In a way, Iranian restaurateur Mohsen Misaqi notes, President Mahmoud Ahmadinejad has fulfilled the promise to put oil wealth on the table of every family that swept him to power four years ago. "There is more money," said the middle-aged businessman in downtown Tehran. "But with much less buying power. One cannot but feel economic hardship as a result of higher prices for almost everything."
A slump in the West checked oil's surge last year, but rising consumer prices -- as well as a lack of jobs -- are still the loudest complaint in Tehran as the Islamic Republic heads to a presidential election where Ahmadinejad faces a challenge from reformers. People like housewife Behjat Soltani agree the economy is Ahmadinejad's weakest point in the run-up to the June 12 poll:
"Our family's economic situation has deteriorated considerably compared with four years ago," said the 41-year-old, wearing a black headscarf as she bought food and other groceries in a small Tehran store. But if such bread-and-butter issues work against the incumbent among some in the capital, Ahmadinejad may be stronger electorally in the countryside. The rural poor helped vote him in last time, have benefited from his largesse and like his down-to-earth image.
"He still has an enduring popularity, although probably not as high as a few years back, among the urban and rural masses," said Karabekir Akkoyunlu of risk consultancy AKE Ltd in London. When the state coffers were swelled by an unprecedented inflow of petrodollars, Ahmadinejad's government went on a spending spree after his surprise 2005 election victory, lavishing credit and cash during frequent provincial trips to help the needy.
During a typical visit to the north-western province of Qazvin in May, his government announced 160 local development initiatives from roads and water supply to sports facilities. The politicians seeking to deny him a second term accuse him of "charity" economics and of trying to lure voters with handouts, such as much-publicised distribution of "surplus production" potatoes in different locations earlier this year.
Former Prime Minister Mirhossein Mousavi, seen as Ahmadinejad's main moderate challenger, says this offends people's dignity without addressing the root causes of poverty.
"STILL GROWING" Among voters in the capital, home to more than 15 percent of Iran's rapidly urbanising population of more than 70 million, economic frustrations tend to overshadow Iran's nuclear dispute with the West, even though the conservative president's rivals say his defiance hurts the economy by isolating the country. Inflation may have come down from last year's 30 percent peak, reaching an annual 18 percent in March, but many Iranians say they still struggle to afford food and other basic items.
Government critics also argue that free-spending policies while oil prices were soaring left the world's fifth-largest crude exporter vulnerable to the tumble that started in 2008. Despite a sharp recovery this year, crude remains below $75 a barrel, the level at which the International Monetary Fund last year said Iran would show current account deficits.
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