September 01, 2008

Meeting the Challenge: U.S. Policy toward Iranian Nuclear Development (Page 2)

Originally published in Bipartisan Policy Center

Continued from Page 1

 

Historical Background
 

Background

U.S. policymakers often operate in a sterile environment, looking at foreign policy challenges as intellectual exercises or treating every state as a general template upon which to craft U.S. strategy. But countries develop policies in the context of their history and culture. This is especially the case with the Islamic Republic of Iran, where religion, politics, and nationalism are often so intertwined that they become inseparable. While the problem at hand for the bipartisan array of U.S. legislators, policymakers, and practitioners may be how to prevent the Islamic Republic from developing a nuclear weapons program, understanding Iran’s strategy and decision-making requires understanding its background and view of itself.

Many Middle Eastern states are artificial, their borders haphazardly drawn in backrooms and chancery gardens. This is not the case with Iran.   With only brief interludes of foreign conquest, an Iranian entity has occupied the same area for more than 2,500 years. While Europe for centuries knew Iran as Persia, in the local language, the name has always been Iran, or ‘land of the Aryans.’ Iran’s imperial legacy remains vital to Iranian self-awareness. Most Iranians, be they Islamist or secular, believe that Iran is a great civilization that deserves to be treated as a regional hegemon, if not a great power. Arabs, Afghans, and the Turkic peoples of Central Asia complain that Iranians treat them with disdain and as cultural inferiors. Iran’s sense of superiority is a constant irritant between Iran and its neighbors.

Knowing the Iranian historical narrative is crucial if policymakers are to understand the contemporary Iranian perspective. More so than in the United States or even Europe, history matters. The origins of the Iranian people are shrouded in mystery. The Shahnameh or “Book of Kings,” Iran’s national epic, reaches back into the mist of time. Chapters move from the mythical to the true, tracing the lineage of generations of Iranian shahs. Within written history, Sumerian scribes mention the first Iranian towns, some of which, like Susa (Shustar), are also mentioned in the Bible. The Babylonians tried on numerous occasions to exert their authority into Iran. They discovered that it was one thing to conquer a town, but quite another to hold it. Through the ages, Iranians have taken great pride in the cohesiveness of their society.  

It was during the ninth century b.c. that Assyrian chronicles first mention an Iranian monarchy; they describe tribute sent by the kings of “Parsua.” In 559 b.c., a vassal king in Parsagardae, not far from modern Shiraz, rose in revolt and united many Iranian tribes under his rule. An apt propagandist and military tactician, Cyrus the Great consolidated Iran and its neighboring lands into a vast empire. At its peak, the Achaemenid Empire—referred to as the Persian Empire in elementary school world history texts—stretched from Egypt and Greece thousands of miles into Afghanistan and Pakistan.   School children still read accounts of the Achaemenid Empire’s war with ancient Greece. Among the most famous Achaemenid cities was Persepolis, where the last Shah of Iran celebrated 2,500 years of Persian kingship in 1971.

In 331 b.c., the armies of Alexander the Great swept into Persia.  He left no successor, and the territories under his control fractured into minor local dynasties. The Persian Empire rose again in the third century as the Pathian state, and stretched from modern-day Armenia to Central Asia and the Arabian Sea. Such history remains important today as Iranian policymakers implicitly look at territory once under the Persian empire’s control as their near abroad in which they, and not others, have a right to dominate politically and diplomatically. 

An internal revolt ended the weakened Parthian Empire, but from its ashes arose a third great Persian Empire, that of the Sassanids, which stretched from Armenia and Syria along both sides of the Persian Gulf and all the way to India. Only the newly Christianized Byzantine Empire prevented Sassanian kings from pushing their domains into Europe. The wars of attrition between these two empires exhausted both and left a vacuum for the Prophet Mohammad and his Arab armies to fill. 

The Arab invasion of Iran changed the Middle East. Lured by promises of fiefdoms and booty, the Islamic armies conquered most of Iran by 644 ad. In less than 25 years, the domain of Islam had expanded from the deserts of Arabia to Libya and Afghanistan, an area larger than Europe. The conquering armies and their attendants settled. They needed administrators and found them in Iran. Today, many Iranians, even while embracing a multifaceted identity, take pride in their role of shaping the early practice of Islam. Iran’s nobility, many of whom converted to maintain their privileged social status, facilitated the spread of Islam. A sense of national identity, however, remained as even those who converted to Islam continued to celebrate traditional Iranian holidays like Nowruz, the Persian New Year.

Not all was well in Iranian lands, though. Iran became a provincial backwater. Arab rulers tended to marry other Arabs creating an ethnic stratification that discriminated against Persians. Even as Arabs adopted many traditional Persian bureaucratic practices, Arab tribalism disadvantaged Persians. The early Shi‘a tapped into anti-Arab sentiment and found support in Iran.   Antagonism between Arabs and Persians has deep roots and goes both ways: after all, God had chosen to reveal the Qu’ran in Arabic, not in Persian.

When, in 762, the new Abbasid dynasty founded a new capital called Baghdad, Iranian influence increased. While today the ethnic divide between Arabs and Persians correlates roughly with the border between Iraq and Iran, this was not always the case. Iraq was once the heartland of the Iranian Empire. The first Sassanian capital was at Ctesiphon, 21 miles southeast of Baghdad, not too far from modern Salman Pak.

Ethnic tensions continued to strain the Islamic empire. Civil war erupted in the ninth century. It was a fight between Arabs and Persians. While the Persian pretender to the throne triumphed, he was not able to overcome the centripetal forces which plagued the Islamic Empire; the separatist instinct would first take hold in Iran. 

Subsequent centuries would witness the rise and fall of many Iranian dynasties. Some remained local rulers, while others consolidated control over much of what became modern Iran. Almost all were Sunni, although in the tenth century, a Shi‘i dynasty briefly ruled Iran and even seized Baghdad. In the eleventh century, a Turkish dynasty controlled the lands.

During this period, the cultural and political fulcrum of the Islamic World shifted eastward. Iran became central, while the Arabian Peninsula and the Levant became backwaters.   Iranian rulers patronized the arts and sciences. They founded universities. Poetry thrived. This is one of the reasons why the Crusades, central to the European historical discourse, were but a blip in the Islamic narrative of the time.

In the thirteenth century, Mongol hordes overran the Iranian plateau, sweeping away the autonomous Iranian states. Iran became part of a huge, if ephemeral, new empire which stretched from Eastern Europe across the plains of Russia and the mountains of Iran to China. Islamic art blossomed, as Chinese and Iranian craftsmen familiarized themselves with each others’ work and methods. The Mongols were essentially a nomadic, pastoral people suddenly faced with the task of managing a vast empire. They did what the Arab invaders had done 600 years before: They turned to Iranian administrators. But rather than build the state, the Mongol governors tasked their administrators with looting it. They sought to extract as much revenue as possible from the population. By 1335, their control disintegrated and with it the unity of Iran. Tamerlane (Timur) briefly conquered Iran but, like the Arabs and Mongols before him, he could not retain control. Rival Turkish dynasties arose in the fifteenth century to take his place, but it was only in the sixteenth century that stability returned to Iran. 

The impact of the Safavid dynasty, founded in 1501, still reverberates. Shah Ismail, its founder, formally converted Iran to Shi‘ism. However, only in the eighteenth century did the majority of Iranians become practicing Shi‘a. The conversion fused a national religious identity with which Iranians, regardless of ethnicity, could differentiate themselves from their neighbors. The period was a golden age for Iran. The Shah’s armies conquered Baghdad, most of eastern Anatolia, the Caucasus, and western Afghanistan. The greatness of the era is apparent to any Iranian or tourist who walks among Isfahan’s palaces, mosques, gardens, and squares, but it did not last.

Subsequent weak rulers took their toll and, by the early eighteenth century, Iran again faced open revolts along its periphery. An Afghan general swept through and declared himself Shah but, by the end of the century, the power of the central government again disintegrated.

From Iran’s tribal patchwork arose the Qajar dynasty. Their tenure coincided with the penetration of notions of modern nationalism upon the Iranian state. Under Qajar tutelage, Iran transformed itself into a modern nation state. At the beginning of Qajar rule, communications between center and periphery were weak.   The road system was in shambles. Caravans of camels and donkeys carried coins and goods between towns since Iran had no paper currency. There were no banks. While far from stagnant, Iran had never recovered from the inflation that accompanied the influx of New World gold and silver into the Old World. Until the mid-nineteenth century, the chief Iranian export was silk, although opium and cotton soon became more important crops. The economy was, relative to the outside world, moribund. Inflation and political malaise in the early twentieth century undermined confidence. 

During the Qajar period, Iran would experience both internal and external challenges. Throughout the latter half of the nineteenth century, the Iranian government witnessed the development of a mass movement culminating in a constitutional revolution. Liberals seeking to subordinate the shah to the rule of law, monarchists, and the Islamic clergy clashed, sometimes peacefully and at other times, with considerably more violence. When the smoke cleared, the era of absolute monarchy had ended.

Perhaps the greatest legacy of the Qajar period, however, was Iran’s clash with European powers. During the Qajar period, the world shrank, as did Iran, both literally and figuratively. Iranian rulers had always struggled to meet and match their neighbors militarily. Suddenly, though, Iran was faced with a challenge much more potent than Turkmen raiders, Ottoman musketeers, or Mughal cannons. High mountains and the vast emptiness of the Iranian plateau were no longer sufficient to shield the Iranian government from the technologically-superior forces of the Russian army or British navy. 

In the first decades of the nineteenth century, the Russian Empire wrested control of what today is Armenia, Azerbaijan, and part of Georgia from the Iranian state. The Shah lost much of his claim to western Afghanistan following the Anglo-Iranian War of 1856-1857. A boundary commission cemented Iran’s eastern frontier with what today is Pakistan between 1871 and 1873, and Tehran and Moscow only set Iran’s border with what is now Turkmenistan in 1894, after years of steady Russian encroachment. Only in 1970 did a United Nations-sponsored referendum end Iranian claims to suzerainty over the Persian Gulf island-nation of Bahrain, although senior figures in the Islamic Republic have recently reasserted Iran’s claim to the Arab island nation. While the Iranian border with what is now Iraq has been more or less constant for a century and a half, the Iran-Iraq war notwithstanding, many Iranians remember that in centuries past, Iranian rule stretched well past the Tigris and Euphrates rivers. 

Still, despite economic stagnation and military weakness, successive shahs kept Iran independent, even as every other country in the Middle East, Central Asia, and South Asia fell to various European powers. Even as they preserved their independence, Iranians translated their territorial losses into a sense of victimization that has helped shape Iranian nationalism into the twenty-first century. Well before the United States became active in Iranian affairs, Iranian reaction to British and Russian activities created a mindset in which Iranians interpreted outside interests through a lens of conspiracy theories.

At the same time, Iranians—whether in favor of theocracy or opposed to it—feel that Iran’s importance transcends boundaries. While the country is large, Iranians consider their sphere of influence to be larger. When Western governments may complain of Iranian interference beyond its borders, the Iranian government convinces itself that it is merely exerting its influence in lands that were once its own, its near-abroad.

Iran’s strategic importance grew with the 1905 discovery of oil. This became as much a curse as a blessing, feeding both corruption and an addiction to easy riches, to the detriment of industrial development. Russia and Great Britain divided Iran into spheres of influence in 1907.  The Allied powers occupied Iran both in World War I and World War II. The Red Army’s refusal to withdraw from Iranian Azerbaijan after World War II sparked the first crisis of the Cold War. As the Cold War accelerated, relations between the United States and Iran grew tighter. Two years after the Iranian Prime Minister Mohammad Mosaddeq nationalized the oil industry in 1951 and showed signs that he might move Iran toward the Soviet orbit, the U.S. and British intelligence services helped manufacture a coup which deposed Mosaddeq and reasserted the primacy of the Shah.

The following decades saw the Shah both consolidate power and impose a rapid program of economic and social reforms. Iran’s economy grew, but so did disparities between rich and poor, urban and rural. Many clerics—including Ayatollah Ruhollah Khomeini—opposed such reforms as women’s suffrage and equality of all citizens under the law, regardless of their religion. The Shah expelled Khomeini as his denunciations grew more virulent and his incitement more violent. From exile Khomeini continued to agitate against the Iranian monarchy and for his concept of Islamic government. 

In the days before the Islamic Revolution, Iran’s Muslim clergy repeatedly slammed the Shah for spending billions on weapons while Iranian families went hungry. Several scholars argue that oil wealth fed the growing disparity between rich and poor and contributed to the Islamic Revolution. Ironically, the Islamic Republic—especially under President Mahmoud Ahmadinejad—has repeated many of the spending patterns that caused so much upheaval in the last years of the shah’s reign.

 

Demographics and Diversity

Geography has also influenced Iran’s political development. While kingdoms and empires rose and fell throughout what now is Iran, the mountainous terrain bred fierce independence among Iran’s constituent parts. Until the late nineteenth century, many roads between Iranian cities were at best rudimentary. With water a limiting factor for travelers, paths and camel tracks meandered widely across the Iranian plateau. The result was often internal isolation and weak central government rule. It could take weeks for a traveler to traverse Iran from its ancient capital of Tabriz to the border of what is now Pakistan. Local sheikhs and chieftains might have paid lip service to the central government, but hundreds of miles and weeks away from his court, they were in effect independent. Modernity may have bestowed the central government mechanisms to impose control, but underlying Iranian governance has often been a sense of vulnerability.

Iran’s size and topography have allowed it to weather intervention and invasion, and have given its leadership a sense of strategic depth which other regional states like Israel and the Persian Gulf emirates lack. External isolation and the delicate balance between center and periphery have shaped Iranian history and society. Behind its natural fortress, the civilizations of the Iranian plateau have planted deep roots.   As elsewhere in the Middle East, mountainous, rough terrain has provided shelter and safe-haven for minorities and indigenous cultures. This has transformed Iran into a heterogeneous country. Today, Iran is more an empire than a nation. While Iran is officially a Persian-speaking country, half of Iranians speak a language other than Persian at home. Supreme Leader Ali Khamenei, today the most powerful man in the Islamic Republic, is an ethnic Azeri. Mohammad Khatami, the reformist president so-often embraced by the West as a reformer, is half-Azeri. Ayatollah Mahmoud Hashemi Shahroudi, Iran’s judiciary chief, is more comfortable speaking Arabic than Persian.

Azeris constitute the largest ethnic minority—approximately one-quarter of the population. More Azeris live in Iran than in independent Azerbaijan. While Iranian Azeris are scattered throughout the country, their largest concentration is in the Iranian provinces of West and East Azerbaijan; the capital of the latter is Tabriz–capital of all Iran during much of the fifteenth century–and for centuries after the seat of Iran’s crown prince.

Approximately eight percent of Iran’s population is Gilaki or Mazandarani. Concentrated along the Caspian littoral, these people speak a language related to Persian, but sharing major similarities with the Zazaki of Turkey. Perhaps seven percent of Iran’s population is Kurdish. While predominant in the Iranian province of Kurdistan, they are not limited to it. Iran often names provinces after an ethnic group, but either makes the province smaller than the concentration of that minority or, as in the case of Azerbaijan, divides it so as to undercut separatism. Arabs no longer predominate in the oil-rich Khuzistan province across the Shatt al-Arab from Iraq, but Arabic-speakers do make up approximately three percent of Iran’s population. Smaller minorities of Baluch live along the Pakistani border, while many Turkmen live in northeastern Iran, across from Turkmenistan.

The sensitivity of Iranians to separatism runs deep. Throughout the twentieth century, Iran experienced many separatist movements—often supported if not sponsored by foreign powers. Iranians remember British assistance to Arab and Baluch separatists in the nineteenth and early twentieth century and Soviet support for separatist movements in Gilan, Azerbaijan, and Kurdistan. Often, Iranians and their government conflate calls for federalism or ethnic rights with separatism and suspect a foreign hand.

Despite Iran’s linguistic, ethnic, and religious diversity, the Persian language is a unifying factor among Iranians. Arabic may be the lingua franca of the Middle East from the Mediterranean to the shores of the Persian Gulf, but Persian takes on that role from the mountains of Kurdistan through the bazaars of Central Asia and down into the river valleys of India. Indeed, the sixteenth century Moghul Empire made Persian the official language of India. Only in 1832did British army officers and colonial masters force the princes and rajas of the Indian subcontinent to conduct business in English. Nevertheless, Persian remains the language of culture and poetry throughout much of West, South, and Central Asia. School children well beyond Iran’s borders memorize the poetry of famous Persian poets like Rumi, Saadi, and Hafez. Many in Afghanistan, Uzbekistan, and Tajikistan speak Dari and Tajik, more dialects of modern Persian than languages in their own right.

 

Religious diversity

Iranians, both inside their homeland and in the Diaspora, cringe at the caricature of Iran as a land of firebrand ayatollahs and religious radicals. While Shi‘ism has had a spotty presence in Iran since its inception as a distinct theological movement, it only became Iran’s official religion in the sixteenth century. When the shah converted Iran to Shi‘ism, there were so few Shi‘a clerics in Iran that he had to import them from Lebanon. It was not until the eighteenth century that the majority of Iran’s population became Shi‘a. Today, almost ninety percent of Iranians are Shi‘a, but Sunni Islam still predominates in the mosques of Iranian Kurdistan, the plains of eastern Mazandaran (along the border of Turkmenistan), and in scattered towns and villages along the southern Strait of Hormuz and the border with Pakistan and Afghanistan. While Sunni Muslims can, in theory, exercise their religious beliefs without interference, the constitution of the Islamic Republic discriminates against Sunnis. Many Sunni Iranians complain about occasional harassment and oppression on the part of the central government. While Tehran, a city of over ten million people, has thousands of Shi‘i mosques, dozens of churches, an Armenian cathedral, and even a handful of synagogues, there are no Sunni mosques in the city, even though there are more than six million Sunnis in the country. 

Ninety-seven percent of Iranians are Muslim, but it would be a mistake to overplay religious identity. Many young people and the middle class, disgusted with the corruption of the ruling clerics, have abandoned all but the most superficial Islamic patina. Many Iranians drink alcohol, and young women constantly flout conservative norms of dress. Iranian Muslims who consider themselves religious often speak of din-e khodeman, “my own personal religion,” to differentiate themselves from the public religion imposed by the state.

Tens of thousands of Iranians practice religions other than Islam, although the population of non-Muslim Iranians has decreased significantly in recent years because of state-sanctioned discrimination. Between 1976 and 1986, for example, the number of Christians in Iran declined from 169,000 to 98,000. Isfahan has a large Armenian quarter, and tucked away along side streets in major cities are smaller Syrian Orthodox and Anglican churches. As evangelical Christians made some inroads by conversion in the late 1990s, the Islamic Republic increased persecution; government agents have since murdered several priests.

While Iran’s millennia-old Jewish community still numbers perhaps 20,000, this is but one-third of its population a quarter-century ago. Iranian Jews remain fiercely proud of their Iranian culture, but the disappearance, apparently at the hands of Iranian authorities, of nearly a dozen Jews fleeing the country during the Iran-Iraq War, coupled with the 1999 arrests of 13 Jews—one as young as 16—on trumped up espionage charges, has accelerated the Jewish exodus. Many Islamic Republic hardliners and ideologues also subscribe to Shi‘a interpretations of Jews as religiously unclean. While the Jewish community, as with the Christian and Zoroastrian communities, has one representative in the Majlis, the Islamic Republic’s parliament, most community members view these representatives as Quislings.

Iran does not keep official statistics on its Baha‘i population, but some Baha‘i claim their community in Iran numbers as many as 400,000. Baha‘i’s follow the teachings of the nineteenth century prophet Baha’ullah, himself a disciple of Ali Mohammad Shirazi, better known as the Bab (Arabic for ‘gate’). Shirazi, whom Iranian authorities executed in 1850, preached a doctrine of progressive revelations, and sought to foreshadow the coming of a new prophet. However, because Muslims consider Mohammad to be the “seal of the prophets” and the Qu’ran as God’s final revelation, ayatollahs and other Shi‘i clerics consider Baha‘is to be heretics. Discrimination against Baha‘is in the Islamic Republic is severe. Baha‘i children cannot attend Iranian universities without first renouncing their faith. The Islamic Republic does not allow Baha‘is to bury their dead in public graveyards. While Baha‘is once contributed disproportionately to Iran’s intellectual and governing class, they now experience wholesale discrimination in the workplace.

The only sectarian minority not to suffer a population decline in recent decades have been the Zoroastrians. The dominant religion of the ancient Achaemenid Empire, Zoroastrians follow the teachings of the pre-Islamic prophet Zarathustra, also known as Zoroaster, who preached the duality of good and evil. Zoroastrianism is today centered in the desert cities of Yazd and Kerman in central and southeastern Iran. Iran’s Zoroastrian population has for the past half-century remained around 60,000, although some casual estimates indicate an increase in recent years. Despite Iran’s sectarian diversity, religion has been a unifying factor. Iranians root their national identity in their pre-Islamic past, much to the chagrin of the ruling clerics. Every March 20, not by coincidence the Spring Equinox, Iranians celebrate Nowruz, the Persian New Year. The festival dates back to the empires of ancient Persia and Mesopotamia. Many of the traditional practices such as lighting of bonfires have origins in Zoroastrianism.

 


Current Situation in Iran
 

Power Centers

Governance in the Islamic Republic is convoluted. Ultimate authority rests with the Supreme Leader, first Khomeini and, after his death in 1989, Khamenei. In practice, the Supreme Leader wields near absolute power. He may not involve himself in every decision, but he exercises ultimate veto power. Iran’s multiple power centers serve as checks upon the emergence of any power base that could rival the Supreme Leader’s.

Normal institutions are matched by parallel revolutionary institutions. When Khomeini took power, he inherited institutions he did not trust. He resented the army for its past loyalty to the Shah, and formed the Islamic Revolutionary Guard Corps which he equipped with better weaponry and facilities. The result is a system with in which several parallel and, sometimes, overlapping institutions and power centers operate.

 

  •  The Supreme Leader: In most systems, a president would be head-of-state, but in the Islamic Republic, the president’s power is more symbolic than real. The Supreme Leader and his office trump the president and his ministers. He appoints half of the Guardian Council, the head of the judiciary, the head of state television and radio, the supreme commander of both the Revolutionary Guards and regular military, as well as the leadership of the security services.

  • The Office of the Supreme Leader: Four senior clerics, often selected after previous service in the Ministry of Information and Security, the Islamic Republic’s intelligence ministry, support the Supreme Leader. Not only do they arrange his appearances and manage his schedule but, in their capacity as his eyes and ears, they also reach down and involve themselves in almost any government, military, or security office in the state. These permanent advisors preside over several hundred consultants, clerical commissars, and employees that collectively serve as a parallel executive branch.

  • President: The role of the president expanded after Khomeini’s death as constitutional reforms eliminated the parallel premiership. The President can appoint and dismiss cabinet members subject to parliamentary confirmation. He also controls the budgetary process but can be overruled by the Supreme Leader. Additionally, he chairs the Supreme National Security Council which coordinates defense, intelligence, and foreign policy, and appoints the director of the Central Bank.

  • Cabinet: The 22 cabinet ministers preside over a number of portfolios ranging from high profile ministries like foreign affairs, defense and information and security (intelligence) to less prestigious posts like mines and metals, labor and social affairs and cooperatives. While ministers in theory report to the president, the Supreme Leader’s commissars ensure that ministry policies do not run counter to the Supreme Leader’s desires. The intelligence ministry, especially, operates shadow operations that perform functions desired by the Supreme Leader, and do not necessarily require presidential direction.

  • Parliament: While the 290-seat parliament (majlis)is the seat of sovereignty according to the Islamic Republic’s constitution, and its debates can be vibrant, it has little ability to enact decisions. The parliament has, however, stymied ratification of the president’s ministerial nominees. On March 14, 2008, hardliners who, within the Iranian context call themselves “principalists,” won the majority of seats in an election marred by Guardian Council disqualifications of many candidates deemed too reformist or liberal.

  • Guardian Council: The Guardian Council both determines the compatibility of parliamentary laws with Islamic law and also certifies the qualification of any candidate standing for elected office. As such, the Guardian Council enjoys veto power both over laws and personnel. The Supreme Leader appoints six clerics to serve on the 12-member council, while the parliament appoints six laymen. However, because the Guardian Council vets those standing for parliamentary elections, in some years eliminating more than 90 percent of contestants, there is not significant ideological difference between the Supreme Leader’s appointees and those nominated by the parliament.

  • Assembly of Experts: The 86-member Assembly of Experts elects the Supreme Leader when a vacancy develops and, in theory if not in practice, can remove the Supreme Leader should he become unable to fulfill his functions. While the Assembly meets once per year, in practice they do not wield much power. After Khomeini’s death in 1989, a small handful of powerbrokers in the Islamic Republic selected Khamenei to be his successor before the Assembly of Experts formally met. On September 4, 2007, former president Ali Akbar Hashemi Rafsanjani became head of the Assembly.

  • Expediency Council: Khomeini, founder of the Islamic Republic, formed the 31-member Expediency Council in February 1988, both to break stalemates between the parliament and the Guardian Council, and also to advise the Supreme Leader.

  • Office of the Friday Prayer Leaders: Friday Prayer Leaders, appointed by the Supreme Leader, act as his representative in every city and major town. They deliver an official sermon every Friday which often outlines the policies of the Islamic Republic. They also propagate and enforce censorship at the local level.

  • Revolutionary Foundations: The parallel, unelected revolutionary power structures extend even into the economic sector. The Revolutionary Foundations (bonyads) control upwards of 30 percent of Iranian gross domestic product. The Supreme Leader appoints their directors, often from the ranks of the Islamic Revolutionary Guard Corps. The Foundations control their own banks, which are subject to far less oversight and regulation than parallel state banks. These structures together control foreign trade in order to enable the Iranian officials to maintain control over hard currency. The Foundations often allocate funds for terrorist groups, and so enable the Iranian leadership to maintain plausible deniability. 

  

Social Tensions

Social tensions are rife in the Islamic Republic. Half of Iranians are under the age of 24. They struggle for employment and to gather the funds necessary to marry. Much tension revolves around women. Throughout the Middle East, women are fighting for rights they never had; only in Iran do they seek rights which the state has officially taken away from them. Women are a crucial constituency, not only in social terms, but also for the economy. According to Iranian census data, in 1996, Iran had 1.8 million working women compared to 13.1 million home-makers. In 2000, for the first time, Iranian universities admitted more women than men. Precedent suggests that as women’s education improves, more women will want jobs. The difficulties facing women in private sector employment remain unaddressed.  There is no indication that the Iranian government is able to accommodate its young people. According to the World Bank, per capita gross domestic product in 2000 was still 30 percent below what it was in the mid-1970s, compared with a near doubling for the rest of the world.

Nor does it appear that the political elites are willing to undertake the reforms needed to make effective use of the country’s labor potential. There are not sufficient opportunities for the 700,000 young people who enter the job market each year.  Even with the oil boom, unemployment is increasing.  The Iranian government has done little to promote a more favorable environment for private sector development. It would seem that instead of making reforms the political elite is more comfortable with high emigration, especially among the well-educated.

Economic and political frustration feed social problems. The government acknowledges that two million people use narcotics, mainly opium; other estimates place the numbers at twice that, which equates to almost six percent of the total population. Thirty-one percent of Afghan opium ends up in the Iranian market.[1]

Prostitution is also on the rise. A July 2000 report authored by the director of cultural and artistic affairs for Tehran found that prostitution had increased 635 percent between 1998 and 1999. A July 2008 report from the Department of Psychology at the Pedagogical University of Tehran found that even young teens, married, and educated women now engage in prostitution to make ends meet for their families. Officially, there are now 300,000 prostitutes in Iran, although government figures likely understate the problem. For many Iranians, this symbolizes the failure of their leadership.

Such social ills highlight corruption. In February 2001, Iranian authorities arrested a judge in connection with running a prostitution ring involving runaway girls. Abbas Ali Alizadeh, the head of Tehran’s Justice Administration, explained, “This organized team identified girls between 13 to 17 years of age and smuggled them abroad…. Some parents even cooperated with the gang due to the financial benefits.” In December 2001, the conservative daily Jomhuri-ye Eslami reported that authorities had broken up a large prostitution ring in the holy city of Qom. The following month, the government daily Kayhan reported raids on eight brothels in a single Tehran suburb. The issue again hit headlines in April2008, when security services arrested Reza Zerai, police commander of Tehran, in a brothel with several naked prostitutes. While prostitution exists in all societies, the phenomenon in Iran appears directly linked to the decline of the economy.

With intravenous drug use and prostitution rising, Iran is vulnerable to a serious AIDS problem. Indeed, according to the Islamic Republic’s own count, more than 90,000 Iranians have the disease.[2] The drug trade has also led to political instability in southeastern Iran. Such ills provide potential themes in psychological operations, especially as the rhetoric of the religious leadership is contrasted with the facts of life underneath their rule.

In sum, many of Iran’s best and brightest are leaving the country, and a growing number of those remaining are at risk of becoming an underclass. These twin trends undermine the clerics’ claims that they are both promoting social equity and setting the Islamic Republic on the path to greatness.

 

Engines of Dissent

Malaise and the failure of political leaders to enact promised reforms have caused Iranians to grow cynical. University students have been at the forefront of protest. After security forces and an officially-sanctioned vigilante group attacked a group of students protesting the closure of a newspaper in July 1999, widespread rioting broke out and quickly spread across the country. Security forces restored calm after several days. In 2001, a series of riots erupted after a disastrous Iranian performance in the soccer World Cup. The protests evidently started when Los Angeles-based exile television suggested that the Iranian government had ordered the national team to throw a game so that women and men would not party in the street. Another wave of student demonstrations struck in June 2003.   By the end of the Khatami era in 2005, many students no longer differentiated between hardliners and reformers. Instead, they focused on regime versus dissident. Khatami’s annual December appearances before university students grew increasingly contentious. Already in 2001, he was greeted with chants of “In Kabul, in Tehran, Down with the Taliban.” In 2004, his televised presentation bordered on a riot, with most of the audience chanting “Khatami, what happened to your promised freedoms?” and “Students are wise, they detest Khatami.” Khatami’s response, “I really believe in this system and the revolution,” did not win the students’ support.  

Nor has Khatami alone been the focus of student ire. In December 2006, student protestors interrupted a speech by Ahmadinejad. The souring mood was evident in a series of domestic upheavals. Throughout 2007, Iranian authorities arrested student leaders leading to a number of small sympathy protests and vigils. Several of the detained students have died in custody. To head off further trouble, university authorities have sent a parade of student activists to disciplinary committees. Vocal students are expelled and, often, arrested. In a July 2008 sweep, security services detained student leaders ahead of the ninth anniversary of the Tehran University student uprising.

Other factors tear at the fabric of state. With so many cities—each with long histories, often as past capitals of Iran—regional rivalries can be pronounced. While these are often good-natured, government favoritism of one city over another has on occasion led to civil strife. For example, Qazvin experienced several days of rioting in 1994 after the Iranian parliament rejected a bill to make it a separate province in favor of such status for Qom. In 2001, a similar scene repeated in Sabzavar, a town in northern Khorasan.

There is also increasing ethnic dissent within Iran. In 1993, regime radicals destroyed several Sunni mosques. A number of Sunni leaders, both Baluchi and Kurd, have subsequently died under suspicious circumstances. There have been periodic bombings in both Baluchistan and Khuzistan since 2000. In June 2005, for example, a series of bombings struck Zahedan, the provincial capital of Iranian Baluchistan. Such violence has become more frequent in recent months.

Rioting erupted in Iranian Kurdistan in March 2004 after Iraqi authorities ratified an interim constitution which gave Iraqi Kurdistan rights denied to their ethnic compatriots across the border.   Tehran’s haughtiness can exacerbate tensions. In May 2006, ethnic Azeris rioted across Iranian Azerbaijan after an Iranian newspaper characterized Azeris as cockroaches. In October 2007, Iranian security forces arrested a number of demonstrators in Ahvaz; their bodies were found dumped in the Karun River two months later.[3]

Economic inequity has also become an agent of dissent. Because of inefficiency and lack of investment in refineries, the Islamic Republic has had to import 40 percent of its refined petroleum needs through much of this decade. In 2007, the Iranian parliament passed a law mandating rationing of gasoline. After some initial grumbling, dissent diminished. Consumption did as well, but by how much is hard to gauge. While Iranian officials initially said they cut imports of gasoline by half, in May 2008, Oil Minister Gholam-Hossein Nowzari admitted to parliament that the government had illicitly used nearly $2 billion from National Iranian Oil Company coffers to import gasoline. Rather than capping gasoline imports at $3.8 billion, therefore, the Iranian government imported $5.7 billion.[4]

Still, almost every time Iran has faced a gasoline shortage, there has been unrest, most recently in February 2005. During a particularly brutal winter in early 2008, the Iranian government failed to maintain natural gas supplies vital to heating, leading to political uproar and vocal criticism. Tehran pre-empted any chance of violence by deploying the Islamic Revolutionary Guards Corps to several northern cities to impose order.

The Iranian labor movement is increasingly active. Textile workers in Isfahan, teachers in Tehran, bakery workers in Kurdistan, and sugar cane workers in Khuzistan have all walked off their jobs in recent months. The most significant labor movement has been that of the Vahed bus drivers in Tehran. Under the leadership of Mansour Ossanlou, these courageous drivers have struggled to form the Islamic Republic’s first independent trade union. Security services imprisoned Ossanlou and much of Vahed’s leadership, but the trend is spreading. After a prolonged strike over unpaid wages and working conditions, sugar cane workers in Khuzistan have also formed an independent union not under the thumb of official state-sanctioned labor organizations. Regime officials see the danger of an independent labor power base. Police have responded to union activity with increasing brutality and violence. Localized worker clashes with security forces have become monthly if not weekly events over the past year.

 

Interplay of Religion and Politics

The split between Sunnism and Shi‘ism boils down to a dispute as to who should have assumed the mantle of leadership after the Prophet Muhammad. Sunnis argued that leadership should pass to the most devout, while the Shi‘a believe that the leadership of the community should remain within the family of the Prophet; they passed the mantle of the Prophet down from one generation to the next beginning with Muhammad’s cousin and son-in-law Ali. Mainstream Shi‘a followed the line to the twelfth Imam, Muhammad al-Mahdi (b. 868 ad). They believe he did not die, but rather went into occultation. Traditional Shi‘a believe that this “Hidden Imam” or “Lord of the Age” will one day return to usher in just governance and a perfect Islamic society. By extension, therefore, any government before the return of the Hidden Imam is unjust and corrupt. 

Throughout the nearly 1100 years between the disappearance of the Mahdi and the rise of Khomeini, Shi‘i clerics believed that they had a responsibility to ensure that temporal leaders did not violate the basic tenets of Islam, but they absolved themselves of involvement in day-to-day governance. The basic role of the clergy remained counseling believers. The Shi‘a clergy are hierarchical but, unlike Catholicism where the Pope is elected by the College of Cardinals and accepted as the undisputed head of the Catholic Church, Shi‘ism does not require universal recognition of leadership. Local mosques may have mullahs, many with little more than a local education. A mojtahed or ‘alim who has studied religion in a center of learning such as Najaf, Karbala, or Qom may become a hojjat al-Islam (Proof of Islam), ayatollah (sign of God) or, after decades of research and teaching, an ayatollah al-ozma (Grand Ayatollah). There are approximately one dozen Grand Ayatollahs alive today.

Individual Shi‘a have a duty to choose a living marja‘ at-taqlid (source of emulation) to follow. They might study their marja‘s tracts, address questions to him, and make religious donations to himbut, ultimately, their allegiance to any particular ayatollah is voluntary.

Khomeini, in practice, sought to change this. He developed an interpretation of Shi‘i doctrine which challenged the separation between spiritual and temporal authority. He argued that senior clergy could act as a place-holder for the Hidden Imam, a position which would force their direct involvement in governance. This innovation, called the velayat-e faqih (guardianship of the jurisprudent), provided theological justification for the establishment of clerical rule in Iran after the 1979 Revolution.

Most traditional Shi‘a, including many in Iran and most in Iraq, do not agree with Khomeini. The presence of rival sources of religious emulationcontinues to strain the Islamic Republic’s social fabric today. Political power has led to corruption among some clerics in government. The association of corruption with religion upsets many clerics. In July 2002, Ayatollah Jalaluddin Taheri, a respected revolutionary and the designated Friday prayer leader for Isfahan, resigned and blasted the ruling clerics for their corruption and life style. Abbas Palizdar, a member of the Iranian parliament’s Judicial Inquiry and Review Committee, sparked a national scandal in June 2008 after revealing several dozen cases of clerical corruption at a University of Hamadan speech. Such clerical corruption and abuse-of-power have become a political lightning rod and contributed to a growing gap between the clergy and the Iranian public.

Iranian authorities have controlled alternative religious voices on their own territory. They have kept Grand Ayatollah Hossein Ali Montazeri, Khomeini’s former deputy, under house arrest since 1989 and banned publication of his memoirs[5] inside Iran because of his opposition to clerical rule. On October 8, 2006, Iranian security forces arrested Ayatollah Hossein Kazemeyni Boroujerdi after he questioned the doctrine of velayet-e faqih and expressed opposition to clerical rule. Despite such arrests, regime authorities have been unable to convince or to impose their will on most Grand Ayatollahs be they inside, let alone outside, Iran in centers like Najaf and Karbala. They have tried to consolidate leadership, however. In 1994, Grand Ayatollah Ali Araki died in Tehran, reputedly at the age of 105 or 106. Araki had been a traditional cleric, who wielded great influence on theological questions but remained aloof from politics. The Iranian government suggested that Khamenei, who became Iran’s Supreme Leader following Khomeini’s 1989 death, should be the undisputed leader of the Shi‘a world. Tehran’s attempt to impose political authority upon the Shi‘a world fell flat. Khamenei neither had the learning nor charisma to be the chief religious authority for many in his own country, let alone for millions of Shi‘a in Iraq, Bahrain, Azerbaijan, Lebanon, the Eastern Province of Saudi Arabia, and India. More Iranians pay religious taxes to Ayatollah Ali Sistani than they do to Khamenei, despite his political claim to ultimate authority. Iranian sponsorship of Shi‘i militias in Iraq might be seen in the same context, as an attempt to impose through force of arms what is not in the hearts and minds of Iraqi Shi‘a. The rejections of Khamenei’s claims highlight a legitimacy problem which continues to be the Islamic Republic’s Achilles’ heel.

Ahmadinejad inserted a new element into Iranian public religious discourse when, in September 2005, he concluded his United Nations speech with a prayer seeking the hasty return of the Hidden Imam, the Mahdi. Upon his return to Tehran, he spoke of being “placed inside this [divine] aura,” guided by the Hidden Imam’s hand. He has since allocated $20 million dollars to upgrade a shrine at Jamkaran, from which, many theologians believe, the Hidden Imam will emerge. Within Iran, such messianic rhetoric and reference to folk religion may help Ahmadinejad bypass the injunctions of more established clergy. Should the clergy seek to counter his efforts, Ahmadinejad can argue to his followers that some clerical leaders seek to hamper the return of the Hidden Imam. More dangerous from an international perspective is the possibility that Ahmadinejad may be sincere in his belief that violence can speed the return of the Hidden Imam, for this would throw into question the efficacy of both diplomacy and deterrence. While the President is not the ultimate power in the Islamic Republic, he serves with the implicit endorsement of the Supreme Leader.

 

Economy

Despite the shortfall in energy production, experts believe Iran’s economy to be relatively stable, with gross domestic product growth in each of the past two years in the range of 5-6 percent. That stability, however, is primarily the result of high oil prices and expansionary fiscal policy, and it masks underlying weaknesses that will become apparent if oil prices fall. Unemployment, for example, is high; official figures put the rate of unemployment at roughly 10-15 percent, but some outside estimates suggest this figure may be higher, particularly among younger working-age groups. According to the International Monetary Fund, inflation, which currently stands at about 15 percent by official estimates, is the country’s most pressing problem and is partly the result of a lack of monetary independence. Inflation has become a major domestic political issue. While some Iranian officials deny inflation is in the double digits, many parliamentarians acknowledge the figure to be higher, and foreign embassies estimate it to be around 25 percent. Recent Iranian newspaper reports acknowledge that the prices of basic foodstuffs have increased more than 50 percent, and housing costs have increased 150 percent since 2007.

Some of the blame for the current high levels of inflation rests with Ahmadinejad’s expansionary fiscal policy. Upon his election to office in 2005, Ahmadinejad made bold pledges to expand social welfare and justice for the poor, but as inflation and unemployment remain high, he has failed to keep his promises. In June of 2006, sixty Iranian economists wrote a letter to Ahmadinejad, criticizing his “populist” program as bad for the long-term prospects of the Iranian economy.

Some of Iran’s economic difficulties have been caused by the ideology of the Islamic revolution of 1979, which propounded self-sufficiency and an end to Iran’s dependence on, and perceived manipulation by, great powers. The Islamic Republic does manufacture automobiles under license from such European companies as Peugeot, Renault, and Mercedes, but Iran’s economy is not heavily industrialized.

For many Iranians, everyday concerns are prosaic. Iran is oil-rich, but also energy-dependent. It is the fourth-largest exporter of crude oil, and has the world’s third largest proven oil reserves, estimated at 136 billion barrels, or 10 percent of known world reserves. The Islamic Republic exports approximately 2.5 million barrels of oil per day, about five percent of global crude oil production. In 2007, this accounted for $69 billion, approximately 80 percent of Iran’s export revenues and, almost two-thirds of all state revenue. The continuing rise of oil prices on the world market only makes such exports more lucrative. Because Iran’s 2007 state budget was based upon an expected price of $60 per barrel, it has accumulated foreign currency reserves of perhaps $64 billion at the end of the 2007 fiscal year.[6] The Islamic Republic also has the world’s second largest natural gas reserves, although these remain largely undeveloped.

Iran’s leaders are able to steer the proceeds of this oil money influx to provide patronage and build constituencies, particularly among the lower class. During Ahmadinejad’s 2005 campaign for the presidency, for example, he promised to bring “oil [money] to the table of every Iranian.” After his election, he sought popular support with direct disbursement of cash during his frequent provincial trips. Because Iran’s political leaders benefit from the structure of the economy as it is, there is little chance of major, structural economic reform.

Should oil prices again decline, Tehran may face serious fiscal difficulty. When oil was $60/barrel, the Iranian government had to borrow roughly $20 billion per year. Rising oil prices have masked declining production. In 1974, Iran was producing six million barrels per day of crude, but it has been unable to match those levels since the 1979 revolution. In the late 1990s, oil production surpassed 4 million barrels per day, although oil production has since dropped slightly. On July 8, 2008, a National Iranian Oil Company executive acknowledged that, without significant investment in Iranian infrastructure, production would each year decline 300,000 barrels per day,[7] although this figure may be higher: reservoir damage and decreases in existing deposits claim an estimated 400 – 500 thousand barrels per day.   Iranian oil production has declined at a rate of 10 – 12 percent annually,[8] both because of the natural decline, lack of upkeep of existing oil fields, and insufficient investment in development of new projects. The natural annual decline rate for existing Iranian oil fields is perhaps eight percent onshore and ten percent offshore. Current Iranian recovery rates are 24–27 percent, less than the world average of 35 percent.[9] This may be tied to shortages of natural gas for use in enhanced oil recovery efforts such as re-injection. Re-injection could boost daily oil production by 220,000 barrels per day.[10] All major upstream projects have the potential to increase production by a further 1.26 million barrels per day, far short of the Iranian government’s stated target of total production of 5.8 million barrels per day by 2015, a figure which would require an estimated $25 – 35 billion of foreign investment.

 

Table 1: Ongoing Iranian Oil and Gas Field Expansion Projects

City    
Company    
Probability    
Year    
Quarter    
Capacity (thousands b/d)
Type    
Shiraz
National Iranian Oil Co.
Probable Expansion
2008
4
8
Fluid Catalytic Cracking
Arak
National Iranian Oil Co.
Probable Expansion
2009
4
75
Crude Distillation Unit
Tabriz
National Iranian Oil Co.
Probable Expansion
2010
4
5
Vacuum Distillation
Tabriz
National Iranian Oil Co.
Probable Expansion
2011
1
9
Visbreaking
Abadan
National Iranian Oil Co.
Probable Expansion
2009
1
23
Fluid Cat Cracking
Arak
National Iranian Oil Co.
Probable Expansion
2009
4
21
Fluid Cat Cracking
Tabriz
National Iranian Oil Co.
Probable Expansion
2011
1
9
Dist Hydrocracking
Bandar Abbas
National Iranian Oil Co.
Probable Expansion
2009
4
13
Dist Hydrocracking
Bandar Abbas
National Iranian Oil Co.
Probable Expansion
2011
2
60
Condensate Splitter
Bandar Abbas
National Iranian Oil Co.
Probable Expansion
2009
4
120
Condensate Splitter
Tabriz
National Iranian Oil Co.
Probable Expansion
2011
1
25
Crude Distillation Unit
Isfahan
National Iranian Oil Co.
Probable Expansion
2010
3
41
Crude Distillation Unit
Kermanshah
National Iranian Oil Co.
Probable Expansion
2009
2
18
Crude Distillation Unit
Shiraz
National Iranian Oil Co.
Probable Expansion
2009
2
20
Crude Distillation Unit
Lavan
National Iranian Oil Co.
Probable Expansion
2009
3
20
Crude Distillation Unit
Bandar Abbas
National Iranian Oil Co.
Less Likely
2007
4
0
Vac Distillation
Kermanshah
National Iranian Oil Co.
Probable Expansion
2010
4
0
Condensate Splitter
Abadan
National Iranian Oil Co.
Less Likely
2011
4
0
Crude Distillation Unit
Bandar Abbas
National Iranian Oil Co.
Less Likely
2010
1
0
Crude Distillation Unit
Bandar Abbas
National Iranian Oil Co.
Less Likely
2010
4
0
Crude Distillation Unit
Salman, Foroozan, Daroud
Total, Petro Iran
Less Likely
2007
4
0
Crude Distillation Unit
Bandar Abbas
National Iranian Oil Co.
Probable Expansion
2009
4
88
Crude Distillation Unit
Bandar Abbas
National Iranian Oil Co.
Probable Expansion
2009
4
40
Vac Distillation
Isfahan
National Iranian Oil Co.
Probable Expansion
2010
3
50
Resid Cat Cracking
Isfahan
National Iranian Oil Co.
Probable Expansion
2010
3
43
Vac Distillation
Hormuz
National Iranian Oil Co.
Less Likely
2013
4
0
Crude Distillation Unit
Hormuz
National Iranian Oil Co.
Less Likely
2013
4
0
Vac Distillation
Hormuz
National Iranian Oil Co.
Less Likely
2013
4
0
Fluid Cat Cracking
Hormuz
National Iranian Oil Co.
Less Likely
2013
4
0
Resid Hydrocracking

Source: Lehman Brothers

 

Despite recent agreement with Russia’s Gazprom and Italy’s Edison International, the Iranian government is unlikely to attract sufficient foreign investment to develop its energy sector. The Iranian constitution prohibits foreign ownership of oil fields, which precludes the standard practices of offering capital, technology, and management in exchange for some share of the resource to be extracted. Instead, Tehran relies on a unique buyback system under which foreign investment is considered a sovereign debt that Iran “buys back” at a 15–17 percent rate of return, a procedure and rate which foreign companies find unattractive.

In addition, many investors find it difficult to work with Iranian officials. The Iranian negotiation bureaucracy remains convoluted, and the government’s adherence to deals can be inexact at best. Such an investment climate limits foreign investment, as even Chinese and Russian companies are unwilling to execute deals for strictly political reasons.

Tehran will face similar difficulties in developing its estimated 974 trillion cubic feet in proven natural gas reserves. In 2005, Iran sold 65 percent of its production on the market, used 18 percent for enhanced oil recovery re-injection, and lost 17 percent due to flaring and the reduction of wet natural gas from hydrocarbon extraction.

 


[1] Fars News Agency (Tehran), December 24, 2007.

[2] Abrar (Tehran), April 9, 2008. http://abrarnews.com/politic/1387/870120/html/ejtemaii.htm#s250656

[3] Iran Emrooz (Tehran), Dec. 24, 2007.

[4] Alef (Tehran), May 12, 2008.

[5] Husayn Ali Montazeri. Matn-i kamil-i khatirat-i Ayatallah Husayn ‘Ali Muntaziri. (Spånga, Sweden: Baran, 2001).

[6] Economist Intelligence Unit (EIU). Iran Country Profile 2007. p. 63. 

[8] Energy Information Administration (EIA). Iran Country Analysis Brief. October 2007, pp. 2-3.

[9] EIA, 2007, p. 4 and Roger Stern “The Iranian Petroluem Crisis and United States National Security.” Proceedings of the National Academy of Sciences. 104.1 (2007), p. 380

[10] Stern, 2007, p. 380