As the U.S. prepares for a withdrawal from Iraq, Iran is likely to become a key pivot point in the area. But, a potentially unstable country might be an unreliable ally in an already unstable region of the world.

In this analysis, Dr. Joe Duarte reviews the implications.

This article originally appeared on November 10, 2005, on Joe-Duarte.com.

For Part 1 of this series, visit: Iran: Land of Controversy and Confusion.

From May 1, 2004, to July 19, 2004, Dr. Joe Duarte wrote a series of articles on Iran. The collected works titled “The Iranian Cycle” can be found by clicking this link, and paint a picture of a country whose intimate political and religious beliefs, and the interplay between them are at the core of the confusing array of policy that emanates from its capital Tehran.

Today’s Analysis: Brewing Crisis in Iran: Loss Of Confidence In President

How do you remove a president who is so controversial that his own parliament, dominated by his own party, is beginning to question his every move?

Iran’s controversial president Mahmoud Ahmadinejad, is feeling the heat, as his political appointments and hard line public remarks are increasingly way off the mark, both domestically and internationally. The U.K.’s Independent reported: “Mr. Ahmadinejad's ill-judged remarks about Israel in late October were one of the first signals the international community had that this President was not from the conventional stable of pragmatic conservatives who normally call the shots in Iran. Domestically, he is increasingly seen as maverick and out of his depth.”

According to the Independent Ahmadinejad is “facing a crisis of public confidence after his nominee for oil minister was forced to withdraw in the face of accusations of corruption. The storm over the appointment, the most important and lucrative in Iran's cabinet, is the latest in a series of controversies to engulf the President. His political inexperience, unorthodox beliefs and trust in untested religious conservatives is causing widespread concern in Iran.”

In fact, Iran’s president is in many ways in worse shape the President Bush whose poll numbers have sunk to all time lows. At least Bush has a stout economy and a steady stock market to fall back on, while Iran’s stock market has tanked, the unemployment rate is reportedly at 15%, but may actually be higher, according to some of our sources, and some of Bush’s appointments, like new Fed Chief nominee Ben Bernanke are likely to get Congressional approval.

According to the Independent, Iran’s parliament, also ironically, from Ahmadinejad’s own party, is in major contrarian mode with the president’s policies, and his appointments. “Sadeq Mahsouli was the third name the President has put forward for the oil ministry job since taking power in August. Like the others, he was forced to back down by the parliament, which now routinely challenges the President despite hailing from his own political camp. Several MPs told the Iranian media that lack of experience was the least of Mr. Mahsouli's worries. One lawmaker, Ali Asgari, told the official Iran news agency that parliament wanted to question the nominee on how he had amassed a fortune to become a ["billionaire general"].”

The rhetoric is increasingly non-Iranian. 9"This is the weakest president we have had since the revolution," said Saeed Laylaz, an Iranian political and economic analyst. "The gap between him and the parliament is getting bigger."]

According to the Independent, the divide may be religiously motivated due to the president’s interpretation of Islam. “Mr Ahmadinejad is thought to be a religious literalist, believing in the imminent return of the 12th Imam who Shia believers say went into hiding in the 9th century. In Shia theology, the Imam continues to be the sole source of legitimate power on earth. Until the last century that meant Shias regarded all political leaders as usurping the Imam's sovereignty. Newer thinking gave religious jurists the right to rule in the Imam's place, allowing the creation of Iran's Islamic republic, where a cleric holds ultimate power.”

Fear Of A Return To Open Radicalism

The situation is increasingly interesting, given the factionalism in Iranian politics, and the fact that there is a major nuclear program at some stage of credible development ongoing.

The lines of contention are being drawn, as “Older, traditionalist conservatives, like those who rejected his proposed oil minister, are worried that Mr. Ahmadinejad is trying to instigate a new Iranian revolution this time within the existing structure of the state. They fear he wants to bring younger extremists from the Revolutionary Guard into top positions of power, ousting the older clerics who have previously held sway and embarking on a new cultural revolution that could unsettle their rule.”

Dubious characters are dotting the landscape. “Beside his choice of virtual unknowns for top government jobs, Mr. Ahmadinejad is rumoured to have surrounded himself with religious advisers, without whom he will not start meetings. He is also thought to follow the extremist Ayatollah Taqi Mesbah-Yazdi as his spiritual guide a rival of Iran's supreme leader Ayatollah Ali Khamenei.”

This is not new, but the concept of a major implosion in confidence in Iran is starting to gather steam. On October 31st, we wrote:

[According to Geostrategy Direct, in a report by Bill Gertz: “Iran might be talking tough, but the word on the streets of Teheran is that prominent Iranians are running scared. Iranian businessmen are smuggling their assets out of the country, fearful of a U.S. attack that would topple the Iranian regime.”

According to Gertz: “Iranian officials report a massive outflow of capital, much of it to Central Asia and the Gulf. Iranians are emptying their bank accounts and establishing companies for the day when they need to flee their homeland because of an economic collapse or U.S. invasion. The figures being reported by Iranian regime officials are astounding. In September, Hashemi Shahraudi, director of the Higher Judiciary Council in Teheran, said Iranians have sent $700 billion abroad since 1980. Shahraudi said the capital flight has turned from a trickle to a flood over the past year.”

Gertz continued, suggesting that there is a growing consensus which marks a complete lack of confidence in the Iranian government and economy. “The picture presented by Shahraudi and other officials portray an Iranian businessman without any trust in the regime. Iranians have established more than 10,000 companies in the UAE port of Dubai. Thousands of other companies have been established in neighboring Azerbaijan, Armenia and Turkey.”]

Conclusion

If history is any guide, the situation in Iran is one or two events away from getting our of control. There are three possibilities:

1) Ahmadinejad backs down, and things get quietly settled. This is the least likely outcome.
2) Ahmadinejad gets removed from power. In Iranian politics, this would be unpredictable, as it could be in the form of a resignation, or a marginalization and neutralization of his power, or even worse, an assassination, or even an accident.
3) Ahmadinejad could stage a military coup, which would be the worst outcome, as it would likely trigger a huge set of circumstances in the world financial markets, especially oil.

No matter what, this situation is not likely to end well. And in a region of the world where Iraq is unstable, Syria is increasingly unstable, and Al-Qaeda is steadily active, a whole lot of very unpleasant things could be about to happen.

© 2005 Joe Duarte, M.D.
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