Three weeks ago, a hard-line cleric close to Iran”s president gloated publicly that the world financial crisis was God”s punishment on the United States. The laughter, however, was short-lived.
Iran plunged this week into a bitter storm of political recrimination, largely directed at President Mahmoud Ahmadinejad, as officials and ordinary Iranians realized with shock that the Islamic republic faces a severe economic crisis of its own.
The reason: As oil prices plunge because of the global slowdown, Iran is caught in a classic crunch. Ahmadinejad”s government failed to save enough of the billions in oil windfall it earned during the good years to now cushion the bad.
The same crunch afflicts Venezuela and to a lesser extent, Russia, as all three struggle with falling oil prices.
But in Iran, the economic crisis has quickly turned political. Economic woes are the key issue as Ahmadinejad — already deeply unpopular and suffering from exhaustion, he said this week — seeks re-election next summer in a tough vote. And they are shaping up as his weakness.
Critics say he has recklessly squandered Iran”s oil windfall on costly, subsidized imports, from fruit and other goods to the gasoline the country must buy overseas because of a refinery shortage, while failing to take any needed reforms.
