Iran
Still failing, still defiant

In the short run, Iran is getting grimmer. One day the ruling ayatollahs will lose their deadening grip on power. But not soon

Special reportDec 11th 2004 edition

“THE firing of a bullet into his damned and blasphemous head is an absolute necessity—and how cherished would that bullet's emissary be.” Those were the gentle words recently directed by one of Iran's leading editors, Hossein Shariatmadari, at an exiled Iranian television presenter, Manouchehr Fouladvand, who has had the cheek to mock aspects of Islam: shades of the fatwa that cast a death sentence on a British writer, Salman Rushdie, cursed for blasphemy in 1989 by the late Ayatollah Ruhallah Khomeini, Iran's supreme leader. A return, then, to the intolerance of the revolution's early days?

Perhaps not. Though Mr Shariatmadari is the influential boss of a state-owned newspaper group, Keyhan, which faithfully echoes the thoughts of Iran's conservative clerical leaders, his exhortation is unlikely to be acted on. Since the kindlier Muhammad Khatami became president in 1997, his governments have managed to dampen Iran's fundamentalist ardour, especially on social matters. Women who flout the Islamic dress-code, which still requires their heads (and the rest of their bodies) to be covered in public, are more rarely threatened with a flogging. The law providing for adulteresses to be stoned to death, though still on the statute book, is suspended. A blind eye is still turned to the many thousands of Iranians who tune in to satellite television, though that is still technically illegal.

Nonetheless, Iran's liberals and reformers feel increasingly beleaguered, and voices such as Mr Shariatmadari's are louder and more menacing than they were even six months ago. In that period, says one of Tehran's longer-serving foreign diplomats, “there has been a dramatic change in mood”. Bullying militias are again trying—so far without much success—to enforce the old morality. Last month a female MP from the conservative camp suggested that if ten “street-walkers” were executed, “We will have dealt with the problem [of prostitution] once and for all.”

More worrying from the liberals' point of view, the reform-minded but disappointingly dithery Mr Khatami has been the lamest of ducks since the ruling clergy and the country's supreme leader, Ayatollah Ali Khamenei, who succeeded Mr Khomeini in 1989, presided over a rigged general election in February when the candicacy of 2,000-plus reformers was blocked. As a result, the new parliament is distinctly more xenophobic and illiberal than its predecessor. Of its 290 members, more than a quarter share the sort of rabid views expressed by Mr Shariatmadari, and they seem to be mocking Mr Khatami with impunity in his last months in office.

The sole remaining liberal daily newspaper of any weight, Shargh, feels obliged to censor itself more rigorously than before for fear of being closed down, as so many of its like-minded counterparts have been. The so-called “red lines” that fence off sensitive issues from discussion are being drawn more tightly. Freedom of expression is diminishing again.

The media have never been allowed to criticise the supreme leader. “But now we cannot attack the judiciary or the Council of Guardians either,” says one of Shargh's editors, referring to Iran's 12-strong body, the most powerful in the land, composed of six clergy appointed by the supreme leader and six others picked by the head of the judiciary, himself picked by the leader. It is they who blocked reform-minded candidates from standing for parliament and refused to ratify virtually all the more enlightened bills—nearly half the total—passed by the previous parliament.

Not that mass repression is needed to keep the media, or the Iranian people in general, in line. According to a respected human-rights campaigner, between 2,000 and 4,000 Iranians, including about 30 journalists, are behind bars for political reasons. The reason for the overall figure's vagueness is that many of those incarcerated are in “unofficial” prisons: even their relatives are not told they are there.

In the past few months detentions have swelled of “bloggers” who have set up internet sites, which the state has taken great trouble to block. A number of well-known campaigners for human rights have been prevented from going abroad or arrested on their return. Human Rights Watch, an independent lobby group, said this week that “secret squads operating under the authority of the Iranian judiciary have used torture to force internet journalists and civil-society activists to write self-incriminatory confession letters”.

Downcast in Tehran

The clampdown seems to be working. Many of the liberal and sophisticated professionals of northern Tehran, downcast by Mr Khatami's failure, seem to have withdrawn into a private life behind the walls of their villas. Many are emigrating, at an estimated rate of 200,000 a year, especially to the United States (where there may be 800,000 Iranians), Canada (perhaps the most popular destination), Britain, France and Australia.

Mr Khamenei seems, on the face of things, more dominant than ever. But power in Iran is by no means monolithic. Even the conservatives divide into various strands, from rigid puritans to cautious pragmatists. Some, for economic and strategic reasons, would like Iran to accommodate with the West, even with the United States. Others, loth to stain the revolution's purity, are prepared to accept Iran's isolation, protecting the country from the “westoxification” that has, in their view, corrupted so many Muslim countries. Yet others think they can defend the old morality and the political dominance of the clergy while, at the same time, opening the economy to the West; they invoke a “Chinese model”. Policy may, in the course of the next few years, shift back in a more liberal direction. Or it may not. The future is highly unpredictable.

The one thing everyone knows is that Iran is in a jam. Above all, plainly, there is a crisis of legitimacy. Only half of Iranians bothered to vote in February's election; not much more than a quarter of those in Tehran, which embraces at least 8m people, turned out. Western diplomats reckon that barely 15% of Iranians still support the ruling order. The low turnout reflected not just apathy and fatalism, which are indeed strong. Many sour and embittered Iranians consciously decided not to go to the polls as a gesture of protest.

“We've come to a dead end,” says Grand Ayatollah Yusef Saanei, one of a dozen clerics to hold this high rank in Iran but whose liberal views, especially on women's rights, have put him out of favour with the ruling clergy.

According to some reports, disaffection with the regime even among the clergy is spreading. A cleric from an influential religious family, also out of favour with the supreme leader, derides the Council of Guardians for mostly taking “orders and hints from the powers that be”—a euphemism for Mr Khamenei. Most striking of all, sociologists and educators report that religious belief and observance, especially among the young, have slumped since the mullahs took power a quarter of a century ago. Instead of fortifying the people's devotion, the system seems to have switched many people off the spiritual side of life, inspiring a shallow materialism instead.

In a population of around 70m, one-third are reckoned to be under 14 and two-thirds under 35. Though the economy grew by about 6% last year, it is not expanding fast enough to keep unemployment down. Around 16% are officially jobless, though the real figure may be higher. At about 17%, inflation is rising faster than wages. Though the necessities of life, such as bread and potatoes, are hugely subsidised, the lot of the urban poor, whose minimum wage is around $12 a month, is dire.

The mullahs have patently failed to revamp an economy that remains distorted by subsidies, closed to competition within Iran or from abroad, locked in the hands either of the state or of state-connected foundations known as bonyads, and increasingly reliant on the high price of oil: Iran has about a tenth of the world's known reserves. Barely a fifth of the economy is in private hands. The conservatives have made it hard for the timid Mr Khatami to sell off state firms or open up to foreigners. The merchants of the bazaar, a longstanding pillar of the mullahs' power, still protect their own cartels. Capital flight continues apace. Only four private banks exist (three of them linked to bonyads or to the state), with just 4% of the banking sector's assets. Corruption in every sphere of business stunts growth and puts off investors. People mutter about the mullahs' wealth and patronage.

The new parliament has been especially obstructive, preventing, for instance, a Turkish company (“with Zionist links”, so it was bruited) from acquiring a mobile-phone franchise to break the current inefficient monopoly. It has also prevented the opening of Tehran's new airport, because it would have been operated by a Turkish-led consortium—so, in the conservatives' view, imperilling national security. Most recently, parliament has threatened to unpick a big deal with Renault, the French car-maker, to produce a new car.

Without oil at its present sky-high price, Iran's economy would be in wretched straits. Oil provides about half the government's revenue and at least 80% of export earnings. But, once again under the influence of the zealots in parliament, the oil cash is being spent on boosting wasteful subsidies rather than on much-needed development and new technology.

Comparisons with neighbouring Turkey are instructive, painfully so to Iranians who look beyond their own borders. Before Iran's revolution, Turkey was behindhand on practically every count—foreign direct investment, income per head, GDP growth. Now the reverse is true. More noticeably, Turkey's politics have become far more open, its (still patchy) human-rights record has improved, its media and civil society are much bouncier than in Iran. Turkey has had a female prime minister; since the revolution, Iran has not even had a woman minister. Turkey is moving ahead, and may even join the European Union; Iran is falling behind.

Other regional comparisons further irritate Iranians. The Qataris have far outstripped them in exploiting the huge gasfield they share. Tiny Dubai, across the Gulf, now draws in much more foreign investment: Iranians go there for banking, for trade (and sanctions-busting) and for fun. Farther along the Caspian shore, Azerbaijan, with American know-how, is developing its oilfields far more dynamically; Iran's productivity rate has plummeted.

In the face of such gloomy contrasts, Iran cannot make up its mind whether to co-operate with the perfidious infidel West to save its economic skin and strengthen its security, or to keep its Islamist soul unsullied. That dilemma is at the heart of the present wrangle over nuclear power.

Why they want nukes

For all its recent sense of failure, Iran still yearns to be acknowledged as a leading power, even the leading power, in the area. In some respects, it is not doing badly. Iraq and Afghanistan, neighbours on either side, have—in Iranian eyes—been humiliated by occupation by the Great Satan. Iraq, its old foe, is a mess. Turkey apart, Iran is a giant that looks steadier on its feet than some of its neighbours. And if ramshackle Pakistan, to the east, can have a nuclear bomb yet remain a crucial ally of the West, why shouldn't Iran have one too?

Publicly, it says it does not want one. But with vast and cheap supplies of gas and oil, few observers think Iran really needs nuclear energy. The International Atomic Energy Agency (IAEA), the UN's nuclear watchdog, has found no irrefutable evidence that Iran is building a bomb. Last week, the head of Iran's Atomic Energy Organisation, Gholamreza Aghazadeh, chirpily told The Economist, “We've never even thought about it.”

But a mass of circumstantial evidence, along with a tangle of lies, omissions and evasions in the face of the agency's inquiries, has convinced just about every independent analyst that Iran has indeed been trying to build—or at least have the capacity to build—a nuclear bomb, in violation of the Nuclear Non-Proliferation Treaty, under which it promised not to do so. (It has also proclaimed the extension of its Shahab-3 missile's range from 850 to 1,250 miles, within striking distance of Tel Aviv.) Israel, an undeclared nuclear power that has never signed the NPT, and whose right to exist has never been recognised by Iran's ruling mullahs, is particularly exercised by the prospect of an Iranian bomb—and has hinted it might hit a range of would-be nuclear targets across Iran.

In the end, it is all about national pride—and high-stake risks, tortuous and deliberately time-consuming negotiation, fine calculations, deception and bluff.

These are the options:

• The leading three European countries (Britain, France and Germany), which have been negotiating since last year, manage to persuade Iran to stop its uranium-enrichment and plutonium-reprocessing programmes that could have a military as well as civilian purpose, and allow intrusive checks by the IAEA, in return for trade agreements and other sweeteners. But the best guess is that the Iranians will still spin things out, while beavering away at getting the wherewithal for a bomb.

• A “grand bargain” (tentatively mooted by John Kerry) with the Americans, who would end a quarter of a century of hostility, lift their economic sanctions now in force, and forge a complete rapprochement. This would also entail Iran co-operating against terrorism, opening up its economy, improving human rights and recognising Israel (the ayatollahs say they would accept a Jewish state once they are satisfied that the Palestinians do, too). Few people think this option will be taken up.

• If both those options come to naught, it is possible that Iran will be referred to the UN Security Council for its breaches of the NPT and could then face worldwide sanctions. As things stand, China and Russia are likely to block such a resolution, but it is conceivable that Russia could change its mind, and China abstain.

• If the blockage continues, either Israel or the United States might bomb Iran's nuclear sites, just as Israel knocked out Iraq's Osirak reactor in 1981. It would be harder, as Iran's sites are scattered, and some are deep underground. A concerted attack would probably set back Iran's nuclear schemes by several years or more—but not end them. And it would risk bloody retaliation against Israel and America.

As things stand, Iran will probably attain the capacity to make a bomb and, after an Indian-style period of “strategic ambiguity”, break out of the NPT. It would be unlikely ever to use this weapon. But it would be safer, perhaps, from the sort of attack launched on it by Saddam Hussein 24 years ago.

No sign of the ayatollahs falling, then?

The American administration's hope that sanctions and other pressures will eventually force a change of regime in Tehran looks, in the foreseeable future, forlorn. And an Israeli or American attack might well have the adverse effect of rallying Iranians to their rather unpopular regime.

Otherwise, only three things could jolt Iran out of its present torpor of stagnation and depression. One is the presidential election due in May. Another, further down the road, is a dramatic slump in the oil price. The third is the possibility of a Gorbachev figure emerging from within the clerical establishment to open up the deadening political and economic system. At present none of these three possibilities looks likely, at least not in the short run.

The presidential candidate, so far undeclared, who has aroused most debate—and cautious hope among some of those seeking change—is Ali Akbar Hashemi Rafsanjani, a former president who now heads the Expediency Council, an influential mediating body. He is generally dubbed a “pragmatic conservative”. Some businessmen think he would help open the economy; others demur, considering him the epitome of the rich mullah with fingers in every pie but no real yen for the market.

He is undoubtedly a cunning fellow with a penchant for intrigue at home and abroad—Americans have not forgotten how he humiliated them during the Iran-contra affair. He is also unpopular among the people at large, scoring dismally in the general election earlier this year. But the ruling mullahs have their ways of promoting—and blocking—candidates. The presidency, as Mr Khatami has shown, can anyway be emasculated. But if Mr Rafsanjani got it, he might make a difference.

Is there a Gorbachev elsewhere among the mullahs? It is an unlikely prospect, but the inner workings of Iran's clerical establishment are mysterious and supremely opaque. Mr Khamenei's standing, such as it is, has fallen—even, it is said, among the clergy. The opposition, at present, is numb. Only if the price of oil, say, halved, and the economy really dived would the anger and frustration well up again and bring people out on the street. And so long as that does not happen, the Iranians are miserably stuck with what they've got.

This article appeared in the Special report section of the print edition under the headline "Still failing, still defiant"

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