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Wednesday
Jul062011

Speculation Flares over Iran's Political Future in Crumbling Economy

Stockbyte/Thinkstock(TEHRAN) -- The Iranian economy is weighed down by pressures and problems, externally, by sanctions punishing its nuclear program, and internally, by policies of President Mahmoud Ahmadinejad and his government. But is the hurt so bad it could take down the entire system? Or can this economic turnaround boost those already in power?

"Iran’s economy is in shambles. It’s now so mismanaged, they’re starting to worry about its impact on the regime,” says Karim Shirazi, an Iranian analyst in Dubai. ABC News agreed not to use his real name so that he could speak frankly without compromising himself or his company’s work in the Islamic Republic.

Analyst Jason Rezaian, however, says that if the Ahmadinejad regime can expand the economy, "the Islamic Republic could survive indefinitely."

Sanctions are biting harder than ever, but business still gets done through the leaks and loopholes. The poor economy is therefore not changing the regime’s behavior where it counts: on its accelerating enrichment of uranium. President Mahmoud Ahmadinejad’s policies have been largely bad for business and made life harder for most Iranians. Together, that could get Ahmadinejad booted from office, but it probably won’t topple the regime.

Iran is still unable to effectively tap its wealth of oil money, given the bans on foreign investment in the energy sector. That, combined with overall mismanagement, makes Iran’s economy is “fundamentally unsustainable,” in the words of one analyst -- a “patient with many viruses.”

Copyright 2011 ABC News Radio

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