Autumn in NY, With Ahmadinejad

For the past few years, as summer turns to fall, New York has welcomed one of the world's most polarizing figures. With the United Nations General Assembly beginning its 61st session this week, Iranian President Mahmoud Ahmadinejad will again address leaders from across the globe. Unlike his previous visits, Mr Ahmadinejad has not monopolized the headlines of American and international news outlets. Instead, the world is intently watching lawmakers in the US work out a massive economic rescue bill.

The current financial turmoil comes at a bad time for Iranian analysts who might otherwise use the the occasion to review American policies in the Middle East. Ever since the US began its global war on terrorism, Iran has reëmerged as an imperial power, seeking to project its influence throughout the region. As a result, American concerns for Iraq, the energy equation, Lebanon, Syria, and the Israeli-Palestinian peace process must now account for Iran's emboldened position.

At a geopolitical level, the wars in Afghanistan and Iraq have primarily benefitted the Iranians. In these campaigns, the US eliminated two of Iran's regional adversaries when it toppled the Taliban in November 2001 and Saddam Hussein in April 2003. Moreover, coalition forces have been unable to establish viable governments in these countries. The subsequent power vacuüm has presented the Iranians with an opportunity to become the regional hegemon.

Any attempt to craft policy positions on Iran should be aware of three basic realities. First, Iran faces real security threats in the region. Of its seven bordering neighbors, the US has a military presence in three (Iraq, Afghanistan, and Turkey) and overt military influence in another (Pakistan). Iran is also subject to instability from the Caucasus, and the social strains coming from the millions of refugees flooding across its borders with Afghanistan and Iraq. Failures to understand the Iran's concerns in a bad neighborhood have compromised US relations with Tehran. 

Second, the image of Iran's strength belies deeper problems. To be sure, Iran's oil exports provide the global economy with 2.7 million barrels per day (mb/d), which exceeds the existing global spare capacity of about 1.5 mb/d. Indeed, were Iranian production to be taken offline by political decisions or military attacks, the energy market would panic. But revenues from high oil prices have papered over some of the gross domestic failings of the present administration. Mr Ahmadinejad's inept government has led to high unemployment, high inflation, and a stagnant non-hydrocarbon export sector. There are pressure points within the Iranian economy that might be better exploited than the blunt-force sanctions that the US has heretofore applied.

Third, the Iranian nuclear issue is part and parcel of domestic politics. Ever since the nuclear program began back in the pre-revolutionary period of the Shah in the 1960s, it has been an source of national pride. For this reason, the Iranians rejected a proposal from the so-called EU-3 (UK, France, and Germany) to supply Iran with light-water reactors, which do not use weapons grade uranium. According to the chief Iranian negotiator, Hassan Rohani, such a deal would violate Iran's national sovereignty. This rabid nationalism is the way in which the Iranian leadership circumvents its crisis of legitimacy. 

Iranian politics have never been democratic, but the current administration has backpedalled from the quasi-republican government that existed under former-president Mohammad Khatami. Indeed, the Iranian political process is approaching a monarchy. A series of policy changes have strengthened the shadow government of the leadership council, which ostensibly serves as a moral guardian for the country. The Supreme Leader, Ali Khamenei, now commands the loyalty and deference of candidates who wish to serve in public office.

Under these circumstances, Iran heads into an election year. Rather improbably, Mr Ahmadinejad is still the favorite. In addition to the country's economic problems, Tehran suffers from water shortages and mid-day power cuts. The Supreme Leader has also disagreed publicly with Mr Ahmadinejad (on Israel and negotiations with the West), but has suggested that his president should serve another four years. 

Iranians are aware of the political theatre with which they are presented. In some ways, the country looks as it did in the 1970s: awash in oil money, rife with corruption, and growing resentment from reformists. But predictions of an another revolution are unrealistic. The leadership council is simply too strong at this point to allow wholesale political upheaval. And so the next US president should be prepared to negotiate accordingly. He should enlist Iran's help with regional security challenges and leverage economic pressure points in the ongoing nuclear discussion.

The leaves are changing in Manhattan, one can only hope the policies in Washington will, too.