Banking on prosperity
Monday April 5, 2004
By Dan De Luce
The world's media seemed to expect drama and confrontation when Iran's clerical regime banned more than 2,000 candidates from standing in parliamentary elections in February.
However, that drama never materialised. A sit-in held by blacklisted MPs came to nothing. Reformist cabinet ministers threatened to resign, but ended up staying in office. Without a single street protest, the conservative establishment took back control of parliament in an orchestrated election.
The conservatives, allied with Iran's supreme leader, Ayatollah Ali Khamenei, correctly calculated that the public had long since given up on the reformists.
Millions of voters had come out in support of reformists in previous elections, believing that the president, Mohammad Khatami, and his allies could nudge the country's authoritarian theocracy towards genuine democracy and tolerance. This year, however, they stayed at home.
After humiliating Mr Khatami and killing off his experiment with reform, the conservatives are gambling that prosperity, not democracy, will keep them in power.
The victorious conservative bloc, Developers of Islamic Iran, has promised to create what it calls a more "efficient parliament", and says that it will turn Iran into an "Islamic Japan". The group has yet to explain how it will manage to create more jobs and curb inflation while speeding up the privatisation of state-owned industry.
According to Iranian newspapers, the conservatives are pursuing the "China model". This scenario would see the regime open up the vast state-owned economy, and tolerate a degree of social freedom, while keeping a firm hand on the levers of political authority.
On paper, Iran's economy is booming. Oil prices are high, and climbing higher, with hundreds of millions of dollars in oil revenue flowing into government coffers every month.
The country's robust growth figures are the envy of the Middle East, with GDP at more than 6% over the past two years. The roads are full of flashy new cars, and mobile phone sales are brisk.
Much of the growth is based on high oil prices and a speculative bubble in the property market. But, for ordinary Iranians, all that oil wealth does not seem to be trickling down.
Inflation eats away at wages. Secure, full-time jobs are hard to come by. Unemployment is officially standing at 15% and, according to most economists, is probably higher.
In the capital, Tehran, and other major cities, housing has become unaffordable for young couples without affluent parents. Teachers, and workers in the state car industry, have launched strike action over low wages in recent months. The gap between rich and poor is steadily increasing, even according to cautious government estimates.
Sensing public frustration, conservative commentators speak about the need for social justice and a fight against corruption.
"We want to use social welfare measures and also proceed with privatisation plans, so the gap between rich and poor does not increase," said Amir Mohebian, a pragmatic voice among the conservatives, who writes for the daily newspaper Resalaat.
To address Iran's economic problems, the conservatives would have to make painful choices and take on vested interests that profit from the mercantile system.
Attracting more foreign investment would require dismantling large, inefficient state-owned enterprises, as well quasi-state foundations, or bonyads, that enjoy monopolistic privileges.
No government has been willing to take the decision to shut down enterprises employing large numbers of workers, or to confront the powerful bonyads that have close ties to the ruling clergy. Previous attempts to wean Iran from its dependence on oil exports have failed.
During the early 90s, former president Ali Akbar Hashemi Rafsanjani recruited western-educated technocrats and set out ambitious plans for economic liberalisation. The reforms ended in half-measures and debt, with the bazaar merchant class firmly entrenched in monopolies and cronyism.
If fundamental reform seems unlikely, the regime may instead use the cash generated from higher oil revenues as a way of softening the effects of inflation through subsidies.
Such measures won't bring prosperity, but they might defuse tensions among the majority of Iranians, whose wages are outstripped by inflation.
On the ideological front, the regime has decided to turn a blind eye to violations of the Islamic dress code and rules that discourage mingling with the opposite sex. State television now shows Hollywood films alongside religious and ideological programming, with glamorous foreign women appearing without the veil.
Hamid Reza Taraqi, a leading member of the conservative Motalefeh party, said that CDs not completely in line with Islam have been allowed, and restrictions on how young people dress have been adjusted.
"We have provided normal freedoms in society and in the university environment for youth to express their mentality and worth in the way they dress, the way they wear their hair and also the kind of [social] relations they have," he said.
Such comments illustrate how the conservatives seem ready to abandon aspects of the ideology of the 1979 Islamic revolution to stay in power, and to co-opt the reformist agenda when convenient.
Hardline ideologues, who favour a strict interpretation of Islamic Sharia law, oppose moves to mollify the younger generation and worry about Iran taking a conciliatory stance towards former adversaries, both in the region and in the west.
Last October, they were incensed the leadership backed down and agreed to intrusive UN inspections of Iran's nuclear sites.
"If the system wants to rationalise and improve its image, then it means marginalising these hardliners," one Iranian analyst, who asked not to be named, said. "But there would be consequences for that."
Conflict between so-called "pragmatists" and the more ideological elements of the conservative establishment will increasingly emerge over economic reforms, social freedom and foreign policy.
Less than a week after the election, the head of the judiciary, Ayatollah Mahmoud Hashemi-Shahrudi, called for the creation of a new government office to combat "vice".
The comment, made on state media, seemed to hint at a revival of the notorious "komiteh" morals police that once patrolled the streets, enforcing strict Islamic dress codes.
The judicial chief's remarks were quickly buried, and the conservative press ignored the suggestion - a sign, perhaps, that the regime wanted to avoid antagonising Iranians over social restrictions.
While it has moved to stifle democracy activists, and keeps dozens of political dissidents in jail, no one expects the theocratic leadership to turn the clock back to the severe repression that followed the 1979 revolution.
Instead, Iran may be entering an era of stagnation, in which political opposition remains disorganised and oil wealth keeps the economy afloat.
Still reeling from their defeat, the reformists are debating the way forward. The more strident among them are considering forming a unified "front" that would openly advocate a secular state without superior authority invested in the Shia clergy.
One prominent student leader, Mehid Aminizadeh, of the Office to Foster Unity, said that the reformists never had a clear idea of what they were striving for. "This is the time for thought, contemplation and reconstruction," he said. http://www.guardian.co.uk/elsewhere/journalist/story/0,7792,1186098,00.html