June 27, 2005

Iran’s president-elect triggers Western concern

By Paul Hughes

TEHRAN (Reuters) - Ultra conservative President- electMahmoud Ahmadinejad sparked Western fears about Iran's nuclearprogram and helped push oil prices over $60 on Monday, but theEU and analysts warned against any hasty judgments.

The former Tehran mayor has adopted a conciliatory stancesince his election win on Friday, vowing to press on with thenuclear program while carrying on talks with the EuropeanUnion. He says Iran has no real need for ties with Washington.

The United States accuses Iran of secretly trying to buildnuclear weapons, and Defense Secretary Donald Rumsfeld said onSunday Ahmadinejad was "no friend of democracy (and) no friendof freedom." Iran denies the nuclear arms charge.

The EU shares U.S. concerns but the bloc's foreign policychief Javier Solana said he had an open mind about Ahmadinejad,who scored a crushing victory against veteran politician AkbarHashemi Rafsanjani in a presidential election run-off onFriday.

"At this point in time I am just in a waiting mood. I thinkthe most important thing is to wait and see how the words aretranslated into action," said Solana.


"It's early days. Election speeches often fail to gettranslated into actual policy. Let's not rush to judgment,"said Mehdi Varzi, a leading authority on Iranian energy.

"For those who fear the worst, there could even be somepleasant surprises around the corner," said Varzi, president ofthe Varzi energy international consultancy.

Analysts say many European governments had been banking ona win for Rafsanjani, who had portrayed himself as the onlypolitical figure in Iran with the experience and influence toresolve the nuclear issue and repair ties with Washington.

Ahmadinejad, 48, who takes over from reformist PresidentMohammad Khatami on Aug. 3, has populist plans to tacklepoverty through subsidies and cheap loans at a time when statecoffers are bulging thanks to high oil prices.

"Oil at $60, a gift for the next president," said theAftab-e Yazd newspaper. Iran is the world's fourth largest oilexporter.

But Ahmadinejad's track record as a former member of thehardline Revolutionary Guards and outspoken commitment to theprinciples of the 1979 Islamic revolution have convinced somethat what he says and how he will act may be very different.

In Iran's complex mixture of democratic and theocraticgovernment, the last word on major policy issues lies withSupreme Leader Ayatollah Ali Khamenei who tends to adopt ahardline stance on foreign policy and other matters.

Ahmadinejad, despite being Iran's first non-clericpresident for 24 years, is considered more religiouslyconservative than leading political clerics like Khatami andRafsanjani.

Unlike them he will probably not challenge Khamenei'sviews.

But Iranian analysts do not expect the new government toadopt an immediately hostile attitude toward the West.

"He will probably be quite cautious on foreign policy atfirst and concentrate more on his domestic agenda of wealthredistribution and social justice," said analyst MahmoudAlinejad.

Iran says it wants nuclear technology to generateelectricity and not to make bombs. It has agreed to freeze somenuclear work while it negotiates a long-term arrangement withthe EU, talks on which are due to resume in August.

The Tehran Stock Exchange bounced back slightly on Monday,closing 0.2 percent higher following two days of losses, afterAhmadinejad denied rumors he was opposed to the bourse.