What had been Iran’s most dynamic presidential campaign has now turned into its most serious post-revolutionary political crisis. Allegations of widespread electoral fraud and mass protests have already led to several deaths and could yet lead to more significant political changes.

As MEED went to press, an inquiry into the voting process had yet to be completed by the Guardian Council, which vets the electoral process. Its promise to conduct a limited recount of ballots has failed to bring a halt to the protests.

In the longer term, the differences the crisis has exposed among the country’s ruling political elite are unlikely to be resolved quickly. The impact on the authority of Supreme Leader Ali Khamenei, who was quick to accept the initial result giving the incumbent Mahmoud Ahmadinejad an overwhelming victory, remains unclear, but he appears damaged. Despite his calls for all sides to accept the election result, or pursue legal avenues to challenge it, large-scale demonstrations have continued.

Financial markets have responded calmly to the crisis, with little movement in the Tehran Stock Exchange or international oil prices.

Large turnout

The presidential elections on 12 June attracted the largest turnout in the Islamic Republic’s history, with an estimated 39 million Iranians casting their votes.

The high levels of participation were due to several elements. Even before the election, there was widespread discontent with the country’s economic and social situation, and the election campaign itself was unusual, with six live televised debates between the candidates and a former president, Mohammad Khatami, actively campaigning for Mir Hossein Mousavi, the leading challenger to Ahmadinejad.

More than anything else, the debates, and Ahmadinejad’s performance in particular, mobilised the electorate. Ahmadinejad made personal attacks on his rivals and other leading members of the elite in a style never seen in the politics of the Islamic Republic, let alone on national television.

His attacks on all previous governments since the revolution and condemnation of their performance and involvement in corruption seemed to place the first 26 years of the Islamic Republic under question, and his distortion of economic statistics during the debates led to all of his rivals saying explicitly or implicitly that he was a liar.

Rival opinion polls, which have not been particularly reliable in the Islamic Republic in the past, gave either Ahmadinejad or Mousavi healthy leads.

However, the outcome came as a shock. According to official results Ahmadinejad received 24,527,516 votes, or 63.62 per cent. Mousavi obtained 13,216,411 votes, or 32.85 per cent, while Mohsen Rezai received 1.73 per cent and Mehdi Karrubi 0.85 per cent.

Since the original results were released, several alternative but unofficial figures have emerged giving Mousavi a clear victory.

Most Western capitals have refrained from accepting the result outright and have studiously tried to maintain a position of impartiality, for fear of tainting a candidate by association. However, other governments quickly congratulated Ahmadinejad on his re-election. Within the region, UAE President Sheikh Khalifa bin Zayed al-Nahyan and vice-president and ruler of Dubai Sheikh Mohammed bin Rashid al-Maktoum both sent cables congratulating Ahmadinejad, as did President Ali Abdullah Saleh of Yemen and President Bashar al-Assad of Syria.

By midday on 13 June, there were demonstrations across Tehran, which by late evening had spread to other cities, including Tabriz, Ahvaz and Shiraz. Smoke from burning trash, buses and motorcycles could be seen rising into the sky as police faced angry crowds.

In the early hours of the following morning, some 110 leading political figures and journalists were arrested. They included Mohammad Reza Khatami, the former president’s brother, Mohsen Mirdamadi, the head of the reformist Islamic Iran Participation Front party, Behzad Nabavi, a former deputy speaker of parliament, Ahmad Zeidabadi, a journalist who has been arrested in the past for his opposition to the government, and Mostafa Tajzadeh, a former adviser to president Khatami. The following day, Khatami and Mirdamadi were released.

Riots and demonstrations continued on the night of 14 June in various parts of the country. In Tehran, people shouted ‘Allah Akbar’ from their rooftops in support of Mousavi. This carried echoes of the revolution, when people shouted it from their rooftops in support of Ayatollah Khomeini and against the Shah. By early morning on 15 June, security forces had attacked student dormitories in Tehran and Isfahan using tear gas and batons.

Power struggle

In addition to the street demonstrations, a dangerous battle has emerged within the elite. Former presidents Khatami and Hashemi Rafsanjani objected to the way ballot counting was carried out. Karrubi called the results “shocking and laughable” and “lacking in legitimacy” and added that he did not recognise Ahmadinejad as president.

Mousavi warned that “the people want to know how and which people and groups unleashed this big game” and added “the people will not accept someone who came to power on the basis of cheating”.

Both candidates have said they do not accept the result and have called on the Guardian Council, which has to certify the election result, to run a new election.

In addition, the Mojahedin of the Islamic Revolution, a leftist organisation with deep roots in the Islamic Republic, has issued a statement saying “a coup d’etat has been launched against democracy and republicanism in the Islamic Republic” and calling on political leaders “to stand against the wave of heresy that threatens to plunder the remaining achievements of the Islamic revolution and transform the Islamic Republic into a dictatorship”.

There are several reasons why the results are being disputed. Despite a ruling by the Guardian Council that each candidate could have a representative at each polling station to supervise the counting of ballots, they were not allowed to be present.

Second, news sources attached to Ahmadinejad, such as the Fars News Agency, announced his victory on their websites by 11.30pm, only an hour and a half after polling stations had closed, then withdrew the results 20 minutes later, only to put the same results on their sites by 3am, before counting was finished. The Supreme Leader also approved the election result before the Guardian Council could do so.

Khamenei later asked the Guardian Council to examine the complaints of voter fraud, on 15 June. Until it approves the election results, there is still no legal winner.

Normal life has been severely disrupted while the protests have gone on, but there has not yet been any sign of a collapse in confidence in the economy. The value and volume of trades on the Tehran Stock Exchange have been lower in the days since the election, but the main market index, the Tedpix, which had been rising in the build-up to election day, has fallen only slightly since then. The Iranian rial has fallen in value against the dollar, but only by modest amounts, from IR9,792 to the dollar on the day before the election to IR9,898 by 17 June.

Oil prices have also remained close to their previous levels. West Texas Intermediate, the US benchmark crude, was trading at more than $72 a barrel soon after the election - its highest level this year but in line with its gradual increase in value over recent weeks.

By contrast, the Opec basket of 12 crudes, which includes Iran Heavy, fell below the $70 a barrel mark on 15 June for the first time since 9 June.

Whichever side wins the stand-off, Iran will have entered a new phase. If Ahmadinejad remains president by crushing discontent, an Islamic government rather than an Islamic republic will have come into existence, supported not by elements of republicanism but by brute force, namely the Revolutionary Guard.

If, however, Mousavi and the other members of the elite, such as Khatami, Karrubi and Rafsanjani, along with the mass of people on the streets, succeed in reversing the results and getting Mousavi elected, Iran would have undergone a second constitutional revolution. The power of the Supreme Leader and the Revolutionary Guard would be effectively reduced and Iran would have taken a big step in the transition to a fully republican system of government.