BICOM

Key Issues 

• Thirty years after the Islamic revolution in Iran, the clerical regime has very clearly failed to develop a successful ‘Islamic’ model for government and socio-economic development, as it set out to do.
• The economy is faltering and the regime unpopular, able to rule only with the help of extensive means of repression. Because of its nuclear program, the regime also faces international sanctions.
• However, the regime is expert in the means of maintaining power and faces no serious internal threat. Opposition is fragmented and poorly organized.
• Conservative forces are currently on the rise within the clerical elite. Supreme Leader Khamenei is considered by experts to be fully committed to the goal of achieving a nuclear capacity and using it to build regional hegemony. Iran’s negative initial response to overtures from the new US administration suggests that changing the direction of the regime will be no easy task.  

Introduction

Thirty years ago, on February 1, 1979, the defining stage of the Islamic Revolution in Iran began with the return of Ayatollah Ruhollah Khomeini to Teheran. Khomeini was greeted in the city by a crowd of several million. Shah Mohammed Reza Pahlavi had already fled the country in the preceding month. A campaign of strikes, demonstrations and guerrilla warfare had been underway in Iran for the preceding year. The end came on February 11, 1979, when Iran’s military declared itself neutral in fighting between troops loyal to the ‘provisional government’ of Shapour Bakhtiar and rebel forces loyal to Khomeini. 

In the following months, Khomeini consolidated his power. December 1979 saw the approval of a new constitution which put in place the system of government which rules Iran to this day. This system, known as ‘vilayet al-faqih’ (rule by Islamic jurists), established a previously unknown form of rule by a clerical oligarchy, under a Supreme Leader. This post, established specifically for Khomeini, was in command of the country’s military and security services and was responsible for foreign and defence policy. He presided over a complex arrangement of rival legislative and consultative bodies, some elected, some appointed. It is a system which retains its secure hold on power today. This analysis will assess the key issues facing Iran’s rulers, the current balance of power within Iran and the dominant trends within the regime. 

Economic mismanagement

Thirty years after the triumphant seizure of power by Khomeini, the regime he created rules over a faltering economy and a deeply disillusioned populace. The Iranian economy prior to 1979 was one of the most advanced in the Middle East. The eight year war with Iraq in the 1980s, the alienation of the US, chronic economic mismanagement, widespread corruption, and sanctions against Iran resulting from the country’s nuclear program, have combined to reverse this situation. Today, Iran suffers from inflation around 25%[i] and unemployment of at least 15%, and possibly as high as 30%. Around 14 million Iranians out of 66 million live in poverty. Food prices rose 40% in the course of 2008. The regime has proved unable to address these issues.[ii]

President Mahmoud Ahmadinejad has expanded public spending and blocked attempts at economic reform. High oil prices served to camouflage the deep structural defects of the economic system put in place by the regime. Fully 50% of Iran’s state budget is derived from oil revenues.[iii] But with oil prices having fallen considerably, Iran faces bleak economic prospects in the coming period. Despite the lofty rhetoric of the regime, corruption is endemic. Iran ranked 141 out of 179 countries in Transparency International’s Corruption Perceptions Index last year.[iv] The regime’s lack of legitimacy and transparency impacts on its ability to implement much needed economic change. President Ahmadinejad’s attempts to introduce a consumption tax late last year led to outrage among the small business sector which had constituted his main base of support and the plan was rapidly abandoned. Iran also still maintains a system of subsidies for basic fuel and for water which constitute a drain on the economy. It is worth noting that Iran, despite its vast natural reserves of gas and oil, is a net importer of refined petroleum, because the Iranians lack the pipelines and refining capacity to deal with the fuel needs of the population.

Failure to build legitimacy

Though accurate polling is not possible, most analysts agree that the Iranian regime is unpopular. However, the authorities prevent its opponents from organizing and standing in elections. Strikes and demonstrations have taken place in the past year, but no organized popular opposition to the regime exist inside Iran. Iranian opposition outside of the country is also divided and ineffective. One prominent Iranian opposition group, the Islamist MEK (Mujahidin a-Khalq) was until recently designated a terror organization by the EU.[v]

A prominent British analyst of Iran noted that political quietism, and a desire to withdraw from public activity is the choice of many Iranians opposed to the regime. The clerical elite remain able to call on dedicated and organized support, such as the Iranian Revolutionary Guards Corps (IRGC), Basij militia and other forces. It has shown a capacity for extreme repression and violence in defence of its interests which is quite beyond any corresponding willingness or ability on the part of its opponents. But whilst the regime’s existence is not threatened from within, it must still be concerned at its socio-economic failure and its unpopularity. 

Within the regime’s elite, a variety of different trends supporting different approaches to these core problems are competing for power. All trends, however, appear to concur that a basic response of the regime to its internal failure is be to make use of Iranian nationalism and patriotism as a means of maintaining legitimacy. For this reason, Iranian foreign policy, and above all the country’s nuclear program, are of central importance. 

Trends within the regime

Whilst all groups within the clerical elite are in favour of the retention of the regime, analysts have tended to identify three main trends. These are the ‘reformists’, around former President Mohammed Khatami, ‘conservatives’ in the camp of former President Rafsanjani (notably including former chief negotiator and current Parliament Speaker, presidential candidate Ali Larijani), and ‘radical-conservatives’, including current President Ahmadinejad.

The reformists of the Khatami camp are an increasingly marginalized and weak element, prevented from full participation in the political process. The main contest is between the conservative and radical conservative camps. Because of the failure of President Ahmadinejad to develop the economy or tame corruption, and the embarrassment caused by his statements on the international stage, a sense had been developing last year that the radical conservative camp had peaked and was entering decline. This belief was partially belied, however, by the results of elections to the Majlis in March, 2008. Of the available candidates in that election, all of whom were pre-approved by the twelve member ‘Council of Guardians’, both supporters of the president and conservative critics of his administration won large blocs of seats.

Ahmadinejad is a member of a camp associated with prominent members of the IRGC[vi], whose power has been on the rise in Iran in recent years. The failure of the regime to establish legitimacy for itself contributes naturally to the significance of the Revolutionary Guards, who form the regime’s vanguard in Iranian society. In addition to the IRGC’s extensive military capacity, the organization has growing political power and has established itself as an important economic player. It is involved with more than a hundred companies and manages billions of dollars in business.

The next key test of power within the regime will be the presidential elections in June 2009, in which Ahmadinejad will be seeking re-election. His main opponent will be Ali Larijani, who is seen as representing the mainstream conservative camp, and who served as minister of culture under President Rafsanjani. It should be understood that the main difference between Larijani and Ahmadinejad is one of style and means, rather than goals. Larijani is himself a former member of the IRGC, and has said that he has no ideological differences with the current president. In practice this means that conservative forces committed to the Iranian nuclear program, the maintenance of the clerical regime, and building regional influence so as to bolster the regime’s domestic legitimacy and promote its ideology, look set to maintain their dominance. This situation is unlikely to be altered whether Larijani or Ahmadinejad is victorious in June. 

Of course, in the vilayet e-faqih system, ultimate authority rests not with the President or with the Majlis (parliament), but with the Supreme Leader, a position held by Ayatollah Ali Khamenei since 1989. Leading Iran expert Mehdi Khalaji characterizes Khamenei as an ideological leader, convinced of his role as the highest authority on Islamic ideology in the world. He therefore sees himself as responsible for the survival of Islamic ideology and its values. Khalaji considers that Khamenei’s view of himself as the leader of a trans-national Islamic ideology, rather than only a country, is of great importance in defining Iranian policy. He notes Khamenei’s awareness of the regime’s domestic lack of popularity, and his energetic repression of civil society activity. Khalaji considers that Khamenei would be unlikely to sanction a positive response to any overtures from the West, because of this ideological basis for the regime.[vii]

Again, it should be noted that defiance of foreign leaders and of the West plays an instrumental role for the regime, as well as an ideological one. Iranians may not like the regime and may be largely indifferent to its Islamist ideology. But nationalism and patriotism are deeply rooted. Defiance of foreign pressure, maintaining the nuclear program and building the regional power of Iran are all means by which the regime hopes to rally the populace behind it.

Conclusion

Thirty years after the Islamic revolution in Iran, the clerical regime has very clearly failed to develop a successful ‘Islamic’ model for government and socio-economic development, as it set out to do. The economy is faltering and the regime unpopular. It is able to rule only with the help of a system of repression far in excess of that maintained by the Shah, which it replaced. Because of its nuclear program, the regime also faces international pressure and sanctions. However, the Iranian regime faces no serious internal danger to its rule. It is expert in the means of maintaining power and opposition to it is fragmented and poorly organized.

The ideological commitment and the geopolitical ambitions of the Iranian ruling class are similarly undimmed by the thirty year experience of rule. Conservative forces of various stripes are currently on the rise within the clerical elite. Supreme Leader Khamenei is considered by leading Iranian experts to be fully committed to the Iranian goal of achieving a nuclear capacity and using this subsequently to build Iranian regional hegemony. Iran’s initial negative response to overtures from the new US administration suggests that changing the preferred direction of the regime will be no easy task.   

The Islamic revolution in Iran transformed this powerful, ancient nation from a friend and ally of the West and Israel into their most powerful enemy in the Middle East. In spite of the failure of the regime to live up to its early promises, Islamist Iran remains the single most significant challenge to hopes for peaceful, consensual and democratic development in the region.   

 

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[i]  “Iran’s annual inflation rate tops 24%,” Press TV, May, 2008.  http://www.presstv.ir

[ii]  “Iran Food prices surge nearly 50% in September,” Agence France Presse, September 28, 2008. http://afp.google.com

[iii] “Iran energy: Despite high oil revenues, budget deficits remain chronic problem,” Cattlenetwork, August, 2006. http://www.cattlenetwork.com

[iv] The 2008 Transparency Corruption Perceptions Index. http://www.infoplease.com

[v] Ian Black, “Iran condemns EU for taking exiled group off terrorist list,” The Guardian, 26/1/09.  http://www.guardian.co.uk

[vi] The matter of Ahmadinejad’s own involvement in the IRGC remains a matter of dispute.  Some experts consider him to have served as an officer in the IRGC’s security services in the 1980s, and have linked him with the murder overseas of Iranian dissidents. Ahmadinejad’s official response to these allegations has been to deny that he was ever a member of the IRGC. 

[vii] Mehdi Khalaji, “The problems of engaging with Iran’s Supreme Leader,” Washington Institute for Near East policy,” Policywatch 1426, 12/11/08.  http://www.washingtoninstitute.org