The Powerful Nutcase of Iran

Mr Ahmadinejad is a nut-case. Unfortunately, he is also very powerful and his nuttiness can harm a lot of people, not just Iranians. He’ll come to a sticky end, undoubtedly, but he will also lead a lot of his compatriots to misery and doom.

This is the only economy in the world – indeed possibly in world history – in which you can borrow money from the bank and then receive a higher rate of interest by depositing it in the same bank.

Mr Ahmadinejad, who says he is proud of his ignorance of economics, also seems to believe the laws of supply and demand do not apply to the Islamic republic. [BBC]

Iran has the largest combined natural gas and oil reserves in the world, and is the third largest exporter of oil. One would have expected Iran to be a wonderfully developed economy. But it isn’t. It is well recognized that natural resource wealth, if mismanaged, can be a curse rather than a boon. Add theocracy to oil and you have the makings of a powerful bomb — a suicide bomb.

Two broad generalizations. First, economic development requires good policies, not just a wealth of natural resources. That implies good leadership. Good leadership depends on a dynamic, forward-looking, and scientific culture. Second, mixing religion with affairs of state is a bad idea.

India has yet to learn those two lessons. Its economic policies continue to be socialistic — meaning, it is static, regressive, and harmful. This is understandable as the policy makers are neither smart nor good. Most disastrously, the Congress led UPA government is mixing theology with state policy. It sits in judgment and privileges one religion over another.

I look at Iran and just hope that India does not go that way.