Global Economics

Unrest Spreads in Iran


Massive protests, an investigation into the vote, and continued violence rock the country in the aftermath of Ahmadinejad's "victory"

Continuing protests after the disputed June 12 election in Iran pose the most serious challenge to its government since the 1979 Islamic revolution. Despite a government ban, a massive demonstration went ahead on June 15 in the capital city of Tehran. Mir Hossein Mousavi, the main challenger to President Mahmoud Ahmadinejad, addressed the rally from atop a car, telling demonstrators: "The vote of the people is more important than Mousavi or any other person." Late in the day, one person was killed and others wounded when a pro-government militia fired on demonstrators attacking its compound, news agencies reported.

The government already has backed down slightly since the protests began, with Supreme Leader Ali Khamenei calling on the Guardian Council, a top ruling body, to investigate charges by Mousavi and other candidates that the voting was rigged. Earlier the leader had endorsed the results and warned the losers to avoid "provocations." Sources in Tehran say more demonstrations are planned, along with a boycott of work and a general strike in the coming days. The ferment echoes three decades ago, when a series of rolling demonstrations eventually brought down the Shah of Iran.

While it is still unclear what happened regarding the vote, analysts in Tehran theorize that the conservative leadership felt threatened by the wild, carnival-like atmosphere before the election, as well as overtures from the Obama Administration, and authorized what was in effect a coup d'etat. Scores of opposition figures were rounded up and warned to keep their heads down. The move seemed to work until today.

In the last couple of years, security officials and other members of the Iranian regime have become increasingly concerned about the possibility of a "velvet revolution" that could lead to the end of their theocracy, not to mention their hold on one of the world's largest oil exporters. Such fears partly account for the jailings of seemingly harmless associates of various nongovernmental organizations as well as Iranian-American journalist Roxana Saberi, who was held on charges of spying and then released before the vote.

While it wasn't considered out of the question before the poll that Ahmadinejad would win reelection, his huge share of the official tally—almost 63%, vs. just under 34% for Mousavi—strains credulity, given the passion of Mousavi's supporters and their sense of momentum leading up to the election. There are many other aspects of the voting that arouse suspicion, too, including the quick announcement of the results despite the huge 85% turnout in a sprawling country with many remote polling places.

A Sharp Break with Iranian History

Mousavi supporters will have to deal with a powerful and ruthless state that may go to almost any length to preserve its hold on power. In recent years, what might be called neoconservative elements have gained increasing power. Ahmadinejad, 52, is typical of such people. Not a cleric, he is a former member of the Revolutionary Guard—the elite military arm of the regime—and he has branded much of the old guard who made the revolution as corrupt and decadent.

If it turns out the vote was fraudulent and the regime chooses to maintain its hold on power by violent repression, it will lose significant credibility inside and outside Iran. As Columbia University Iran analyst Gary Sick puts it: "If the reports coming out of Tehran about an electoral coup are sustained, then Iran has entered an entirely new phase of its post-revolution history. One characteristic that has always distinguished Iran from the crude dictators in much of the rest of the Middle East was its respect for the voice of the people, even when that voice was saying things that much of the leadership did not want to hear."

The election results will come as a blow to Iranian business. Local executives give Ahmadinejad very low marks as a manager of the economy. They believe he has squandered Iran's oil wealth while crudely interfering with institutions such as the central bank. They were hopeful that matters might improve under Mousavi, who is considered a capable public official. Of course, Iranian business was always well aware that a second term for the President was a strong possibility.

Beyond a possibly turbulent aftermath to the election, a key question now is whether Iran's leadership will respond to the calls for a more pragmatic approach to government and international relations that Mousavi made in his campaign. Many Iranians would like to see an easing of tensions with the U.S. and even an opening for U.S. investment in Iran. Even Ahmadinejad has indicated some interest in the Obama Administration's overtures to work for a normalization of U.S.-Iranian relations. The U.S. says it will continue trying to engage Iran.

The trouble is, the decision-making process in Iran is opaque and fraught with difficulty. There's a joke among Iran watchers that each of Iran's top leaders wants to make sure none of his rivals receives credit for ending the 30-year impasse with the U.S. What exactly Ahmadinejad will do in his second term, assuming he gets one, may be hard to predict, but the "victory" is unlikely to prove good news.

Reed is London bureau chief for BusinessWeek.

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