How crazy is Mahmoud Ahmadi-Nejad?

Iran’s President Mahmoud Ahmadi-Nejad had some lovely words for Israel yesterday, according to the FT’s Gareth Smyth:

Mahmoud Ahmadi-Nejad, Iran?s fundamentalist president, on Wednesday declared that Israel should be ?wiped off the map? and warned Arab countries against developing economic ties with Israel in response to its withdrawal from Gaza. His remarks, delivered at a conference in Tehran entitled ?A World without Zionism?, led to diplomatic protests by the UK, France and Spain, while Shimon Peres, Israel?s deputy prime minister, said Iran should be expelled from the United Nations. In Washington, spokesmen for the Bush administration said the statement underscored US concern over Iran?s nuclear weapons programme.

The most depressing sentence in the story? “US analysts noted that the president?s remarks were not a departure from hardline Iranian rhetoric and did not represent new policy.” Well that’s a relief. Whenever political leaders start talking crazy talk, some political scientist like me usually comes out of the woodwork to explain the underlying rationality of such a move. After reading this Financial Times piece by Smyth and Najmeh Bozorgmehr, however, I’m beginning to wonder about Ahmadi-Nejad’s competence:

Complaints about rising chicken prices during the holy month of Ramadan mark the first widespread disquiet about president Mahmoud Ahmadi-Nejad, just two months after he became Iran’s president. Ayatollah Ali Khamenei, Iran’s supreme leader, last week acknowledged public concerns in Friday prayers, saying it was “unfair to drag the government to the table of expectations after only two or three months”. Private business was wary of Mr Ahmadi-Nejad’s rhetoric even as he won June’s landslide election victory, but is now approaching a crisis of confidence. “Name me one sector that is working,” says a government official. The Tehran Stock Exchange (TSE) has dropped 20 per cent since the election, with the Tehran price index (Tepix) closing on Monday at 10,014, perilously close to the psychological 10,000 mark level. Yesterday the exchange was closed for a public holiday. A sense of malaise in the economy has resulted both from Mr Ahmadi-Nejad’s statist rhetoric and from tension with Europe and the US over Iran’s atomic programme. Hossein Abdeh-Tabrizi, secretary-general of the TSE, has linked falling share prices to the nuclear issue. Business circles welcomed the new government’s economic team and applauded parliament’s plan to reduce subsidies on the sale of imported petrol, but Mr Ahmadi-Nejad has himself spread confusion over the government’s direction. The president reacted to falling share prices by calling on public bodies, which own about 80 per cent of shares, to control the decline. At the same time, the commerce ministry banned cement exports to help meet domestic demand, hitting the cement companies which comprise about 30 per cent of the bourse. “The government seems to jettison long-term policies [favouring the market] for short-term reasons and so it’s not clear where it’s heading,” says an economy analyst. Iran’s private businesses are also worried about possible UN Security Council sanctions over Iran’s nuclear programme. Questioned last Thursday by reporters, Mr Ahmadi-Nejad refused to deny that Tehran is blocking letters of credit for companies from South Korea, the UK, Argentina and the Czech Republic, countries that last month voted for a resolution at the International Atomic Energy Agency finding Tehran in “non-compliance” with the nuclear non-proliferation treaty. “Economic relations have to be balanced with political relations,” says Mr Ahmadi-Nejad. South Korean direct and indirect exports to Iran and its investment – mainly in the oil and auto sectors – were about $3bn in 2004. “When you compare this with Korea’s $55bn trade surplus with the US, it’s hard to see what Iran thinks it can achieve from such pressure on Korea,” says the analyst.

I can’t see the rationale either. Maybe these kind of sanctions weaken Ahmadi-Nejad’s domestic political opponents, but in a country like Iran there are better ways of weakening one’s political opponents. Even in a world of $60 oil and the U.S. bogged down in Iraq, this kind of political behavior is not heakthy. So is Mr. Ahmadi-Nejad crazy like a fox — or just crazy? Discuss.