Ahmedinejad's victory brings to an end 15 years of factional squabbling inside the Iranian regime. The leadership now controls all of the key institutions of state, and the reformers will have to regroup and plot outside the government, trying to build grassroots support. However, Ahmadinejad's policies may do more damage to the regime over the next five years than the previous 15 years of inaction.
While forces allied to the Iranian regime such as the Pasdaran (Revolutionary Guard) and the Basij (a paramilitary volunteer militia) doubtless contributed to Mahmoud Ahmadinejad's victory on 24 June, his win was largely due to the appeal of his anti-corruption and implicitly anti-clerical platform. Ahmadinejad comes from the Abadgaran movement (the Developers of Islamic Iran) that has sprung up in the past ten years in response to the rise of the reform movement and growing criticism of government incompetence.
The Abadgaran believe that Iran's many problems - unemployment, a demographic bubble, slow economic growth, questions over the legitimacy of the regime - can be addressed using technocratic scientific methods. Many members of the Abadgaran have backgrounds in the Pasdaran or the Basij, and their political experience was shaped by the revolution and the 1980-88 Iran-Iraq war - they now yearn for the ideological certainties of those years (one member of the movement I met in Tehran had a photograph of an Iranian soldier who had just been severly wounded on his wall as an inspiration).
The Abadgaran is a movement of laymen, though its members are personally loyal to Supreme Leader Ali Khamenei as the heir to the Iranian Revolution and the personification of one of its central principles, velayet-e faqih (the Guardianship of the Jurisprudent). Clerics, such as Ahmadinejad's rival, Akbar Hashemi-Rafsanjani, have been criticised over the past 25 years for their poor management of the economy and their corruption. The rise of the Abadgaran allows the clerical leadership to withdraw to more secure positions within the regime - the Leader's office, the Guardian Council and the Judiciary - while keeping the regime secure and strong in the hands of loyal lay experts.
The Abadgaran present themselves as technocrats with the expertise to solve the country's problems. However, their record over the past few years has been poor, and they are likely to do more harm to the Islamic Republic in the long term than good. The Abadgaran took control of Tehran City Council in February 2003, and have been the leading faction in parliament since flawed elections in 2004. Among their first acts in parliament was to rewrite laws on foreign investment in order to throw out Turkish investors who had signed contracts to run Tehran's new airport and build a new mobile phone network. The airport contract was torn up on national security reasons (Turkey is friendly with Israel) after Pasdaran rolled onto the runway just after the new airport opened. The Turkish firm has withdrawn from Iran after its stake in the mobile JV was reduced to below 50%. Abadgaran members of parliament have also blocked other reform legislation from the outgoing Khatami government, as well as forcing the resignation of one of Khatami's ministers.
The movement has also dipped fairly liberally into the oil fund, which is supposed to hold excess oil revenues, in order to distribute oil wealth directly to the people in the form of subsidies and cheap loans. Abadgaran policy under Ahmadinejad is likely to have a catastrophic effect on Iran's oil industry (which has still not fully recovered from war and revolution). Iran already consumes 1.5 million of its 4 million daily production of oil. It also spends around $3 billion a year on fuel imports. Continuing fuel subsidies will increase fuel consumption to the extent that Iran consumes more than half of its production. This would make it weak in OPEC, and seriously reduce its revenues, threatening an already weak economy. Observers have been predicting the end of the Islamic Republic for 25 years now, but economic suicide on the Abadgaran model could the policy that finally kills it.
Still, Ahmadinejad and the Abadgaran offer an easily digestible economic and political populism that must have seemed particularly appealing on election day next to the other candidate, Akbar Hashemi Rafsanjani. Hashemi Rafsanjani had already been president for eight years, presiding over a high-spending consumer boom in the early 1990s that eventually led to a virtual debt default by Iran. He was universally seen as corrupt and unprincipled; many reformers and moderates held their noses as they voted for him on 24 June...
Ahmadinejad's win is sure to sharpen the confrontation between the US and Iran over nuclear issues, Iraq and Hizbullah, among other things. Ahmadinejad believes in a strong Iran; his leader, Ali Khamenei, is a shrewd observer of Iranian trends but knows little of the outside world. This combination of ignorance and resolve is exactly the sort of thing that will fuel the more aggressive members of the Bush administration as they consider Iran policy. It will also alienate potential friends such as the EU and Japan.
In many ways, Ahmadinejad's victory serves the Bush administration right. The US once again showed its tin ear for all things Iranian two days before the election when it denounced the exercise as a sham (having endorsed equally, if differently suspect votes in Iraq, Saudi Arabia, Egypt and the Palestinian Territories earlier this year). The US proclamation was accompanied by the usual bluster, "the US stood by Iranians in support of freedom". This is exactly the sort of thing that gets all Iranians' backs up, and sends them to vote for people like Ahmadinejad. Now, the Iranians, the EU and the US has to deal with a bunch of people who long for the good old days revolution and the war. Good luck.