Forget greedy Wall Street bankers and the folly of subprime mortgages. A prominent hardline ayatollah in Iran has identified the real cause of America's economic woes. It is divine punishment for the United States and Tehran's other enemies who have been targeting the Iranian economy, according to Ayatollah Ahmad Jannati, the secretary of Iran's powerful Guardian Council.
"We are very happy that America's economy is in jeopardy, and they are paying the price for their bad deeds. God is punishing them, and they are now in disarray," he gloated during a Friday prayer sermon at Tehran University. With unabashed schadenfreude, he said: "Their problems have spread to Europe. Just as they are happy when we are miserable, we are now happier because they are miserable." Mahmoud Ahmadinejad, the Iranian president, sounded a jubilant note this week when he addressed the US financial crisis. "The Satanic camps and powers which are stained with corruption face big problems," he said. "Divine signs are becoming evident one after another ? The sound of the crash of big powers who, intoxicated with might and selfishness, have gone beyond every divine and human boundary can now be heard."
Other leading Iranian figures are also revelling in America's financial crisis - although they identify the causes as earthly rather than divine. Referring to the US military commitments in Iraq and Afghanistan, Akbar Hashemi Rafsanjani, Iran's influential former president, proclaimed: "If the economic crisis in America is becoming a serious threat for the West and the industrial world, one of the underlying reasons is the high costs which the Americans have been forced to spend in the region in the past seven or eight years."
America had also squandered countless tax dollars on the "bottomless coffers of the usurper state of Israel", a commentator in the hardline Kayhan newspaper opined. The American financial crisis, meanwhile, is allowing many Iranians to sleep more easily. It means, they argue, that Washington is now less likely than ever to attack Iran over its nuclear programme. If two wars are straining American coffers, a third now would be ruinous. Mr Ahmadinejad argued last month that the turbulence on Wall Street should encourage the next US president to retreat from George W Bush's "logic of force".
Tehran meanwhile proclaims that its "independent" economy will suffer less than others from the global financial turmoil. Iranian shares have escaped so far the panic that has swept markets elsewhere. The country's all-share index has gained about 20 per cent this year, although inflation has run even faster and now stands at 27.6 per cent. Total capitalisation climbed to US$70bn (Dh257bn) in August from US$40bn in January 2007, said Ali Rahmani, the managing director of Tehran's stock exchange. He said the bourse's lack of links with the outside world was a "strong point" that helped it escape the panic in markets elsewhere.
But regional economists said Iran will not be immune from the credit crunch rippling across the world. Some already argue that the cost of sanctions easily outweighs any unforeseen benefits Iran might gain by being denied access, and direct exposure, to US financial markets. The US imposed unilateral sanctions against Iran after militant students seized the US Embassy in Tehran in 1979, and these have been tightened over the years. Most US sanctions prevent investment in Iranian oil and gas and trading with Iran. The United Nations has also imposed three sets of limited sanctions in the past two years over Iran's refusal to end its uranium enrichment programme.
Mr Ahmadinejad said Iran would survive better than others because its economy had grown more independent since the 1979 Islamic Revolution. He said that falling oil prices, which have dropped partly due to the faltering American economy, would have an impact, but would not derail Iran's economic plans. Ironically, Mr Ahmadinejad, has been under sustained criticism over his handling of the economy. He came to power pledging to give the poor a fairer share of Iran's huge oil wealth. But his policies have caused inflation to soar, and unemployment is rising.
Iranian banks are not invested directly in the US market, but are vulnerable indirectly through business in Europe and Asia, Iranian economists said. "They are subject to the systemic risk. It is multiplied in the case of Iran because of sanctions," one analyst, who declined to be named, told Reuters. Traders complain that the cost of financing trade, such as via letters of credit, has climbed as western banks in particular have increasingly reduced or even cut links to Iran, and perceived risks have risen as a result of US and UN sanctions.
Ayatollah Jannati warned there was no room for complacency. He reminded worshippers of remarks by Shimon Peres, president of Israel, last month, who said he supported neither diplomacy nor military action to force Iran to abandon its nuclear programme. Instead, Mr Peres insisted, the world must target the Iranian economy and encourage the development of alternative sources of energy. "We have to go to the most sensitive area," which was Tehran's economy, Mr Peres said.
Ayatollah Jannati said the Iranian nation had to be vigilant against such threats. mtheodoulou@thenational.ae
