A very Iranian coup

By Chris Cook

If you look at recent events in Iran through the lens of oil, money and power you won’t go too far wrong. I’ve been working with Iran for over five years now in respect of developing their oil market and financial system, and in the last year – post the Credit Crunch, which I predicted – I have had the chance to talk to key ministers, heads of state corporations, the chair of the Majlis energy commission, even clerics and merchants/bazaaris.

The power base of Khamenei/Ahmadinejad’s faction is the Revolutionary Guard/Basiji and their economic base consists of the religious foundations known as Bonyads.

Unlike in the West, where governments are owned and run by the banking/financial system, in Iran it’s the oil ministry that controls the purse strings and calls the shots. The Khamenei’ite faction has gradually been taking over key positions in the Oil Ministry and its myriad state corporations.

It should be remembered that when President Ahmadinejad gained power he was able to put in his own appointees as ministers except for the key oil ministry, where the Majlis twice rejected his appointments and appointed someone acceptable to the “Oil Mafia” more or less identified with former President Rafsanjani.

In the last couple of years we have finally seen a new oil minister appointed by Khamenei/Ahmadinejad. Most of the old guard – people like Kazempour Ardebili, who was for 20 years Iran’s OPEC representative, and several others of long standing in key positions – have “retired” or become “advisers”.

Having finally wrested control after years of struggle of the oil revenues from the Rafsanjani etc faction, the Khamenei’ites are in no mood to give it up. President Ahmadinejad is, as far as I know, not one of the beneficiaries (being a genuinely honest and religious man), but is a useful appointee in the same way that Bush was a useful cipher for Big Oil, before Big Money reasserted control in the US.

My take is that the result of this election has been a Very Iranian Coup, and that the people in control are very much analogous to a less technocratic and unsophisticated type of “siloviki”. Personally, I doubt whether this faction will be able to maintain and consolidate control, because they do not have the expertise to manage an unwilling bureaucracy. They also seem to have alienated the powerful Bazaaris, whose support was instrumental both for Khomeini in 1979, and for Ahmadinejad more recently.

I don’t see any chance of a violent revolutionary struggle since the Iranian military are keeping out of it. This is an economic, not an ideological struggle.

The next phase in Iran will be fought on the economic battleground, provided President Obama is shrewd enough to stay out of it and not to allow the nuke Nationalist card to be played. Indeed, the friendlier and more helpful the US are, the more difficultthe new government’s position will be.

In respect of the economy, it was quite evident in January when I was last in Teheran, as the only non-Iranian speaker at a very high-level conference, that the “reformist” Western financial approach to privatise everything and fuel the economy with debt, has taken a big hit. Here the reformists are in exactly the same position as President Obama: they don’t have a Plan B.