The Decline of Ahmedinejad

Iranian President Mahmoud Ahmedinejad may be gaining support across the Muslim world for his fervent criticism of the United States, but inside Iran, he is losing strength. His political rivals are gaining new positions of power, and the population is increasingly unhappy with the economy’s continuing decline.

Since its inception, the Islamic Republic has had a weak presidency; ultimate authority rests with the Supreme Leader, first Ayatollah Khomeini and now Ayatollah Khamenei. The Islamic Republic’s first president, Abolhassan Bani Sadr, was dismissed from office a year after his election. Ever since, the regime has been intolerant of a strong president, and has repeatedly demonstrated that the office is subservient to the Supreme Leader.

Ahmedinejad’s election two years ago came with great expectations, with the new president pledging to “bring oil prices to the dining table of all households in Iran,” and to crack down on corruption. Yet many of his first appointments were rewards to his supporters and cronies in the Islamic Revolutionary Guard Corps and the Basij militia, armed groups that mobilized voters on his behalf during the campaign. For example, an the Oil Ministry gave a $1.3 billion no-bid contract to an oil company associated with the Revolutionary Guard, and Ahmedinejad appointed his brother-in-law as cabinet secretary.

Steps like these may have been overlooked in better economic times. But the Iranian budget is now running a 15%-of-GDP deficit, and foreign reserves are shrinking, despite the oil boom. Instead of distributing oil revenues through a program of low-cost loans, as promised, the government has been forced to ration gasoline, as economic promise has given way to crisis.