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To: DoctorZIn
In Iran, it pays to be a religious leader

By Nicholas Birch
Aug 20, 2003

TEHRAN — Two years ago, Hossein Yazdi was looking forward to a quiet retirement. Now he's back at work as one of Tehran's countless unofficial taxi drivers, trying to supplement a monthly pension of $65.

"Two pounds of meat costs $5 these days; most weeks my wife and I go without," he says. "If things carry on like this, people like us will soon be dying of starvation."

Daily conversation here turns with alarming speed to the daily struggle to make ends meet. Yet most economists consider the country to be relatively well managed.

"Iran has huge resources of oil and gas, and the rise in oil prices since 1999 from $10 a barrel to over $26 today has given the economy an immense boost," says Yves Cadilhon, head of the French economic mission in Tehran.

So what are many Iranians complaining about? A powerful group of clerics and merchants who, critics say, have a stranglehold on the economy.

Among the main bastions of clerical control are the bonyad, immense foundations built up after 1979 from wealth confiscated from Mohammed Reza Pahlavi, Iran's last shah. Ostensibly "charitable" organizations, they frequently use their wealth — up to 35 percent of the economy, according to analysts — for questionable purposes. In 1997, for instance, one senior cleric and bonyad boss announced his institution was offering $2.5 million for the assassination of novelist Salman Rushdie.

Another bonyad based in the holy city of Mashhad, in northeastern Iran, has used donations from as many as 8 million pilgrims a year to buy up 90 percent of the arable land in the surrounding region. Controlled since 1979 by arch-conservative Ayatollah Abbas Vaez-Tabazi, the foundation also owns universities and a Coca-Cola factory.

Backed by President Mohammed Khatami, Iran's reform-minded parliament recently scrapped laws exempting the foundations from paying tax. Most observers doubt anything will change. Bonyad bosses, they say, can always fall back on privileged relations with Iran's banks, almost all state owned.

"Credit is rationed," explains Jahangir Amuzegar, who was Iran's finance minister in the 1970s, "and it's rarely private business that gets it."

For now, cash-starved businessmen like Ataollah Khazali, owner of a small smelting works outside Tehran, are obliged to turn for credit to members of the country's bazaari class, strongly pro-regime merchants who double as money lenders.

"Iran lacks liquidity; we do our best to remedy that," one bazaari says. One method, he explains, is the systematic backdating of checks.

The current head of the influential pro-bazaari Coalition of Islamic Associations, Habibollah Asgar-Ouladi, was commerce minister in the 1980s, a position he used to procure lucrative foreign-trade contracts for his brother. The family is now estimated to be worth $400 million.

"These bazaari are like a mafia, obeying no laws," says one clothes manufacturer, who buys all his fabric from them. "If one of them decides to boycott a company, they all do."

With Iran's chronic unemployment — officially 12.5 percent but probably closer to 20 percent — exacerbated by the arrival on the job market of 1980s baby boomers, analysts insist only a radical reworking of Iran's crony capitalism can stave off a crisis.

"The regime knows it has no choice but to liberalize," argues Saeed Laylaz, an assistant manager at Iran's largest car manufacturer.

But Amuzegar is more pessimistic. "It's not Islamic ideology that's holding the system up; it's the clerics' and bazaaris' hold on the economy," he says. "As long as they survive, so will the system." ....

28 posted on 08/20/2003 5:57:26 PM PDT by DoctorZIn
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To: DoctorZIn; F14 Pilot
Thanks for your posts! Good to see you both!

Appreciate the report on your meeting with Brownback last night, Dr.Z.

Forget the doesn't appear to be kosher.

Cuba needs to take care of that little jamming problem ASAP.

"Iran's supreme leader has said his country will never give up its nuclear technology under pressure..."

Okie dokie! Don't gripe when we come calling!

"... by attacking the United Nations the bombers may have made it easier for President Bush to convince European and Arab nations that they have a stake in a peaceful, stable Iraq."

That's good, as long as they are under our leadership, and France and Germany aren't involved.

F14, I couldn't pull up the link you posted.

32 posted on 08/20/2003 9:11:42 PM PDT by dixiechick2000 (All power corrupts. Absolute power is kinda neat though.)
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