27 June 2008

Iran Growing Desperate, and Dangerous

Even oil at $140 a barrel cannot save the unfortunate country of Iran, sinking under the stone aged mindset of its leadership.
Events in Iran since the Revolution are an eery echo of what has happened in Venezuela since the advent of Chavez. Skilled workers and foreign capital and technology have fled. Corruption has become rampant along with incompetence. Production of over 6 mb/d fell to below 3 mb/d after the Revolution and is currently about 3.8 mb/d. The pre-revolutionary head count of 32,000 employees has grown to 112,000.

Since the Revolution Iran has exported $801.2 billion of oil but nobody knows where that money has gone. “Certainly none of it was invested in Iranian oil infrastructure which badly needs renovation and repair, upstream and downstream.” The author claims the Iranian petro-industry is “on the brink of bankruptcy” although such a claim is not documented.

It is clear that Iran, Venezuela, Mexico, Nigeria, and Iraq together represent an enormous percentage of the world’s oil deposits and production that is being mismanaged. The political and management dysfunctions in all of these countries simultaneously is a major reason for the world’s current energy crisis. If these countries all operated in a standard capitalist mode, I suspect oil would be below $50 a barrel __Source
Inflation in Iran is approaching 30%, and no one has confidence in the national leadership. Ahmedinejad is careful to pay off his supporters in the legislature and the revolutionary guard, but his personal mismanagement of national oil revenues will soon come back to haunt him.
What happened to the US$35 billion of oil revenues that Iran's Shabab News, in a now notorious account, claims disappeared from official accounting during the year through March 2008? Half the country's oil revenues disappeared from the books. A great deal of it left the country for banks in Dubai in the United Arab Emirates and elsewhere; capital flight already was running at a $15 billion annual rate last year, by my estimate.

...Ahmadinejad's patronage system generates payoffs to the political class that have set in motion uncontrolled inflation - officially 25% per year but certainly much higher - and a rush into real assets. A side effect is that the average Iranian urban household, which spends $316 a month, is gradually being priced out of the rental market.

Not only rents but foodstuffs, fuel and other essentials have registered double- or triple-digit price increases during recent months, according to fragmentary reports trickling out of the country. _Source
Iran was once the most advanced muslim nation in terms of literacy and modernity. Similar to what happened to Cuba under the disastrous rule of Castro, Iran under the mullahs has been an unmitigated disaster to the country and to the middle eastern region as a whole. Cosmetic change of leadership--substituting Larijani for Ahmedinejad for example--will not solve the problem. The mullahs have to go.

Iran has become a typical, corrupt third world "payoff nation." The leadership must divert funds from the sale of nationalised resources to pay off its lackey supporters, to maintain power. Iran's average population IQ is just 84, three points lower than neighboring Iraq's population average. The birthrate of Iran is quite low for a muslim country, particularly among the educated classes--a severely depleted national resource, since the mullahs came to power. Iran's human capital at the upper end offers little hope for the future.

Unemployment over 30%, inflation soon over 30% (if not already), violent unrest among its own population... Under Ahmedinejad war--possibly nuclear war--would become an inevitability within just a few years. Under Larijani the future would not be as clear, although Larijani claims to hold the same worldview as Ahmedinejad--he just maintains a more sober outward style. Meanwhile, Russia and China do what they can to suck Iran dry like vampires, pushing it farther into an extremist posture.

A happy ending for this story is not in the cards. More likely is that millions in the region will die in the next regime transition.


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Blogger Will Brown said...

A quibble if I may; all of these social conditions existed when I lived in Iran during the final years of the monarchy. Which does not relieve the mullahs of their portion of the blame/responsibility for the current state of affairs in that blighted country, but it seems slightly disingenuous to blame them for attitudes and behaviors that were already established societal norms before their asscension to political power.

Sadly, I'm afraid there never was the realistic possibility for a "happy ending" in Iran's national suite of cards. And since millions have died as a result of the last regime transition, wouldn't that simply be a continuation of the status quo ante to the next transaction?

People, both individually and as a group, take comfort in the strangest things, don't you find? By Roman or Mayan standards the Iranians aren't really all that extreme. Or effective, which will be the real cause of their continued downfall.

Friday, 27 June, 2008  
Blogger al fin said...

I certainly hear what you are saying, Will. The people who are still in Iran do not necessarily want self-determination or freedom, beyond a few simple personal decisions.

Still, Roman and Mayan leaders could go insane without having the ability to incinerate millions of people using nuclear weapons.

The deaths of millions over decades might feel a bit different than the deaths of millions over mere seconds.

There is little comfort to take from that, Will.

Iran with its corrupt loyalists rallying around the mullahcracy resembles Iraq with its Sunni supremacists rallying around Saddam.

Friday, 27 June, 2008  
Blogger Snake Oil Baron said...

The only hopeful thought is that Iran and similar centralized, authoritarian governments with oil are bound to become increasingly dependent on the high price of oil to cover their poor performance and to maintain control. While oil revenue may be shrinking due to the mismanagement, that drop will turn into a calamity if new reserves, an economically driven softening in demand and other factors start to erode the price.

Meanwhile they are continuing to teach the people and the world how much of a failure the revolution has been. Ayatollahs are not rising in public esteem. Christianity, secularism and atheism and many other social phenomena are competing with Islam for loyalty. Suppression of the young, oppressed ethnic groups and the rest is not cheap and the wider unrest becomes the more excessive will be the measures needed to keep hold of power.

Friday, 27 June, 2008  
Blogger Will Brown said...

Apparently I didn't say what I thought as well as I intended.

I'm not trying to excuse the Shia Mullocracy, only to point out that they aren't even as original or accomplished as your post seemed to credit them with being. An opportunistic authoritarian taking advantage of well-established societal conditions is simply a Persian being a slightly more ruthless Persian then was previously the norm, that's all. Being somewhat familiar with the previous standard, I'm only surprised it's taken the present lot as long as it has to bring things to their present state.

As regards the potential nuclear threat, perhaps it's simply that I am sufficently familiar with both just how critical are the tolerances required to manufacture a nuclear bomb and with the state of Iranian technical capability before the post-coup brain-drain occured. "Shade tree" doesn't even begin to convey the shoddiness that technologicaly gifted Iranian's strived for. Under truely appalling conditions I might add and their successes were monuments to their personal determination, too.

Bear in mind that I also made this suggestion, again, late last summer. And stand by it still. If your only intent is to derail Iranian nuclear development, and you're willing to be as ruthless as the Persians have said they themselves intend to be, then there is no need to impose regime change, invade to any significant distance or do anything more than make continued nuclear development work as close to impossible as modern Western military (non-nuclear) weaponry permits.

If the bomb-building lab(s) - if essentially the whole country - has no electricity (or water or passable road access) because the infrastructure has been as totally destroyed as a laser-guided munition permits, I think the nuclear threat recedes quite sufficiently for immediate Western purposes. As your own post makes clear, the Ayatollah's and their supporting thugs haven't got a lot of time to work with here either. We don't have to actually beat them, we only need to not let them succeed for just long enough. The rest of Persia will see them off (and the sqeamish are advised to look away).

Saturday, 28 June, 2008  
Blogger al fin said...

Interesting ideas about the competence of Iran's science and technology personnel. I would tend to agree, except for the "guest technicians" from Russia and perhaps China.

While being friends with Russia and China did not save Saddam from the gallows, Iran appears quite confident that it is immune from any outside attack that will cause it significant harm.

Iran is descending into the stone age on its own, without being bombed by guided weapons. Can you help the infrastructure along in its failure without pointing such an obvious finger at the great satan or any little satans?

If you do anything, you want to peel away the people from the government. Incite outright rebellion. Make support of the government seem like a chump play to the man on the street.

If you can get the mothers of Iran to teach their children hate for the mullahcracy like the mothers of Gaza teach their children hate for the Jews, you'd be making progress.

Saturday, 28 June, 2008  

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“During times of universal deceit, telling the truth becomes a revolutionary act” _George Orwell

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