Iran: Priced Out Of Power
Weeks of Iranian military operations against PJAK (Iranian Kurdish separatists who have long operated out of Iraqi bases) have killed 50-100 Kurds. While most of the dead are Iranian, there were also some Syrian, Iraqi and Turkish Kurds. Meanwhile, much of the Iranian artillery fire has stopped, but Iranian troops are still inside Iraq, looking for PJAK.
The government continues to refuse to reveal inflation rate data. The last official data release, in June, was 16.3 percent, and that was believed an underestimate. The month before, inflation of 14 percent was reported, which was up from 12.4 percent the month before that. The government insisted that inflation would subside by the end of the year, as the after-effects of the reduction in food and fuel subsidies took effect. Many are not so confident that the inflation will decline, and local reports seem to indicate that inflation is rising, not falling. There is no widespread unrest when the fuel and food subsidies were halted eight months ago. Pretty soon, fuel consumption declined 20 percent. No real decline in bread consumption. The elimination of subsidies will save the government $100 billion a year. It is, in effect, another tax, and Iranians are not happy with this rise in their cost of living.
President Mahmoud Ahmadinejad eliminated popular subsidies on food and fuel in order to balance the budget, but this has not reduced inflation. As a result, Ahmadinejad appears to be in big trouble. Not just for how he handled the economy, but for the enemies he has made. Ahmadinejad took on the more conservative religious leaders, mostly because of their corruption, not their hyper-conservative attitudes, and is losing. It was bad enough that Ahmadinejad was going after the stolen wealth of clerics, but he also had the pulse of most Iranians, who wanted less of the extreme (especially anti-woman) social policies. Iranians associate that with Arabs, and Iranians have a low opinion of Arab culture.
Ahmadinejad would not back off when the clerics came after him. Ahmadinejad had promised to fight corruption, but the most corrupt wrapped themselves in Islam and used their private army (the Revolutionary Guard) and control of the justice system and military to resist. Ahmadinejad refused to use his popularity to call his supporters onto the streets. That could get ugly, because Iranian reformers see Ahmadinejad as the lesser evil (compared to the greater evil, the corrupt and powerful clerics) and also a part of the oppressive clerical dictatorship. Ahmadinejad may yet survive, but that's more a matter of what his clerical opponents decide to do. At the moment, the clerics are having their hand-picked majority in parliament demand that Ahmadinejad release the inflation data. Ahmadinejad is responding by trying to form a coalition with reform groups, and all of the many factions that oppose the corrupt clerical dictatorship. But the clerics control the army and police, so Ahmadinejad may be playing with more than he can handle.
Israel believes that Iran is behind the increased terrorist activity coming out of Gaza. This has included Iran pressuring its clients, mainly Hamas and Hezbollah, to cause a distraction by attacking Israel, knowing that Israel would have to respond. This would take media pressure off the Syrian government's violent suppression of a popular uprising. But Hamas and Hezbollah don't want to start a full-scale war with Israel, as they know they would suffer heavy losses.
The U.S. believes that the biggest terror threat in Iraq is not Sunni groups (like al Qaeda), but the Shia militias backed (and sometimes organized) by Iran. But commanding these Islamic radicals to attack has a downside, as Iraqi civilians get killed and Iran's popularity ratings sink ever further (making it more difficult for the pro-Iran terrorists to recruit and operate.)
The continuing violence in Syria has caused Saudi Arabia, the "leader" of the Sunni Moslem world, to come out against Iranian aid to the Shia Moslem dictatorship in Syria. If that government falls, it could precipitate similar pressure against the Shia clerical dictatorship in Iran.