From The Australian, April 23, 2007, by Marie Colvin ...
Bread prices may be Ahmadinejad's undoing
... Ahmadinejad - who once claimed to have been surrounded by an aura while speaking to the UN and who has called for Israel to be wiped off the map - is becoming, in the words of one Western official, "increasingly divorced from reality".
Diplomats find it hard to judge who really speaks for Iran today. Supreme leader Ayatollah Khamenei has the ultimate power but says little in public, while his President's rhetoric is often at variance with more business-like statements from other senior officials in parallel power structures.
Ahmadinejad, head of the conservative hardliners whose scant knowledge of the outside world is a source of pride, has found himself pitted against a group of conservative pragmatists such as Ali Larijani, secretary-general of the Supreme National Security Council and Iran's chief nuclear negotiator, who represents a more sophisticated approach to international relations.
...The saga of the 15 British sailors and marines detained in the Shatt al-Arab waterway last month highlighted a fault line of growing significance in Iranian politics. The Revolutionary Guards, one of the pillars of support for Ahmadinejad, imprisoned them and made talks about their release all but impossible. They are said to have shown no sense of urgency and no understanding of the pressures faced by the British Government.
In the end, Larijani - who believes that, to survive, the regime has to engage with the West - stepped in and defused the crisis. He recommended to the supreme leader that the servicemen be freed and then had a long talk about it with Nigel Sheinwald, Tony Blair's foreign policy adviser.
Ahmadinejad and Larijani ran against each other for the presidency in 2005 and represent factions vying for power in parliamentary elections next year and presidential elections in 2009.
Many Iranians believe that Ahmadinejad's international posturing on the nuclear issue and UN sanctions may have backfired at home. A steep drop in support since he was voted in on a populist platform two years ago was in evidence when his Sweet Smell of Service party suffered dramatic losses in municipal elections last December. It is Ahmadinejad's apparent detachment from the economic realities facing ordinary Iranians that now threatens his position, according to critics who also argue that his nuclear obsessions have left the country isolated and vulnerable to attack.
Some rivals accuse him of using confrontation with the West to distract people from the mundane but pressing concerns of stagnant wages, skyrocketing prices and imminent petrol rationing, an extraordinary prospect in a country that earns $240million a day from oil.
Every conversation here last week seemed to revolve around the imposition of petrol rationing on May 21. Subsidised petrol will rise from 10.7 cents to 13.5 cents per litre. Far worse in this sprawling traffic-choked city, only three litres a day will be available at that price. Ration cards will be issued and any purchase over the limit will be at a non-subsidised rate that has yet to be decided.
"It is one of the most sensitive decisions ever taken in the history of the Islamic Republic of Iran," said Saeed Laylaz, an Iranian economist. "There will be dissatisfaction, unrest and more inflation. At worst, there will be an explosion in the social structure."
Iranians have already been hit by a 50 per cent rise in fares last month. Shared taxis, the favourite way to get around town, rose from 13.5c to 20c for the shortest journey. Every such increase counts in a country where a teacher is paid about $70 a week.
... the people who voted Ahmadinejad into power ... are furious that their salaries remain pitifully low while the price of food rises at a rate unofficially estimated at between 20 and 40 per cent per annum. They feel betrayed and say they will not vote for him again.
Some Iranian analysts say Ahmadinejad's theatrics have not only sent his popularity into freefall but have also earned the displeasure of Khamenei - who could remove him. Such a radical move seems unlikely, not least because it might give the impression that Iran was bowing to Western demands. But Ahmadinejad will face an uphill battle to win a second term, given the state of the economy and the impression that he is a demagogue.
The dark horse positioning himself to challenge the President is Mohamed Baqer Qalibaf, Ahmadinejad's successor as mayor of Tehran.
Qalibaf, a former Revolutionary Guard now seen as a conservative pragmatist but who straddles both camps, is one of the few politicians earning praise in Tehran by concentrating on practical matters such as building parks and new pavements. In a contest with a mystic obsessed with nuclear matters, the practical man preoccupied with pavements and the price of bread may just prove to be the winner.
The Sunday Times