In June of 2005, the more radical conservative elements on Iran’s Guardian Council helped to engineer the election of President Ahmadinejad, hoping that his fervor would ignite a religious revival and take the country out of the hands of the “original” radicals who used their positions to personally enrich themselves at the expense of the Iranian people.
What Ahmadinejad referred to as the “petro-political mafia” dominated the permanent bureaucracy in Iran for a quarter of a century, lining their pockets with proceeds from oil revenues while using some of that money to grease the skids for their political masters. And the number one recipient of this bounty was former President Ayatollah Rafsanjani who is reported to be the richest man in Iran. Through a network of family and cronies, Rafsanjani concentrated economic power into his own hands during his two terms as President. He waged a war against the left wing Islamists who sought to oppose him by placing economic decisions into the hands of special committees and government bureaucracies.
What Rafsanjani did more than anything was fill the ministries with allies. But this cronyism had one redeeming benefit; they were relatively competent technocrats. In this way, they assisted him in his efforts to dip his beak into a variety of economic pies.
One of his biggest corruption efforts involved a convoluted kick back scheme with Norway’s state run oil company. It is said that Rafsanjani personally oversaw many of the foreign contracts signed by the Iranian oil ministry just to make sure he got his cut.
Enter President Ahmadinejad and his radical brethren who believed that religious fervor was a good enough substitute for competence in running a ministry. By November of last year, Ahmadinejad had sacked hundreds of competent officials in every ministry of government in an unprecedented “anti-corruption” purge:
The rise to power of Mahmoud Ahmadinejad, a former Revolutionary Guards commander, as Iranâ€™s new president last year entailed a sweeping purge of hundreds of senior and mid-level officials in the countryâ€™s burgeoning bureaucracy. Supporters of Ahmadinejadâ€™s two predecessors, Ali-Akbar Hashemi Rafsanjani and Mohammad Khatami, have been fired from key positions in all the ministries, embassies, state banks, and other governmental institutions.
The purged officials include dozens of ambassadors and diplomats, all but one of the ministers, and more than three quarters of deputy ministers, department directors, and provincial governors, according to a confidential government report obtained by Iran Focus. Many of them have been replaced by several hundred officers of the Islamic Revolutionary Guards Corps (IRGC) seconded to government positions.
Rafsanjani has publicly rebuked the massive purges, but sources inside the Iranian government say he and Khatami have no clout to withstand the onslaught by hard-liners under Supreme Leader Ali Khameneiâ€™s leadership.
Hard-liners justified the first waves of the purges as the â€œneed for fresh blood after 16 years of misgovernmentâ€ by Rafsanjani and Khatami. In many cases, rampant corruption among officials close to the two former presidents was given as the reason for the reshuffle.
The results of the purge were entirely predictable; the Iranian oil ministry, for example, is being so badly run, that the country is losing enormous amounts of money and may reach a zero revenue stream by 2015:
Iran is experiencing a staggering decline in revenue from its oil exports and, if the trend continues, income could virtually disappear by 2015, according to an analysis released yesterday by the National Academy of Sciences.
Iran’s economic woes could make the country unstable and vulnerable with its oil industry crippled, Roger Stern, an economic geographer at Johns Hopkins University, said in the report and in an interview.
Iran earns about $50 billion a year in oil exports. The decline is estimated at 10 percent to 12 percent annually. In less than five years, exports could be halved and then disappear by 2015, Mr. Stern predicted…
The shortfall represents a loss of about $5.5 billion a year, Mr. Stern said. In 2004, Iran’s oil profits were 65 percent of the government’s revenues.
“If we look at that shortfall, and failure to rectify leaks in their refineries, that adds up to a loss of about $10 billion to $11 billion a year,” he said. “That is a picture of an industry in collapse.”
The analyst is quoted in the article as saying, “What they are doing to themselves is much worse than anything we could do.”
Be that as it may, this information also gives rise to the idea that if this is true, then the Iranian nuclear program should be seen as an actual necessity and not as a choice of the mullahs to become a regional superpower. In fact, the analyst makes that very case in the article:
The analysis supports U.S. and European suspicions that Iran is trying to develop nuclear weapons in violation of international understandings. But, Mr. Stern said, there could be merit to Iran’s assertion that it needs nuclear power for civilian purposes “as badly as it claims.”
He said oil production is declining, and both gas and oil are being sold domestically at highly subsidized rates. At the same time, Iran is neglecting to reinvest in its oil production.
“With an explosive demand at home and poor management, the appeal of nuclear power, financed by Russia, could fill a real need for production of more electricity.”
The only problem with that analysis is that it’s bull cookies. Iran has been trying to develop a nuclear weapon since at least the early 1990’s according to the CIA and possibly longer. There wasn’t a problem with oil revenues back then nor was any contemplated – as long as they had competent bureaucrats to run the oil industry.
But in Iran, you get what you pay for. And the hardliners bought into Ahmadinejad’s glorious vision of a corruption free, pious Iranian government. What they got is a nightmare of incompetence and stupidity. Ahmadinejad’s first choice for oil minister was a joke; a close friend, tea and carpet trader and former acting mayor of Tehran, Ali Saeedlou who received a geology degree in 2003 from “Hartford University,” a place no one ever heard of or can confirm the existence of. The Parliament refused to be the punchline to the laugher and nixed his confirmation. This is but one example of Ahmadinejad’s mismanagement of government. Throughout the ministries, not only has there been mismanagement, but the same kind of corruption that occurred under previous administrations, seems to continue unabated. So much for “reform.”
It isn’t Ahmadinejad’s loose lips about destroying Israel or his taunting of America that has him in trouble with the elites in Iran. It is his rank incompetence as an administrator that is driving much of the opposition against him. This is important to keep in mind if the so called “moderate” radicals get back into power because the fact is, all segments of the Iranian government agree with Ahmadinejad with regards to Israel and the United States. Changing faces in the leadership will not lead the Iranians to halt or slow down their nuclear program nor will it deter them from meddling in the affairs of Lebanon or in sponsoring terrorism.
I guess Ahmadinejad was too busy looking for the messiah to see to the competent administration of his government.