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General elections are close in Iran, and the country’s economy is in shambles. This situation, however, is not related to the sanctions.

Iran now pumps out as much oil as it can, and foreign companies still compete fiercely for oil and gas development projects there. Skyrocketing oil prices in the wake of the Arab Spring events easily offset whatever small effect the sanctions had on Iran.

Iran’s economic troubles are similar to those of other Muslim countries, from Egypt to Saudi Arabia. A burgeoning population, an influx of rural residents into the towns, an inability to compete internationally in the technological economy, socialist policies with heavy subsidies, gross corruption and mismanagement, unsupportable military expenses—these and other factors combined to devastate the Iranian economy, with or without US input.

Moreover, Iran’s population attributes the country’s economic troubles to the secular government rather than to the supreme ruler. That weakens Ahmadinejad, who is a moderate compared to Grand Ayatollah Khamenei.

And no amount of economic trouble would prompt Ayatollah Khamenei to relinquish his nuclear program, because Shiite military dominance is for him a religious issue.

Municipal strikeAcross-the-board municipal strikes in Jerusalem, Tel Aviv, and Haifa are as condemnable as any strikes, because they breach the employment contract, but this time they highlight an interesting point.

A while ago, responding to ’social justice’ demonstrations, the government took money from some programs in order to fund other programs demanded by the demonstrators. But both sets of programs are equally wasteful, unjust, and unacceptable in a free-market society.

The municipal strike demonstrates to the government that it cannot keep taking money from silent groups to benefit vociferous ones, because the silent strata can easily become equally vociferous. The government has to devise a meaningful policy to dealing with demands for redistribution—refusing them all rather than resorting to instead of ad hoc cut-and-patch attempts.

The Public Security minister has announced what has long been a secret, though widely suspected statistic: the Arabs, who make up some 20% of the population, are responsible for 70% of homicides. Nor should the balance be blamed on Jews: Africans and non-Jewish Russians are also disproportionally represented among the criminal class.

Media reported that the joint air force drill was canceled, but this is not the case; the drill was postponed until the year’s end. Some view that delay as a politically correct euphemism for cancellation, but no, American troops remain in Israel.

The common explanation for the cancellation or postponement is that it was prompted by Moshe Yaalon’s comments accusing Obama of selling out Israeli security for Iranian oil; but this cannot be correct, because Yaalon is a relatively small guy in the government, with a history of controversial opinions.

It is possible, therefore, that the drill has been postponed so as not to distract the IAF from preparing for an attack on Iran.

January 2012
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