably including Israel, in order to achieve political and economic stability. While, prima facie, this sounds as a reasonable argument (in terms of neoliberal economic solutions to Iran's economic problems), it suffers from a number of shortcoming.

To begin with, it is a disingenuous and obfuscationist argument. Military threats and economic sanctions against Iran did not start with Ahmadinejad's presidency, as argued or implied by Mr. Mousavi's campaign. They were imposed on Iran nearly thirty years ago, essentially as punishment for its 1979 revolution that ended the imperialistic US influence over its economic, political and military affairs.

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Ismael Hossein-zadeh is a professor of economics at Drake University, Des Moines, Iowa. He is the author of the newly published book, more...)
 

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Fairness and Objectivity by abe ramsay on Sunday, Aug 23, 2009 at 7:59:40 PM
Ismael : I only have one question from you ! by Bahramerad on Monday, Aug 24, 2009 at 3:57:19 AM