It really matters little what the outside world thinks about the current conflict in Iran over the disputed re-election of Mahmoud Ahmadinejad, or whether the people in Iran are crushed by the totalitarian form of government that has been adopted. This is not a matter of opinion. It is a matter of fact by definition. There is a supreme ruler and what he says goes.
Nothing is more important to the ruling elite than remaining in power -- not the economic well being of it's citizens, not the education of the rural population, not the personal freedoms of the man in the street, and certainly not the rights of Iranian women.
Friday, Iran's supreme leader sternly warned of a crackdown if protesters continue their massive street rallies, escalating the government's showdown with demonstrators demanding a new presidential election. In his first response to a week of protests of the disputed election, Ayatollah Ali Khamenei said opposition leaders "will be held accountable for all the violence, bloodshed and rioting" if they do not halt the rallies. What he means is that he is blaming them in advance if the government has to resort to violence to impose his will.
He alluded to but did not distinguish between peaceful rallies by people expressing their discontent and protesters engaged in violence. He simply wants an end to anyone finding fault with the government. He wants an end to anyone questioning his absolute rule.
What does this mean to the national economy? It means foreign investment will be paltry. It will be ages before Iranian companies appear on foreign stock exchanges. It will put the gestapo-like Revolutionary Guard ahead of all other expenditures. It will spend money on nuclear weapons instead of modern farming equipment and technology. Perhaps the most expensive and wasteful of all will be to discount the value of women as 50% of it's human resources.
If it were a matter of the authorities arresting individuals responsible for damaging property or injuring anyone, then the government's position would be easily understood, but that is not the case. They simply will not accept dissent, and because they know that this is not defensible in a free society, inside Iran or out, they also want to shut down the media and freedom of the press so that they will not have to answer for their repression -- just like the Shah they revolted against!
The political will overflow into the economy for years to come -- see Iran: Totalitarian rule begets totalitarian economy -- and the resulting government crackdown pledged by Ayatollah Ali Khamenei will make it harder for President Obama and other nations to negotiate any moderation of their current standing.
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Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money.
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