Iranian regime reacts to Obama’s election

Added 29. Nov. 2008: Linked with 2008-11-30: James Cogan – Australia.

Published on WSWS, by James Cogan, 13 November 2008.

Within the Iranian ruling elite, a perception has developed in recent months that an Obama administration would hold out the prospect of an improvement in relations with the United States. The only evidence for this conclusion has been Obama’s statements that he would be prepared to hold direct talks with Iran over its nuclear program – something the Bush administration has refused to do …

… The government has also forced banks to lend at interest rates far below inflation. As a result, at precisely the time when businesses and farmers need emergency lines of credit, the banking system is short of available capital. This will have a particularly severe impact in rural areas, where crops have been devastated due to drought.

Economic circumstances mean that the sanctions imposed through the United Nations and unilaterally by the US and its allies are having a serious impact. Iran will ultimately need to borrow on world financial markets if it slumps into budget and trade deficits, but confronts huge obstacles in doing so. Like North Korea, it faces the prospect of economic strangulation unless it closes down its nuclear enrichment facilities and bows to other US demands.

Criticism of Ahmadinejad is growing as the situation facing the Iranian regime becomes increasingly desperate. On the weekend, 60 Iranian economists signed a 30-page letter that condemned the government’s “extreme idealism” and denounced its “misguided trade policy and policy of tensions with the rest of the world”.

The letter declared: “Meagre economic growth, widespread jobless rate, chronic and double-digit inflation, crisis in capital markets, government’s expansionary budgets, disturbed interaction with the world, inequity and poverty, have combined with the global economic downturn to leave undeniably big impacts on exports and imports.”

With the election of Obama, a section of the Iranian elite associated with the so-called reformers sees the opportunity of cutting a deal with Washington to end Iran’s economic isolation and salvage their economic interests. As Obama has made clear, however, the US has no intention of making any major concessions to Iran.

Any steps towards negotiations with Iran are likely to be drawn out by an Obama administration until after the Iranian presidential elections in June 2009, with the aim of using sanctions to further weaken its economy and undermine support for Ahmadinejad.

Behind-the-scenes, preparations for war will continue to be made, should a sanctions agenda fail to bring about the desired result. As the World Socialist Web Site reported last week, Bush and Obama advisors have been jointly discussing plans to significantly escalate diplomatic pressure against Iran, as well as deploying the forces needed for a “last option” military strike. (full text).

Link: See Obama advisers discuss preparations for war on Iran, by Peter Symond, 6 November 2008.

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