Hard-liner blamed for Iran's troubles
Khatami targets Ahmadinejad
CAIRO - The top reformist candidate in Iran's presidential race blamed incumbent Mahmoud Ahmadinejad for the country's isolation, while a leading global energy consultant warned yesterday that the hard-line leader's policies are worsening Iran's economic woes.
The salvo from former president Mohammad Khatami signaled that his campaign to unseat Ahmadinejad will aggressively target worries over the hard-liner's foreign and domestic policies.
Many Iranians fear Ahmadinejad's anti-Western rhetoric has worsened Iran's international status at a time when the economy is struggling, including an inflation rate that recently hit 30 percent before easing back a bit.
Iran has been hit hard by the global financial crisis and the plunge in oil prices. At the same time, the government is under US and UN sanctions for refusing to suspend uranium enrichment until it allays suspicions that its nuclear program is aimed at developing atomic weapons.
The Washington-based consultant PFC Energy said that whoever wins the June presidential election will inherit major economic problems, which it blamed on Ahmadinejad.
The firm sharply criticized Ahmadinejad for making direct cash distributions to the masses. The handouts have boosted his popularity among the poor, but they ramped up spending and burned through oil revenues that the government relies on for 70 percent of its budget.
"A toxic mix of populism and misguided priorities" by Ahmadinejad has deepened reliance on oil revenues, fueled inflation, and caused economic inefficiencies, said Hanan Amin-Salem, PFC Energy's director.
In the first half of 2008, record high oil prices made boosting spending easy, but then the market collapsed. Iran needs oil to bring roughly $90 a barrel to cover the government's budget - almost three times the current price.
With no sign of prices rising, "Iran is clearly poised for a hard landing in 2009," Amin-Salem said.
That could help Khatami, a liberal cleric and former president who is considered the sole pro-reform candidate capable of beating Ahmadinejad.
In 1997, Khatami was elected president in a landslide after campaigning on ambitious promises to ease political and social restrictions imposed under Islamic rule. His attempts at reforms were largely foiled by religious hard-liners, however, and Ahmadinejad's election in 2005 largely deflated the reform movement.
Khatami's speech late Wednesday to a gathering of supporters - his first since announcing his candidacy over the weekend - suggested his campaign will focus on the discontent with Ahmadinejad.
"The current situation in the country is not desirable," Khatami said, according to comments posted on his Internet site. If it continues, he said, Iran's "social capital and international reputation will be damaged even more."