WASHINGTON — The decision by former Iranian President Mohammad Khatami not to seek the presidency again has revealed how muddled Iranian presidential politics now is. In trying to sort out this muddle, the most important thing to keep in mind is not so much who will be elected, but what that choice will reveal — about the intentions of the country’s supreme leader, Ayatollah Ali Khamenei.

Unfortunately, the most likely outcome will be continuing transformation of the Islamic Republic from a civil government into a garrison state in which the military plays a major role in determining political and economic matters.

Who will actually win the vote is unpredictable, but not because Iran is democratic. Khamenei, who is also the commander in chief of the armed forces, oversees the agencies that will run the election: the Guardian Council and the Ministry of Interior, which supervise the electoral process, and the Basij militia and Revolutionary Guard (IRGC), which unofficially control the ballot-boxes and the vote-counting process.

Recent surveys show that the increasing unpopularity of the current president, Mahmoud Ahmadinejad, stems primarily from his economic policies. Although oil prices reached an all-time high in 2008, unemployment and inflation (now 31 percent) are out of control and the government is facing a $44 billion budget deficit. The public sector accounts for roughly 80 percent of the economy, and relies mostly on now-plummeting oil revenue, while Iranian banks face a credit crisis, with Mahmoud Bahmani, the governor of the Iran Central Bank, estimating total delinquent payments to be $38 billion.

But Ahmadinejad’s unpopularity does not necessarily weaken his chances of being re-elected. A few months before the election, neither of the two main political currents, conservative and reformist, has settled on its candidate. Among the reformists now in the race, Mehdi Karrobi, the former speaker of the Majlis (parliament) is a declared reformist candidate. Mir-Hossein Mousavi, a former prime minister, and Abdullah Nouri, a former interior minister, are also expected to enter the race.

On the conservative side, Ahmadinejad so far stands alone. But many conservatives also oppose his economic policies, as well as his management style. Conservative voices have repeatedly argued that supporting Ahmadinejad will cost them votes and reinforce the economic crisis.

Conservative disenchantment with Ahmadinejad is apparent in the current Majlis, which is predominantly conservative. The Majlis has rejected the government’s economic bills, and has repeatedly impeached or challenged Ahmadinejad’s Cabinet ministers.

Iran’s main diplomatic challenge will center on its nuclear program and relations with the United States. Since the president has no authority over these issues, any disagreement between the supreme leader and the next president will place the president in a difficult position with no real power.

In terms of domestic policy, the major challenge for the next president will be the economy. Over-reliance on oil revenues, the effect of long-standing international sanctions, and the reluctance of foreign companies to invest in Iran have exacerbated the economy’s structural problems.

Perhaps one of the most significant elements in Iran’s stagnation is that the Revolutionary Guards control a large portion of the economy, and are beyond the reach of government regulation. In order to manage the economic crisis successfully, any president must not only shift economic policy, but also amass enough political power to be able to thwart the intervention of the Revolutionary Guards and other organizations in economic policymaking.

Khatami’s initial decision to run for the post again grabbed the international community’s attention. Yet a Khatami victory would not have guaranteed change. As president, he faced criticism from reformists for his failure to resist a range of powerful groups that sabotaged economic reform and improvement in Iran’s relations with the West.

Khatami’s organizational savvy had not improved much since then. So far, he lacks even a media platform for his faction. Reformist critics believe that in order to mobilize people it will not be enough just to campaign against Ahmadinejad. If a reformer is to win, he must prove that he will be able to sway Iran’s political structures toward a reform agenda.

But reformists ask: If the supreme leader does not even permit the Khatami faction to have a newspaper, would he really have allowed Khatami to become president? Even if any reformer does become president, will he be able to overcome his differences with the supreme leader?

Speculation about the outcome of the election is an interesting parlor game. But it should not distract us from the fundamentals of Iranian politics. The next president may have room to adjust economic or social policies. But, on the big issues of foreign policy, relations with the West, and the nuclear program, the identity of the president is not important. These issues will be decided by a man who is not running for office in June, but whose power is secure: Ayatollah Ali Khamenei, Iran’s supreme leader.

Mehdi Khalaji is a fellow at the Washington Institute for Near East Policy. © 2009 Project Syndicate (www.project-syndicate.org)

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