Iran's President-Elect Describes a Bleak Economy

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TEHRAN -- Iran's president-elect, Hassan Rowhani, painted a bleak picture of the country's economy on Monday, blaming the departing administration of President Mahmoud Ahmadinejad for high inflation and unemployment, saying it "has left much work to be done."

Mr. Rowhani said that Mr. Ahmadinejad's government had presented a far-too-optimistic picture of the economy, which even according to official statistics is stumbling. "We asked current officials about the situation of the country," Mr. Rowhani said, "but their reports and those of our teams were very far from each other."

Speaking in Parliament, Mr. Rowhani said that the inflation rate, officially listed as 32 percent, is 42 percent, the local news media reported. Iran's economy actually contracted during the past two years, he said, the first time since the Iran-Iraq war in the 1980s.

He said he was especially concerned about unemployment among educated young people. "According to our statistics," Mr. Rowhani said, "we will have 4.5 million unemployed university graduates four years from now."

But Mr. Ahmadinejad picked up some unexpected support from the supreme leader, Ayatollah Ali Khamenei, and other conservatives, who for months have criticized Mr. Ahmadinejad as incompetent and for surrounding himself with corrupt elements.

"The respected president and his colleagues faced enormous tasks and operated rapidly in comparison with all the other governments," Ayatollah Khamenei said during a speech broadcast on Iran's state radio. "We must consider their huge workload, tireless efforts. This cabinet avoided comfort and grants, whereas most officials in the world and in the country benefit from them."

Mr. Rowhani's close aide, Akbar Torkan, who acts as a liaison with Mr. Ahmadinejad's government, told the local news media that the economic state of the country was "much worse than expected."

Several lawmakers also criticized some last-minute decisions by the departing government. In one instance, Mr. Ahmadinejad transferred the largest plot of buildable land in the capital to the Voice and Vision organization, Iran's state broadcaster. That decision was accompanied by a ceremony lauding the president organized by the state broadcaster.

In another move, the central bank quietly cut the official value of the local currency, the rial, in half, so that a dollar now buys 24,500 rials, up from 12,260. While economists say the new figure still does not reflect the rial's true value, that is, more than 30,000 to the dollar, it will help the government pay off outstanding debts to banks, but at the price of further stoking inflation and raising the prices of basic goods.

"They hypothetically made a huge amount of money, which they used to barter of against their debts with banks and other state organizations," Ahmad Tavakkoli, a lawmaker, told the semiofficial Mehr News Agency on Monday. "This is illegal and dangerous."

Mr. Ahmadinejad, who was barred by the Constitution from seeking a third term, had seemingly fallen from grace in the months leading up to the June vote. He clashed with Parliament, the judiciary and the hard-line clerics who accused him and his entourage of secretly plotting to oust them from power.

The judiciary opened several corruption cases against Mr. Ahmadinejad's close associates, and the state newspaper, Kayhan, accused him of mismanaging the economy and undermining Ayatollah Khamenei.

On Sunday, however, the newspaper's editor in chief, Hossein Shariatmadari, accused reformists and enemies of the state of hatching a "big plot" against the departing government. "His government has been unprecedented," Mr. Shariatmadari wrote. "His services are everlasting."

The change in attitude might signal a behind-the-scenes compromise, analysts say, or illustrate the tendency of Iran's governing establishment of hard-line clerics and commanders to close ranks in the end.

Mr. Rowhani has signaled his intention to pursue improved relations with the United States, though it remains unclear if he has the desire or the authority to soften Iran's position over its disputed nuclear program, an underlying cause of the estrangement. Iran insists that its program is peaceful, while the United States and other Western nations suspect that Iran is seeking the ability to build nuclear weapons. Negotiations stalled before Mr. Rowhani's successful election campaign.

On Monday, a group of 29 former, prominent American government officials, diplomats, military officers and national security experts sent a letter to President Obama, urging him to take advantage of Mr. Rowhani's signals. The letter called Mr. Rowhani's ascendance "a major potential opportunity to reinvigorate diplomatic efforts to resolve the standoff over Iran's nuclear program."

The letter was submitted a day after Prime Minister Benjamin Netanyahu of Israel, who has said many times he regards a nuclear-armed Iran as an "existential threat," sought to ramp up the pressure on the Obama administration to take a tougher line with Iran and its newly elected president on the nuclear issue. Mr. Netanyahu said that the United States should intensify its sanctions and that the Iranians "have to know you'll be prepared to take military action; that's the only thing that will get their attention."

world

This article originally appeared in The New York Times.


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