Ahmadinejad Contests Iran Vote One Handout at a Time (Update1)
By Ladane Nasseri and Henry Meyer
June 8 (Bloomberg) -- When Ahad Neysaghi needed a job, he wrote to Iranian President Mahmoud Ahmadinejad asking for help. He got a $27,000 low-interest loan from a state bank, bought his own minibus and was hired as a driver for a government ministry.
“Of course I’ll vote for him,” said Neysaghi, 27, from the western city of Kermanshah. “That he replied to my letter is valuable enough.”
Ahmadinejad, 52, has reinforced his support by touring the provinces and handing out cash on promises of redistributing oil wealth. Since taking office in 2005, he has visited each of Iran’s 30 provinces twice.
Rivals in the June 12 presidential election accuse him of mismanaging the economy and inflaming tensions with the U.S. and the European Union. Still, Ahmadinejad’s diligence in pressing the flesh may buttress his bid for a second four-year term.
“The West identifies with the more educated part of the Iranian population,” said Geneive Abdo, an Iran analyst at the Century Foundation, a New York-based research group. “They overestimate its influence, versus the more traditional, religious part of the electorate that backs Ahmadinejad.”
The president talked up his affinity for ordinary voters as he has toured poorer rural areas, where about a third of Iran’s 66.4 million people live. Ahmadinejad wooed ethnic Azeri Iranians in the northwestern provinces in July 2006 by reciting in Azeri a piece by the contemporary poet Shahriar.
‘Dignified Life’
His duty is to serve the people, he says.
“May thousands and thousands of Ahmadinejads be sacrificed for the Iranian population to live a dignified life,” the president told a May 22 rally in Tehran.
Supreme Leader Ayatollah Ali Khamenei, 69, has indicated his backing for Ahmadinejad. On May 18 Khamenei, who has the final say on all affairs of state, urged voters to shun candidates who might yield to “bullying Western powers.” Ahmadinejad supporters have cited Khamenei’s call for a president who “understands the people’s woes.”
Ahmadinejad enjoys an international platform that increases his domestic profile. His speech attacking Israel at an April 20 United Nations conference in Geneva, which prompted European delegates to walk out, resonated in Iran.
State institutions have been deployed to silence critics. Several anti-Ahmadinejad newspapers have been closed and bloggers arrested. On May 23, Iran temporarily blocked social networking Web sites Facebook and Twitter, used in presidential campaigns by former Prime Minister Mir Hossein Mousavi, 67, and another self-described reformer, Mehdi Karrubi, 71.
Oil Revenue
They argue that Ahmadinejad squandered revenue from record oil prices. The former Tehran mayor expanded handouts as oil jumped from $60 a barrel to a high of $147 last July. Spending on subsidized products such as sugar, wheat and cooking oils rose more than 50 percent from 2005 to 2007.
Overall subsidies, with energy the largest element, were 27 percent of gross domestic product in 2007. Though Ahmadinejad later proposed cutting subsidies, the plan is stalled in parliament.
The spending may propel the budget deficit to $46 billion this year, after oil prices plummeted as much as 78 percent from their peak to a low of $32.40 on Dec. 19. Even now, with crude at about $68 a barrel, Iran faces a shortfall and will do so unless oil rises to about $85 or $90 a barrel, according to the International Monetary Fund.
Rate Cuts
In addition, Ahmadinejad forced out two central bank governors within 13 months because they resisted his demands for cheap credit, and he has obliged state banks to lower interest rates to 12 percent from 14 percent and private financial institutions to 13 percent from a previous 17 percent.
The president’s “expansionary” policies fueled inflation, which reached 24 percent in January, the IMF said in a July report. It also said reducing unemployment, which was 10.5 percent in February, the most recent month available, would be difficult.
Ahmadinejad’s three challengers say that flaunting the country’s nuclear program and his confrontational rhetoric on Israel have backfired. The world’s fourth-largest oil producer, Iran is starved of investment to boost crude production by U.S. and UN sanctions imposed over suspicions it seeks nuclear weapons. Iran denies the program is for that use.
‘Adventurous’
Mohsen Rezai, 54, a former Revolutionary Guards commander, criticized the president’s “adventurous” foreign policy.
Because Rezai’s candidacy appeals to the same kind of voter as the president, he may hurt Ahmadinejad, increasing the chances of a second-round vote on June 19, said Farideh Farhi, an Iran expert at the University of Hawaii. The incumbent needs at least 50 percent to avoid a runoff.
Still, Ahmadinejad may have core support of 12 million voters, Farhi said. Majid Farahani, a Mousavi adviser, gave a higher estimate, of 14 million, from an electorate of 46.2 million. Given a 60 percent turnout -- the second-round figure in 2005 -- the backing of 14 million voters would give Ahmadinejad the 50 percent of the vote he needs.
Voter participation may be much higher and even reach a record this week, the state-run Fars news agency cited the head of the country’s election committee, Kamran Daneshjou, as telling reporters today. No figure was given for the possible turnout. The highest number was 79.9 percent in 1997, when Mohammad Khatami won a landslide victory.
In Kermanshah, Ahad Neysaghi talks up his benefactor. “I’ve told my friends, and it spreads through word of mouth,” Neysaghi said. “It influences them to support the president.”
To contact the reporters on this story: Ladane Nasseri in Tehran at lnasseri@bloomberg.net; Henry Meyer in Dubai at hmeyer4@bloomberg.net.
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