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The Ayatollah's Buffett Game


Iran’s Supreme Leader Ayatollah Ali Khamenei has had four years to figure out how to prevent another international embarrassment like the Green Revolution. With the presidential election one day away, a carefully vetted ballot contains no outspoken reformists. Candidates have been instructed to be reticent and vague in televised debates. Campaign leaflets and posters are few in public spaces, and secret police are out filming rallies and preventing spontaneous gatherings. Other than this security apparatus Khamenei has put in place, the biggest deterrent against mass protests may be the election itself, which many Iranians are so cynical about that—unlike (and because of) 2009—they plan not to vote at all. But while it’s hard to call this a true democratic election, it’s important to remember what this means for Iran and especially for Khamenei and his hold on power.

Meir Javedanfar at Bloomberg explains that the Ayatollah is in a position a bit like Warren Buffett: “answerable to his shareholders when making a big investment pick.” Those shareholders, according to Javedanfar, are the Revolutionary Guard Corps and the Principalists. Having picked poorly with regard to outgoing President Mahmoud Ahmadinejad, who divided the country’s conservatives instead of uniting them, presided over a dismal economy, embarrassed the regime, and generally hurt shareholders’ interests, Khamenei is tasked with making a pick that will bolster the prosperity and confidence of shareholders, securing his grip on power:

As powerful as the guard is, however, its companies rely on the Iranian population to buy their products. The less money consumers have, and the more inflation erodes their purchasing power, the less they can spend on goods that the revolutionary guard makes and imports. […]

This makes it even more important that Khamenei invests his political capital and reputation in the right candidate this time. The next president needs to strengthen the regime’s cohesion, its domestic- and foreign-policy performance, and the economy. If Khamenei makes another poor choice, his credibility and even authority may suffer as important regime stakeholders begin to doubt his ability to secure their interests.

Khamenei’s top priority right now is to promote cohesion in the regime’s increasingly divided ranks, a major concern for the Principalists. Infighting has increased at an unprecedented rate during Ahmadinejad’s second term, a phenomenon that is more and more difficult to conceal.

This election may be a farce for the voters, but Khamenei is obviously taking it seriously, as the choice of the next President will be seen by his allies as a major test of his political will and power. For a sense of the stakes and players involved, read Javedanfar’s whole piece here.

[Flame image courtesy of Shutterstock. Grand Ayatollah Ali Khamenei image courtesy of Wikimedia Commons.]

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