Ever since the end of the Iran-Iraq war (1980-88) Tehran-Washington ties, which froze following the 1979 revolution, have repeatedly failed to resume mainly due to domestic political factors. A decade after the revolution, the emergence of the centrist and pragmatist government of Akbar Hashemi Rafsanjani in 1989 gave rise to hopes that Iran-US relations would at least improve, if not go back to normal.
Ever since, hardliners and interest
groups in both capitals have played a major role in preventing this
This article argues that for the
first time since the Iran-Iraq war, the majority of forces in the Islamic
Republic see the necessity to terminate the
Among the latter group, however, is
a strong faction whose opposition to the
2.1. The genuine cause:
Against what may have appeared in
the past years, the anti-American sentiments in
• Iranians historically tend to believe in conspiracy theories and are thus skeptical towards foreign powers,
• The Cruiser USS Vincennes shot down the Iran Air 655 on 3 July 1988 in the Persian Gulf,
• The Clinton Administration apologized for its 1953 coup against the popular government of nationalist Prime Minister Mohammad Mosadegh,
• The US has changed regimes in the region in the recent years and threatens to change the regime in Tehran, if it did not comply with the international community and
• The US is asking Iran to give up its legitimate nuclear rights as a member of the NPT.
Also given that the majority of the forces that contributed to the 1979 revolution had leftist tendencies shows how intellectualism in
Although times have changed and the modern Iranian intellectuals and the moderate Iranian Islamists are more inclined towards liberalism, democracy and Western modernity many political activists in Iran have remained untouched by the globalization trends of the past two and half decades during which the majority of Iranians have remained more or less isolated.
Nevertheless, although there seems
to be a general anti-US trend among many Iranians, the different political
mindsets deal differently with the US-factor in Iranian politics. While the
reform camp sees a chance of improving
The reformists who were approved by the majority of Iranian voters in free elections of the past eight years seem less worried about freedoms of speech and vote than the conservatives who win elections only by massive disqualification processes. This moderate attitude among the reformists has aggregated the anti-Americanism among certain conservatives.
So, while the genuine
2.2. The factional cause:
Apart from the genuine concern of
these conservatives, some of them use the anti-American slogans in order to
prevent a major victory for the reformists. Correct or not, the reformists have
managed to disassociate themselves from the causes of the
This has encouraged the more
moderates among the conservatives to start embarking on a more open foreign
policy in their presidential campaign. The Chinese Model is the term attributed
to this agenda:
The problem of this conservative
faction is not necessarily rapprochement with the
Many moderate conservatives argue
with the hardliners of their camp that "had we improved ties with the
2.3. The business cause:
The conservative camp as a whole consists of a wide array of agents with similar and opposite political and economic interests. One faction, person or strategic alliance at a given time may act in harmony on one occasion but in discord on another with the same counterpart.
Some conservatives may be moderate-tempered, but for expedient considerations or for the sake of the regime survival act in tandem with hardliners on certain occasions. For instance, some hardliners may harshly criticize very powerful conservatives, involved in some illicit business activity or underground economic operation, but would support the same group in a mutual effort to ambush the reformists who advocate a democratic election process.
The multi-layered alliance of
conservatives includes moderate figures who due to their life-time or temporary
positions are dependent on and thus influenced by radical and even rogue
Last but not least, this group consists of powerful traders and mercantilists who nurture on state monopolies, extremely lucrative rents and the traditional socio-economic structure. These forces have throughout the years grown powerful enough to make threats to top decision makers. They are capable of disrupting
Oddly enough, they often control grass-roots, low-income and anti-capitalism youngsters who are dedicated to the Islamic Republic's revolutionary doctrines and the "social justice" slogans of the first revolutionary years. These grass-roots activists are often unaware of the sources that support their organizations. Mostly, they believe to be fighting the roots of capitalism, corruption, rent seeking and monopolies, while ignoring the fact that many of those responsible for these hazards are the same groups that sponsor them. These organizations usually consist of unemployed and uneducated youth who are told to be sponsored by Islamic charity organizations.
3. Anti-Americanism & the Business Cause
The Islamic Republic is aware that efforts to integrate
This said, part of the mainstream conservatives see issues such as Iran's structural adjustments, joining the WTO and similar economic initiatives on the one hand, and détente with the US on the other, as the two ends of the same policy, yet with different paces and different political consequences. Some of the mainstreamers prefer a gradual economic process in order to terminate major rents and monopolies, counter money laundering and stop illegal imports of commodities to the country. The reason is simple: Some of these pressure groups are growing too powerful and are eroding the sovereignty of the state.
These mainstream conservatives see a gradual policy to counter these irregularities, in contrast to a drastic approach, a safe way of dealing with these forces. Notably the high potential for blackmail, the common interest of opposite agents as well as family bonds make a drastic move against those in charge of illicit economic operations the last option for Iran's leadership.
The following points shed some light on
4.1. Illegal Jetties:
Because of deficient trade regulations, many commodities are being smuggled into
The fact that these jetties have not been closed down or that those responsible for the acts of smuggling have not been arrested indicates the extent of their power and influence as well as the state's inability to confront such obvious phenomenon.
According to trade journals, American cigarettes go via
Local press following the arrest of the head of
Iranian press associates the smugglers with para-military armed forces. While there is no evidence as to whether the forces do really smuggle cigarettes and other commodities through the illegal jetties the following points give reason to assume so:
* There are only as many institutions in the Islamic Republic that have access to jetties.
* One of them, the oil industry, is already under scrutiny by the conservatives. This reduces the chances of its involvement in these illegal trafficking.
* Other institutions are either the Islamic Revolutionary Guards Corps or the ministries. Since the government and the reformists have often threatened to disclose information as to who runs these jetties, it is highly unlikely that any of the ministries or institutions under the reformist government would be in charge. Past experience shows that if the reformists had been in charge, the conservatives would have long used this as a political tool to bash the government.
* Western intelligence sources estimate the Lebanese Hizbollah's operational budget to be approximately $200-$500 million annually. Sources of funding include illegal arms trading, cigarette smuggling, currency counterfeiting, credit card fraud, and drug trafficking.
4.3. Parallel Works:
The Islamic Republic is famous for being run by two parallel institutions. This dichotomy is usually the manifestation of parallel works of Islamic and republican entities in politics, society and economy. Mohammad Ali Najafi,
The said book argues that rent seekers (the traditional mercantilists) have "always opposed the government's efforts to establish a transparent and real market economy because policies such as structural adjustments would disrupt their connections to the government and change the conventional network that provides them with rents and exclusive distribution rights of certain commodities." (Bahman Ahmadi Amoui, [in Farsi], 2003 p.380)
According to Najafi, members of the Society of Islamic Coalition (Motalefeh) which is associated with many bonyads, the bazaar, chambers of commerce and charity organizations use their pressure leverages on the government. He argues that this Society's concerns are mainly of business nature and they are often supported by a conservative clerical establishment also close to the traditional bazaar. The reason for this, Najafi argues, is that "some clerics have a rigid perception of communist values and socialism that automatically brings them closer to the opposite concept." Najafi argues that Motalefeh which has often lacked a strong position within the governments, e.g. in the cabinets of the past governments, would use leverages outside the governmental apparatus to pressure the government. (Amoui, p.371)
Khatami's government was able to shed some light on the economic operations of para-state organizations. The bonyads are today subject to tax and the ministry of information has been deprived of the right to undertake economic and trade activities. This is while certain armed forces have yet managed to flee the supervision of the government. Reformists argue that these military and para-military entities still are involved in trade activities and are not subject to any checks and balances system.
Ezatollah Sahabi, the first head of
Masoud Roghani Zanjani, head of the Budget and Planning Organization in 1995, argues that today the debate over parallel institutions is still a crucial issue 26 years after the revolution. "Every minister or head of an organization believes that his decision making sphere is eroded by external forces because unofficial entities surround and influence him. ... This has reduced the power of the government and the state in dealing with crises and has also been an obstacle to the decision making procedure. Often the government makes correct decisions, but is unable to implement them. This leads to loss of resources and backwardness. It also gives rise to more and more disappointment of effective human resources. This issue [parallel institutions] also adversely impacts the legitimacy of the system. (Amoui, p. 187)
Zanjani also refers to the harsh opposition of the bazaari associates to his and Rafsanjani's policies to promote real privatization and economic liberalization. Zanjani says that the head of Motalefeh as head of the parliamentary commission believed these concepts (privatization and economic liberalization) to be equal to full capitulation [to the West]. (Amoui, p. 228)
All this may serves as a small example as to why parallel institutions, the deficient economic structure and lack of transparency would benefit certain power centers. It also shows why any efforts to terminate this state of affairs, make the economy more transparent and reduce the rents are fought back under the pretext of anti-Americanism and liberal economy. This also explains where part of the resistance towards
4.4. Money Laundering:
According to Hossein Heshmati Moulai, a member of the financial research centre of the Central Bank of
One area where money laundering is extensively used is in drug deals, to which
The procedure for money laundering in
4.5. Interest Free Funds:
Another aspect of
One instance are reports from US institutions such as the US Postal Inspection Service. This is
Also the nature of the illicit business demonstrates how unlikely it is that
The channels that facilitate all this-the jetties, the smuggling, the funds and customs apparatuses-are clearly in the hands of influential power centers. It is difficult to believe that these operations are run only by criminals without access to strategic centers of the state.
5. What a Break of Structure May Imply
5.1. Oil Revenues & Rents:
Discovery and exploitation of oil has always been the main factors to make regulations in
The subsidized prices of certain commodities have not only translated into rents through favoritism, but this system has considerably disrupted the country's pricing mechanism as prices have hardly been determined by the market. Obviously, any attempt to change this state of affairs will face resistance.
Similarly, the national currency rate is also determined outside the market system and according to bureaucratic regulations. Consequently, the Rial has often been overvalued. This has been possible through the country's only cash cow, oil revenues. One of the downsides is obviously that the overvalued Rial makes investments in national projects only look financially justified while they are nothing but mere loss.
This façade encourages certain pressure groups to advocate the oil-run economy and support the subsidized commodities. This economic structure, makes the country look economically progressive (due to high oil prices Iran has enjoyed a nominal economic growth rate of over 6% in the past years), while the oil revenues subsidize more and more commodities paving the way for more and more rents for those who have access to them.
This situation puts the government and many of the said interest groups at cross purposes.
5.2. Privatization & Rents:
Privatization without deregulation can hardly pave the way for the operation of a genuine private sector.
Hence, all efforts to privatize
5.3. Taxation & Rents:
Until 1999, hard currency was put at the disposal of seemingly "production units" at a favorite subsidized rate. Taxing these units was like taking back only a small portion of the gains made through the rents given to them. But since 2000, these allegedly production units-who used to sell their currency at the black market-have to purchase their dollars at the official rate. This means less profit for some of those groups that could make a fortune out of the difference between the two exchange rates. Ever since, they have not only lost their side-business-which was making more profit that the actual production business-but these rent seekers are forced to even pay more tax which makes their entire business less lucrative.
All in all, in a monopolistic economic environment, interest groups can impose higher prices on consumers and considerably increase profit margins. With it, the potential for corruption and bribery increases as well.
This system logically appeals to a small but very powerful and extremely well-connected minority in
Resisting change under the revolutionary slogan of "down with the
Estimates in 2003 pointed to between $2 and $4 billion of smuggled imports a year, some $3billion a year of capital flight to foreign safe havens and about $5 billion of illegal drug trade. Moreover, the contribution of
The gradual privatization of the tobacco industry to fight smuggling, the slow campaign to counter unofficial Islamic banking, the small changes to the parallel institutions dilemma as well as the failure to deal with the illegal jetties indicate two points: 1) The state has realized the necessity to change the economic structure of the Islamic Republic as an effort to maintain the regime and 2) the system is unable or, for whatever reasons, reluctant to counter monopolies and rents at a faster pace.
At the same time, the continuous efforts to liberalize Iran's economy and the developments of governments of Rafsanjani and Khatami (read Khatami and Rafsanjani: Similar goals, different legacies) support Najafi, Sahabi and Zanjani's arguments that the rent seekers and monopolists can disrupt the state's macro-policies, despite determination on the highest level to counter these forces.
Should the state for whatever reason have come to the conclusion that these forces are eroding the state's authority and sovereignty, it would still have difficulties containing these forces.
Note the following hypothesis: The state for whatever reason has come to the conclusion that an agreement with the EU and the
• The US does not trust the Islamic Republic. In addition to its reluctance to approach
• This reduces the Europeans' bargaining power to convince
• The ever intensifying regime change discourse pushes
This state of affairs leaves
In the unlikely event that the US accepts Iran's full compliance with the international community, Tehran would have to reconsider its relations with these militant groups, reconsider its approach to international organizations such as the IMF and WTO, and accelerate its efforts to implement structural adjustments and liberalize the economy.
To do all this,
Irrespective of whether or not
It takes no expert opinion to deduct which of the groups discussed in the article would be most opposed to a rapprochement with the
Despite all threats, opportunities still exist. The situation of the said rogue elements has deteriorated in the past eight years. At this point, the mainstream conservatives seem also to have come to the conclusion that the radicals of their own camp are posing a threat to the integrity of the system, especially as external pressure increases on
One thing seems certain, the coming year, irrespective of who will be
About the author: Amir Ali Nourbakhsh is a frequent contributor to many publications and conference on social and political issues in
... Payvand News - 6/1/05 ... --