Iran's President Mahmoud Ahmadinejad Thursday dismissed US elections as a "battleground for the capitalists", a day after Barack Obama's re-election.

Ahmadinejad, whose own 2009 disputed re-election sparked protests that were brutally crushed, told a forum in Bali island intended to promote democracy that the Western system meant only the wealthy few held power.

At the start of the two-day Bali Democracy Forum, attended by leaders including Australian Prime Minister Julia Gillard and Afghan President Hamid Karzai, the Iranian president criticised the situation in Europe and the US.

"An election, which is one of the manifestations of the people's will, has become a battleground for the capitalists, and an excuse for hefty spending," he said.

An estimated $6 billion was spent in US federal races, making the 2012 general election the most expensive poll in American history, experts have said.

Ahmadinejad, who did not comment directly on Obama's victory over his Republican rival Mitt Romney, added that "democracy has turned into the rule of a minority over the majority".

He said problems continued "even in countries who claim to be the forerunners of democracy".

"Slavery, colonialism and rights abuses continue to be imposed on human beings," he said, without singling out any countries in particular for criticism.

Iran is regularly criticised for its own human rights record, such as the high number of executions.

The president, whose country's disputed nuclear programme has led to crippling international sanctions, made only passing reference to nuclear activities.

"Today there is the development of some weapons even more dangerous than atomic arms," he said without elaborating.

The West claims that Iran is trying to build a nuclear bomb but Iran says its nuclear drive is purely for peaceful purposes.

It is the first time that Iran has attended the democracy gathering, now in its fifth year. Critics say the Islamic republic is seeking to use the meeting to combat its growing isolation as UN and European Union sanctions bite.

Attending the summit "fits in perfectly with the Iranian government strategy of building bridges" with countries outside the West, Amnesty International Iran researcher Drewery Dyke said.

Indonesia, a moderate Muslim-majority country, has maintained strong ties with the Islamic republic.

Iran is currently chair of the Non-Aligned Movement, a grouping of 120 countries, and in August hosted a meeting of the group that it trumpeted as a triumph over the West's attempts to isolate it.

Other high-profile participants at the Bali meeting include Thai Prime Minister Yingluck Shinawatra and Turkish Prime Minister Recep Tayyip Erdogan, as well as UN High Commissioner for Human Rights Navi Pillay.

There is tight security for the event, which has in the past attracted few top names, with some 2,300 police deployed to guard key areas.

The resort island last month held 10th anniversary commemorations for the October 12, 2002 nightclub bombings that killed 202 people, including 88 Australians.