Saturday, June 1, 1996


Summer 1996

By Robin Wright

Almost a generation after its Islamic revolution reshaped Middle Eastern politics, Iran has reached a critical juncture. At stake is its survival as the world's only modern theocracy. The odds are now almost decisively against Tehran--though not because of U.S. policy. Indeed, the latest congressional schemes and White House sanctions have once again provided rallying points around which to mobilize nationalist passions in a fiercely proud and millennia-old society.

Many of Iran's problems since the 1979 revolution have indeed centered on tensions with the outside world: Western economic sanctions after the 1979 American embassy seizure; Iraq's 1980 invasion and the subsequent eight-year war; widespread disdain by Arab world leaders of their militant Persian brethren; and isolation from the United States, the world's most important political power and, for an oil-producer, economic market. Many of these problems endure. Its rich natural resources and petrodollars continue to give Tehran access to most comers of the globe, but, because of Iran's record of extremist tactics and goals, it cannot count on a single country as a genuine ally.

But the real challenge facing the Islamic Republic in the mid-1990s is instead internal. The revolution is imploding.

The process is gradual, unlike the dramatic upheaval that forced Shah Mohammed Reza Pahlavi from the Peacock Throne and ended a monarchical system dating back 2,500 years. The climax is not yet in sight, and it will not necessarily mean total collapse of the system. Nevertheless, the problems are now so fundamental and pervasive that the Islamic regime can no longer hope to survive over the long term under the economic and political system established after the 1979 revolution. Like the Soviet Union, Iran literally can no longer afford its ideology. It has reached a juncture where it must change, one way or another.


The signs of decay are multifaceted. In an era when power is increasingly based on financial strength rather than military might, the most fundamental problems Iran faces are economic.

The first challenge centers on oil, specifically plunging prices and rising operational costs.
The pivotal fact is that petrodollar income is down to almost one-third of what it was just before the revolution. Iran's oil industry, which has not been modernized in almost two decades, also badly needs an overhaul. If nothing is done over the next five years, Tehran faces the prospect of declining production. The worst-case scenario is that Iran, which is currently the second-largest producer among the Organization of Petroleum Exporting Countries (OPEC), could actually become a net oil-importer within the next quarter-century if it does not update its equipment soon. Though unlikely, this prediction by Western diplomats and oil analysts underscores the potential long-term vulnerability of Iran's leading source of income.

The oil crisis reflects the broader wear and tear on Iran's infrastructure. For the revolution's first 18 months, the regime used its oil wealth to bring some measure of modernity to the poor and to parts of the country unchanged for centuries. The "Construction Jihad" introduced electricity, running water, and schools to hundreds of thousands of Iranians. But the effort slowed abruptly when Iraq invaded. The Islamic Republic diverted billions into the 1980-88 Iran-Iraq war and into postwar rearming, as the military had lost nearly 40 per cent of the national arsenal to the war. Neighboring Iraq's military remains larger and better armed, even after the devastating punishment of Operation Desert Storm, and Baghdad has repeatedly balked at accepting a formal peace with Tehran, so the ruling theocrats still feel vulnerable. As oil wealth has gone toward defense over the past 17 years, industry and development have stagnated. Up to two-thirds of Iran's factories run at limited capacity due to the chronic shortage of raw materials and the need for spare parts and new equipment--or a total overhaul.

The downward spiral in oil prices since the mid-1980s has in turn led to repeated budget shortfalls--up to 20 per cent in the Islamic year ending in March 1994. Iran also faces a burgeoning debt since it went on an uncontrolled postwar shopping binge for billions of dollars worth of foreign consumer goods to placate a war-weary society. This strategy was costly. One of the revolution's proudest accomplishments, as the mullahs often boasted, was paying back the shah's $8.4 billion debt and freeing Iran from Western creditors. In 1990, Iran still owed virtually nothing, but estimates of Tehran's external debt in 1996 run as high as a record $33 billion. At least one-quarter of oil revenues this year will go into servicing the foreign debt.

A second problem centers on population and poverty. According to statistics in Iran, Iran's population has almost doubled in 17 years, from 34 million to 64.7 million. During the same period, oil income has fallen by almost two-thirds. The population growth rate is further sapping the resources of an already fragile infrastructure. The number of primary school students has nearly tripled, from 7 million to more than 19 million since the revolution, forcing schools to run double and triple shifts. Despite vast agricultural lands, Iran has increasingly had to import basic foodstuffs. Most costly are the direct and indirect subsidies for food and fuel that absorb more than $6 billion annually--or almost half of Iran's oil revenues.

The average Iranian has been particularly hard hit since Tehran floated its artificially overvalued currency after the war. The American dollar, stuck officially for a decade at around 70 rials, rose to more than 3,000 rials in the mid-1990s. As a result, the cost of most items soared, while incomes are less than half what they were before the revolution. And annual inflation on basic items now ranges from 40 to 200 per cent.

The economic system is generally stretched thin. Unemployment has climbed to 30 per cent or more; economists and diplomats in Tehran estimate that, of those who have work, underemployment has reached 75 per cent. In the early 1990s, rising business costs and declining revenues led professionals, from lawyers to architects, to close up shop and work at home. Many others were forced to take on second jobs. A 1993 Iran Air crash that killed 132 people elicited letters to Tehran newspapers blaming a troubled economy that forced air controllers to moonlight as cab drivers to make ends meet. By 1995, many Iranians felt compelled to take on third jobs. Iran's Chamber of Commerce admits that up to 40 per cent of Iranians live below the poverty line or barely above it; diplomats peg the figure closer to 60 per cent.

Tehran, teeming with more than 12 million residents by some estimates, is representative of the crisis. It has become one of the world's megacities--overpopulated, polluted, and, because of war refugees and rural migrants, increasingly poor. Despite the stiff Islamic penal code, crime has soared; even foreign diplomats have been victimized at their guarded residences.

A third problem is corruption and mismanagement of resources, which are difficult to estimate but widely considered to be rampant. Both have impeded efforts to liberalize and privatize the economy. Iranians at all levels complain that payoff demands are far larger and made by a wider array of personnel in both the public and private sectors than they were during the monarchy. A related problem is the network of foundations that actually hold the largest single share of Iran's wealth. Key foundations, which provide everything from food to college scholarships and which control large businesses and industries, have in effect become private fiefdoms often beyond government control.

The bottom line is that the vast majority of Iranians are much worse off after 17 years of theocratic rule than they were during the shah's era. Many of the regime's most ardent supporters believe the Islamic leadership has left them behind. Three groups vital to the regime's survival--the young, the middle class, and the mostazafin, the oppressed in whose name the revolution was undertaken--have soured on the revolution. Unemployment among those aged 15 to 24, for example, is double the national average--staggering in light of the fact that 70 per cent of Iran's population is under 25 and half is under 15. The mullahs may regret their decision to lower the voting age to 15.

Another increasingly alienated pillar of Iranian society is the bazaar, a term loosely applied to the traditional merchant class. The bazaar's decision to go on strike was a turning point in the shah's ouster. Relations between the bazaaris and the current regime are also rocky--for many of the same reasons: The mullahs may be profiting, but many bazaaris clearly are not. Bazaaris are traditionally religious, but the costs of the revolution have cut deeply into or impeded their profit margins. New restrictions in 1995 limiting access to foreign exchange to import raw materials and requiring that foreign profits from exports be remitted to Iran have heightened tensions.

Public disillusionment is visible in several ways. Since 1992, sporadic riots have erupted in major cities such as Tehran, Mashhad, Shiraz, Qazvin, and Arak. Thousands have been involved in pockets of unrest over prices and housing shortages--flash points still not defused. Violence, however, remains unusual.

More telling over the past two years has been the daring and stinging criticism from a cross section of highly placed or respected public figures in fields ranging from the arts to the military. Azizollah Amir Rahimi, a former general who firmly backed Ayatollah Ruhollah Khomeini and headed the military police after the revolution, for example, charged in a privately circulated letter (which later made its way back into Iran via foreign radio broadcasts) that the clerics are responsible for the misery in Iran. "The nation is in poverty and the country is on the verge of explosion," he wrote in 1994. At the same time, a group of 134 writers and publishers issued an open letter calling for an end to intimidation and censorship. In June 1995, 214 actors and directors petitioned the regime to end "straitjacket regulations and complicated methods of supervision" over everything from plots to production.

In this climate of criticism, new ideas have emerged to further challenge the regime. Abdol Karim Soroush, Iran's leading philosopher and one of the revolution's early supporters, has become the focal point of a new movement trying to reconcile Islam and democracy. In a series of magazine essays and books since 1991, Soroush has argued that Islam should not be used as a modem ideology, for it is too likely to become totalitarian. The alternative is an Islamic democracy not imposed from the top but chosen by the majority of the people, both believers and nonbelievers. He has also argued that the rights of the clergy should be no greater than the privileges of anyone else and that the mullahs have no a priori right to role. He argues further that secularism is not the enemy or rival of religion, but its complement. Soroush has such a large following that leading Iranian officials now openly attack his ideas in public speeches. At last year's annual commemoration of the American embassy seizure, Ayatollah Ali Khamenei, Iran's supreme jurisprudent and successor to Khomeini, devoted as much time condemning Soroush's writing as he did the United States and Israel.

The anger, dissent, and new ideas are not, however, limited to elites or intellectuals. Tehran taxi drivers often refuse rides to the clergy, and some even run fingers across their throats to show contempt. Jokes about the mullahs are rampant and irreverent. In 1994, the master of ceremonies at a Tehran wedding did a lengthy routine ridiculing the clergy--in the presence of several clerics.


The regime is not unaware of the mounting backlash. President Ali Akbar Hashemi Rafsanjani in particular has attempted to deal with economic problems and societal malaise. Indeed, his leadership has differed significantly from the Khomeini decade. The period between the imam's triumphant return in 1979 and his sudden death in 1989 represented deconstruction--of the monarchy, of the "Westoxic" influences that flavored everything from education and business priorities to fashion, of the regional balance of power, and of long-standing diplomatic and economic alliances.

The Rafsanjani era, by contrast, has been marked by a rush to reconstruct everything from the physical and psychological damage of the war with Iraq to the tattered economy. When he was elected president a month after Khomeini's death in mid-1989, Rafsanjani wanted not only to move on; in key areas, he actually tried to reverse course. He recognized that the original passions fueling the revolution died long before the imam's passing.

In his first term, Rafsanjani's boldest moves were economic. As the former communist regimes of Eastern Europe and the ex-dictatorships of Latin America and Africa moved to liberalize their markets, Iran also launched major reforms. Rafsanjani, son of a pistachio farmer and entrepreneur, is a free market mullah who pushed private ownership of business and subsidy cutbacks.

Under his direction, several companies that were nationalized after the revolution were again privatized. The stock market launched by the shah was revived; several clerics even became investors. Foreign investment laws were gradually amended until they actually became more favorable to foreigners than they were during the monarchy. In top economic jobs, Rafsanjani replaced clergy or their followers with Western-educated technocrats. Tehran even began obtaining credits and borrowing millions again from the West, including countries it once condemned, and from the World Bank.

The dramatic shift was best reflected in policy on population growth. In the early 1980s, the mullahs had called on Iranian women to breed an Islamic generation--and they complied. In the early 1990s, the government launched a massive campaign that mobilized thousands of women to go door-to-door to promote birth control. Clinics offered for free everything from tubal ligations and vasectomies to the pill, condoms, and Norplant. Food and other subsidies were cut after the third child. A leading mullah even issued a fatwa, or religious decree, calling for limiting the number of children per family. Iran brought the fertility rate down from an average of seven births per woman in 1986 to 3.6 births in 1993--almost half the rate before the revolution. Iran's progress in family planning was even recognized by the U.S.-based organization Population Action International.

At the onset of Rafsanjani's first four-year presidential term, the tenor inside the country relaxed significantly. The music of Beethoven and Mozart returned to Tehran concert halls and the plays of Anton Chekov and Arthur Miller to its theaters. Chess, banned as a form of gambling, became permissible, as did pale shades of nail polish and more fashionable Islamic dress. Iran's movie industry turned from themes of war and revolution to those of love and adventure. Magazines and newspapers, including publications critical of the government, proliferated. Many of the excesses synonymous with the revolution's early years were checked. Even the activities of the neighborhood komitehs were reined in when they were merged with the police force. The komitehs had monitored moral conduct through means ranging from observing public places and rifling through garbage in search of outlawed liquor bottles to checking cars for unmarried couples at impromptu roadblocks.

Rafsanjani also tried to relax tensions with the outside world. In fits and starts, he began patching up relations with the Gulf Arabs, notably Saudi Arabia, who had sided with Iraq during the 1980-88 war. After Baghdad's 1990 invasion of Kuwait, Rafsanjani's government had a de facto understanding with the U.S.-led coalition that Iran would not meddle with Operation Desert Storm, and Tehran seized more than 100 Iraqi military and civilian aircraft dispatched to safer turf in Iran. Afterward, Rafsanjani intervened personally to help achieve the release of the last American and European hostages held by pro-Iranian militias in Lebanon.

By the early 1990s, the revolution appeared to be settling down. Rafsanjani was representative of the clerics who, never before having run a country during the 13 centuries of Islam, learned during the difficult Khomeini decade about the exigencies of a state. After the hostage release--a response to President George Bush's pledge that "good will begets good will"--many in Tehran, including officials, even thought rapprochement with the "Great Satan" was around the corner. They thought that renewing ties with the United States--even if by piecemeal--would be a psychological boon to the economy and public morale.

But some of Rafsanjani's steps in the direction of liberalization contributed to his undoing. In an attempt to rein in hardliners and develop new domestic and foreign policy options, he orchestrated what amounted to a purge. He manipulated the 1992 parliamentary elections so that the best-known extremists--including the mentor to the students who had seized the American embassy and a former ambassador to Syria tied to the bombings of U.S. diplomatic and military facilities in Lebanon--were either eliminated from candidates' lists or faced serious disadvantages in running for office. A new vetting system found many candidates, including incumbents, unqualified to run for office. The most militant revolutionaries were swept from power.

But Rafsanjani's attempts to marginalize the radicals only produced another challenge. In their place came a new group of social conservatives who reined in the president's reform efforts. Iran's version of shock therapy was put on hold, and many subsidies were restored. The new parliament, or Majlis, led by Speaker Ali Akbar Nateq-Nouri, changed direction.

Once the heart of the revolution, especially when Rafsanjani was its speaker in the 1980s, Iran's Majlis passed no major or defining legislation between 1992 and 1996. It was diverted instead by secondary issues such as the impact of satellite dishes and videos on social mores. In 1995, despite Rafsanjani's opposition, the Majlis outlawed satellite dishes that had brought everything from CNN to "The Oprah Winfrey Show" into Iran. In 1993, the Majlis agreed to allow the import and distribution of "Islamically correct" videos, but the statute also made distributors of pornographic videos liable for the death penalty after repeated convictions.


The various splits reflect the growing fragmentation within the Islamic government. Despite outside skepticism about moderates or militants, a full spectrum of beliefs has emerged in Iranian politics over the past decade. It has also led to serious stalemates. Ironically, over the past three years, Rafsanjani, Iran's shrewdest politician, has faced challenges similar to those faced by President Bill Clinton: His reformist agenda and themes of change have been obstructed by a conservative and feisty parliament that has forced him to fight for his political life. As a result, his second term has seen little movement, and the Rafsanjani presidency generally has not ushered in the anticipated era of normalcy or progress in the regime's relations with its own constituents or with the outside world.

The voices of the revolution are also changing as Rafsanjani has increasingly been drowned out by others who have their own agendas. Three are particularly prominent. Ayatollah Khamenei is a former president (before an executive presidency was introduced in 1989) whose status was quickly elevated in 1989 so he could succeed the Ayatollah Khomeini. He has been struggling ever since to prove his widely questioned credentials as both Iran's "supreme guide" and a leader of the Shiite world. Although he is a less-adept politician who traditionally took a backseat to Rafsanjani, Khamenei has in recent years staked out bold and hard-line positions to establish his own identity and power base. Parliamentary speaker Nateq-Nouri is an ambitious, xenophobic conservative who still uses the revolution's early rhetoric. He is already campaigning hard to succeed Rafsanjani when the president's second and final term expires next year. Ayatollah Ahmad Jannati is a senior and outspoken member of the Council of Guardians whose angry militancy seems determined to keep the clergy in control of government and to prevent any compromising of the revolution.

The tension among various government branches and personnel reflects the broader political challenge to the Islamic Republic. For all its shortcomings, Iran's revolution did begin with a democratic veneer--with the emphasis on veneer. Disparate elements from the Islamic Right to the socialist Left and many groups in between banded together to end more than two millennia of dynastic rule; in no small part, they wanted a greater say in controlling their lives. Even after the revolution was commandeered by Khomeini's followers, the new constitution was republican. All major religious groups--including Jews, assorted Christian sects, and Zoroastrians--are represented proportionately in parliament. The one exception has been the Baha'i faith, which is excluded and whose members are often persecuted because they are viewed as heretics and because many were employed by the monarchy (due to their high levels of education). As hard as it may be to believe, history one day may look back on Iran's revolution as a harbinger of the struggle to reconcile democracy and Islam in the Middle East.

Over the past 17 years, however, Tehran's Islamic system has been manipulated and corrupted so that it deviates dangerously from its original form--and from any semblance of democracy. For the first round of parliamentary elections in March 1996, for example, 44 per cent of the 5,121 candidates who registered to run were disqualified by a religious council. Officials claim that only those linked to outlawed opposition groups or who are illiterate or drug addicts were barred, but in reality the system is driven by politics.

Iran's constitution provides for political parties, but the government effectively excludes them. This year, election officials barred most of the 15 members of a coalition made up of the Freedom Movement, a group of liberal Islamists headed by a former foreign minister who quit after the American embassy was seized, nationalists from the National Front, and independents. Rejection letters never specified why they were barred. Security forces broke up a press conference the coalition had organized to announce its withdrawal. "Parliamentary elections could represent a real contest for power in Iran's political system--but only if arbitrary bans on candidates and other constraints on political life are lifted," Human Rights Watch/Middle East reported after an unprecedented tour of Iran in early 1996.

Other constitutional guarantees have been flagrantly ignored, violated, or rewritten. The right of free expression was undermined by a subsequent law requiring the press "to enjoin the good and forbid the evil." Repressive conduct through subtle harassment or overt action has also returned. At least seven publications have been ordered to close down since January 1995; others stopped publication after government subsidies for paper were revoked. Several journalists have been charged with or imprisoned for actions that boil down to offending Islam.

In recent years, vigilantes linked to political or religious factions have attacked individuals or groups who dare to question the regime. Twice last year, Soroush was beaten up in university lecture halls by hizbollahi (or pro-regime) vigilantes, forcing him to flee. Many of the 134 writers who asked for an end to censorship received death threats. In 1994, noted writer Ali Akbar Saidi Sirjani died mysteriously in detention, where he had been placed after writing satirical and questioning essays about the regime; his widow is reportedly destitute, because the government froze their bank accounts. Rahimi was detained after his letter was broadcast on the BBC and Voice of America, although the pretext for his detention was alleged opium addiction. The government of God has effectively declared its monopoly on the truth. And the tentative openings of the late 1980s and carry 1990s have ended.

The growing repression and brutality mixed with the pervasive sense of lost mission have cost the regime much of its legitimacy. Hardships and clampdowns during the revolution's first decade had the cover of a hard-fought war; now there are no credible excuses. Some Iranians who once staunchly opposed the monarchy now talk longingly of the days of the shah--though not of the Pahlavi dynasty. They instead want a return to a multifaceted society and a respected state; proud Iranians hate being considered pariahs and terrorists by the outside world.

Such sentiments extend beyond the lay public. The Islamic Republic never had the support of many mullahs; as the failure of the system threatens to taint Islam, discontent and dissidence among mullahs appear to be growing. The most dynamic--and controversial--debate in Tehran today centers on whether or not the clerics should basically go back to the seminaries and their original roles as interpreters of God's word. The other side of the coin is whether the running of the state should be turned over to the technocrats. Although there are no opinion surveys, several indicators--from debates among young clerics and in seminaries to discussions among members of parliament--suggest that large numbers of clerics think it is time to get out of government.


In some ways, Iran's Islamic revolution was virtually destined for a big fall from the outset. The regime's use of religion as a political idiom elevated expectations to utopian heights that no state, much less a developing nation, even if it does have oil, could ever hope to achieve. Besides its inherent vulnerability, the revolution's various constituencies had independent visions of Iran after the shah. Iranian unity has been an illusion ever since just one of those visions strong-armed its way to the top. And since then, the inner circle of mullahs who once rallied together around Khomeini has deeply divided; clerical politicians turn out to be no different from their secular counterparts. Any semblance of solidarity is largely a byproduct of challenges from regional and international parties that allowed the theocrats to lay blame elsewhere or to appeal to national pride. The latest such challenge is House speaker Newt Gingrich's call for a $20 million U.S. intelligence program to overthrow the regime--an idea doomed from the outset anyway. Virtually no overt or covert action short of a full-scale military invasion has any chance of succeeding. Even Iranians who dislike this regime do not want foreigners influencing or dictating their future. So the odds are against the success of any military actions.

For several reasons, there are no easy options in dealing with Iran. First, the international community has been just as fragmented as Tehran's leadership. A case in point was the Clinton administration's decision in 1995 to impose new sanctions eliminating the last vestiges of U.S. trade with or investment in Iran--at a cost of millions in income and thousands of American jobs. The threat of even stiffer congressional action--because Iran is usually an easy political target on the Hill--had forced the administration's hand, but the move generally fit in with U.S. strategy to "contain" Iran and neighboring Iraq. The American action pushed U.S. allies to make a choice: work with Washington to squeeze Tehran to stop its nuclear programs and end its alleged terrorism or continue to trade with Iran. Not a single government was willing to cut economic links with Iran to side with the United States. Each opted to follow a carrot-and-stick approach that amounts to constructive engagement.

Second, rapprochement between the United States and Iran is not an option anytime soon. Both have repeatedly and stubbornly resisted opportunities to repair relations. As a Western ambassador in Tehran noted recently, Americans play football while Iranians play chess, a difference that also plays out diplomatically. For the time being, the two states are destined to be locked into conflict, because they have different visions of how to conduct the business of state and more fundamentally how to enact priorities. The United States holds Iran accountable for aiding and abetting Hamas and Islamic Ji-had in the occupied territories as well as having ties with Damascus-based rejectionist groups, plus assorted attacks on Iranian dissidents abroad. Tehran has also been the most outspoken critic of the U.S.-brokered Mideast peace process. Iran, in turn, holds the United States responsible for offering refuge to its main rivals, including the shah's son and the Mujahadeen-e Khalq, or People's Holy Warriors, who are held responsible for assassinating a former president, prime minister, several members of the Majlis, and many civilians during the early 1980s. The CIA has reportedly funded broadcasts by the shah's son into Iran, and the Mujahadeen runs a large lobbying effort out of its Washington office.

Third, and despite all its problems, the regime still faces no external opposition force capable of ousting it. The Mujahadeen-e Khalq, which has an agenda best described as Islamic socialism, lacks domestic support even among the regime's toughest opponents, in no small part because it is based in rival Iraq. The group now amounts to little more than an irregular irritant. A return to the monarchy also has no significant support. To succeed and have legitimacy, change must come from within--either by the regime's actions or by inaction that offers opportunities to others. But aiding or intervening on behalf of the new internal forces could well undermine or taint these forces rather than encouraging evolutionary change.

An activist American foreign policy--bailing out Haiti and Bosnia, trying to bring peace to the Middle East and Northern Ireland--can be both effective and healthy. But with a host of economic and political sanctions already in place in Iran, it may be time for Washington to step back. For one thing, the American record of intervention in Iran to prop up or bring down leaders, in 1953 and 1979, respectively, ought to offer a potent lesson: The United States has little hope of determining who rules Iran. Trying to dictate the course of history too often backfires--there and elsewhere. With a boost from freely flowing information, which has penetrated Iran even more pervasively than it did communist Eastern Europe or Latin America's military dictatorships, the better way to undermine those responsible for repression at home and extremism abroad may be to let them do it to themselves. They are already well on their way.

ROBIN WRIGHT, a former Middle East correspondent for the Sunday Times of London, is the author of Sacred Rage: The Wrath of Militant Islam (Simon and Schuster, 1985) and In the Name of God: The Khomeini Decade (Simon and Schuster, 1989). She covers global issues for the Los Angeles Times and travels frequently to Iran.