IRAN

Submitted by:

Lee, Charles William

Salon, Ana Vanilla

Villegas, Belon Babes

Bachelor of Arts in International Studies- 3

I.S 41 XC

Submitted to:

Jose Anthony Laurent P. Octavio

I.S 41

PROFILE:

Geography
Area: 1.6 million sq. km. (636,295 sq. mi., slightly larger than Alaska).
Arable land: 9.78% of the country.
Cities: Capital--Tehran. Other cities--Isfahan, Tabriz, Mashhad, Shiraz, Yazd, Qom.
Terrain: Desert and mountains.
Climate: Semiarid; subtropical along the Caspian coast.
People
Nationality: Noun and adjective--Iranian(s).
Population (July 2010 est.): 76,923,300 million.
Population growth rate (July 2010): 0. 1.253%%.
Ethnic groups: Persians 51%, Azeri 24%, Gilaki and Mazandarani 8%, Kurd 7%, Arab 3%, Lur 2%,
Baloch 2%, Turkmen 2%, other 1%.
Religions: Shi'a Muslim 89%; Sunni Muslim 9%; Zoroastrian, Jewish, Christian, and Baha'i 2%.
Languages: Persian and Persian dialects 58%, Turkic languages (besides Turkish) 26%, Kurdish
9%, Luri 2%, Balochi 1%, Arabic 1%, Turkish 1%, other 2%.
Education: Literacy (total population age 15 and over who can read and write, 2003)--79% (male:
86%, female: 73%).
Health (2010 est.): Infant mortality rate-- 43.45 deaths/1,000 live births. Life expectancy at birth
(2010)--total population: 69.77yrs.
Government
Type: Islamic republic.
Constitution: Ratified in December 1979, revised 1989.
Branches: Executive--Supreme Leader (head of state), President (head of government), Council
of Ministers, Assembly of Experts, Expediency Council, Council of Guardians. Legislative--290-
member Majles (National Assembly, or Islamic Consultative Assembly). Judicial--Supreme
Judiciary.
Political parties: Several conservative groups have come together under two separate coalitions,
the United Front of Principlists and the Broad and Popular Coalition of Principlists. Some
conservative groups remain outside either coalition. Similarly, several reformist groups, such as
the Islamic Iran Participation Front (IIFP, also known as Mosharekat) and the Mojahideen of the
Islamic Revolution (MIRO) came together as a reformist coalition in advance of the 2008 Majles
elections. Another influential reformist group is the National Trust Party.
Administrative subdivisions: 30 provinces.
Suffrage: Universal suffrage; 18 years of age.
Economy
GDP (purchasing power parity, 2010 est.): $ 863.5 billion.
GDP (official exchange rate, 2010 est.): $337.9 billion.
GDP real growth rate (2010 est.): 3%.
GDP composition by sector (2010 est.): Agriculture 11%, industry 45.9%, services 43.1%.
Per capita income (PPP, 2010 est.): $11,200.
Work force (2010 est.): 25.7 million.
Work force - by occupation (June 2007): Agriculture 25%, industry 31%, services 45%.
Unemployment rate (2010 est., according to the Iranian Government): 14.6%.
Natural resources: Petroleum, natural gas, coal, chromium, copper, iron ore, lead manganese,
zinc, sulfur.
Agriculture: Principal products--wheat, rice, other grains, sugar beets, fruits, nuts, cotton, dairy
products, wool, caviar.
Industry: Types--petroleum, petrochemicals, textiles, cement and building materials, food
processing (particularly sugar refining and vegetable oil production), metal fabricating
(particularly steel and copper), armaments.
Trade (2010 est.): Exports--$78.69 billion (2010 est.): petroleum 80%, chemical and
petrochemical products, carpets, fruits, nuts. Major export partners (2009)--China (16.58 %),
Japan (11.9 %), India (10.54 %), South Korea (7.54 %), Turkey (4.63 %). Imports--$58.97 billion
(2010 est.): industrial raw materials and intermediate goods, capital goods, foodstuffs and other
consumer goods, technical services, military supplies. Major import partners (2009)--U.A.E.
(15.14 %), China (13.48 %), Germany (9.66%), South Korea (7.16 %), Russia (4.81 %), Italy
(5.27%), India (4.12%).
PEOPLE
Iran is a pluralistic society. Persians are the largest ethnic group in Iran, though many are
actually of mixed ancestry. The population of the country has important Turkic elements (e.g.,
Azeris) and Arabs predominate in the southwest. In addition, Iran’s population includes Kurds,
Balochi, Bakhtyari, Lurs, and other smaller minorities, such as Armenians, Assyrians, Jews, and
Brahuis (or Brohi).

The 1979 Islamic Revolution and the 1980-88 Iran-Iraq war transformed Iran's class structure
politically, socially, and economically. During this period, Shi’a clerics took a more dominant
position in politics and nearly all aspects of Iranian life, both urban and rural. After the fall of the
Pahlavi dynasty in 1979, much of the urban upper class of prominent merchants, industrialists,
and professionals, favored by the former monarch, Shah Mohammad Reza Pahlavi, lost standing
and influence to the senior clergy and their supporters. However, Bazaar merchants, who were
allied with the clergy against the Shah, gained significant political and economic power after the
revolution. The urban working class has enjoyed a somewhat enhanced status and economic
mobility, spurred in part by opportunities provided by revolutionary organizations and the
government bureaucracy. Though the number of clergy holding senior positions in the Majles and
elsewhere in government has declined since the 1979 revolution, Iran has nevertheless
witnessed the rise of a post-revolutionary elite among clerics who are strongly committed to the
preservation of the Islamic Republic.

Most Iranians are Muslims; 89% belong to the Shi'a branch of Islam, the official state religion,
while about 9% belong to the Sunni branch. Non-Muslim minorities include Zoroastrians, Jews,
Baha'is, and Christians.

MODERN HISTORY OF IRAN

1914- Iran hoped to avoid entanglement in World War I by declaring its neutrality, but ended up
as a battleground for Russian, Turkish, and British troops. When German agents tried to arouse
the southern tribes against the British, Britain created an armed force, the South Persia Rifles, to
protect its interests. Then a group of Iranian notables led by Nezam os Saltaneh Mafi, hoping to
escape Anglo-Russian dominance and sympathetic to the German war effort, left Tehran, first for
Qom and then for Kermanshah (renamed Bakhtaran after the fall of Mohammad Reza Shah in
1979), where they established a provisional government. The provisional government lasted for
the duration of the war but failed to capture much support. At the end of the war, because of
Russia's preoccupation with its own revolution, Britain was the dominant influence in Tehran. The
foreign secretary, Lord Curzon, proposed an agreement under which Britain would provide Iran
with a loan and with advisers to the army and virtually every government department. The
Iranian prime minister, Vosuq od-Dowleh, and two members of his cabinet who had received a
large financial inducement from the British, supported the agreement. The Anglo-Persian
Agreement of 1919 was widely viewed as establishing a British protectorate over Iran. However,
it aroused considerable opposition, and the Majlis refused to approve it. The agreement was
already dead when, in February 1921, Persian Cossacks Brigade officer Reza Khan, in
collaboration with prominent journalist Sayyid Zia ad Din Tabatabai, marched into Tehran and
seized power, inaugurating a new phase in Iran's modern history.

1921- Reza Khan, a military officer in Persia's Cossack Brigade, names himself shah of Persia
after successfully staging a coup against the government of the Qajar Dynasty. He immediately
launches an ambitious campaign to modernize the country. Among other plans, he hopes to
develop a national public education system, build a national railroad system and improve health
care.

1925- Ahmad Shah, the Qajar dynasty's final ruler, is deposed, and an assembly votes in Reza
Khan (who had adopted the last name Pahlavi) as Persia's new shah.
1926 -Reza Khan Pahlavi is crowned, marking the beginning of the Pahlavi Dynasty. The shah's
eldest son, Mohammad Reza, is named crown prince.

1935 -Persia is officially renamed Iran. By the mid-'30s, Reza Khan's dictatorial approach begins
to cause dissent.

1941- Although Reza Khan declares Iran a neutral power during World War II, Iran's British-
controlled oil interests are largely maintained by German engineers and technicians, and Khan
refuses to expel German citizens despite a request by Britain. In September 1941, following
British and Soviet occupation of western Iran, Reza Shah is forced out of power. His son,
Mohammad Reza Shah Pahlavi, succeeds him on the throne.

1949- An attempt on the shah's life, attributed to the pro-Soviet Tudeh Party, results in an
expansion of the Mohammad Reza Shah Pahlavi's constitutional powers.

1951- Nationalist Prime Minister Mohammed Mossadeq attempts to nationalize the British-owned
oil industry. The shah opposes Mossadeq and removes him from power, but he regains power
and the shah leaves Iran.

1953- The shah returns to Iran when Gen. Fazlollah Zahedi -- with backing from the Central
Intelligence Agency -- overthrows Mossadeq in an August coup d'etat.

1957- According to the Federation of American Scientists, U.S. and Israeli intelligence officers
work with Iran to set up SAVAK, an Iranian intelligence organization later blamed for the torture
and execution of thousands of political prisoners and violent suppression of dissent.

1963-The shah implements "The White Revolution," an aggressive campaign of social and
economic Westernization that is met with intense popular opposition. Popular nationalist
Ayatollah Khomeini is arrested in one of many crackdowns on the shah's opponents. By the late
1960s the shah relies regularly on SAVAK to quell dissidence.

1976-In one of a series of reforms that alienate his people, the shah replaces the Islamic
calendar with an "imperial" calendar, beginning with the founding of the Persian Empire. Many of
the shah's growing number of critics see this as anti-Islamic.

1978-Iranians resort to rioting, mass demonstrations and strikes to protest the shah's
authoritarian rule. In response, he enforces martial law. The shah flees Iran amid intensifying
unrest. Islamic nationalist Ayatollah Khomeini returns from France, where he was exiled for his
opposition to the shah's regime. He encourages the brewing revolution. Under Ayatollah
Khomeini's guidance, Iran declares itself a theocratic republic guided by Islamic principles, and a
referendum is held to name it the Islamic Republic of Iran.

Islamic students storm the U.S. Embassy in Tehran, taking hostage 52 American employees and
demand that the shah return from receiving medical treatment in the United States to face trial
in Iran. Ayatollah Khomeini applauds their actions. The hostage situation ignites a crisis between
the United States and Iran.

1980- Iran and the United States sever diplomatic ties over the hostage crisis, and the U.S.
Embassy becomes a training ground for the Revolutionary Guards Corps.The shah dies in exile in
Egypt. Iraq invades Iran after years of disagreements over territory, most notably the Shatt al
Arab waterway. When Iraqi President Saddam Hussein announces his intention to reclaim the
Shatt al Arab, an eight-year war breaks out.

1981- Following negotiations mediated by Algeria, the U.S. hostages are released after 444 days
of captivity.
1985- The United States covertly seeks to sell arms to Iran in exchange for the release of seven
American hostages being held by Iranian-backed militants in Lebanon, prompting the Iran-Contra
scandal.

1988- An American navy ship, the USS Vincennes, shoots down an Iranian civilian plane, killing
all 290 passengers and the crew. The United States later apologizes and agrees to financial
compensation for the victims’ families, saying the civilian plane was mistaken for an attacking
military jet. Iran accepts United Nations Security Council Resolution 598, leading to a cease-fire
in the Iran-Iraq War.

1989- Indian author Salman Rushdie’s book "The Satanic Verses" causes uproar among
fundamentalist Muslims, and Ayatollah Khomeini places a fatwa (religious edict) on the writer,
saying his book is "blasphemous against Islam." The ayatollah calls on all "zealous Muslims" to
kill Rushdie, placing a $3 million bounty on his head.Khomeini dies. An elected body of senior
clerics -- the Assembly of Experts -- chooses the outgoing president of the Islamic Republic, Ali
Khamenei, to succeed Khomeini as the national religious leader. Ali Akbar Hashemi-Rafsanjani,
the speaker of the National Assembly, becomes president. Rafsanjani was an influential member
of the Council of Revolution of Iran in the Islamic Republic’s early days.

1993- Rafsanjani wins re-election.

1995- The United States places oil and trade sanctions on Iran, accusing the country of
sponsoring terrorism, committing human rights abuses and seeking to sabotage the Arab-Israeli
peace process.

1997- (Ali) Mohammad Khatami-Ardakani is elected to the presidency in a landslide victory

amidst his pledges of political and social reforms as well as economic revitalization.

2001- President Khatami wins re-election.

2000- Pro-reform candidates and allies of President Khatami win 189 of the 290 seats in
parliament, setting the stage for reformers to control the legislature for the first time since the
1979 Islamic revolution. Conservatives win 54 seats, independents 42 and another five seats are
reserved for religious minorities.

2002- In his January State of the Union speech, American President George W. Bush refers to
Iran as part of an "axis of evil," saying the country is actively pursuing weapons of mass
destruction. The speech is met with anger in Iran. Iranian Foreign Minister Kamal Kharrazi
responds by calling President Bush's comments "arrogant" and saying Iran sees them as
"interference in its internal affairs."

2003 -The International Atomic Energy Agency says Iran admits to plutonium production, but the
agency says there is no evidence that Iran is developing nuclear weapons. Iran agrees to more
rigorous U.N. inspections of nuclear facilities.

2004-Conservatives reclaim control of Iran's parliament after controversial elections that were
boycotted by reformists. Iran's government says it will consider re-starting its nuclear program.

2005-Mahmoud Ahmadinejad, the hardline Islamic mayor of Tehran, who campaigned as a

champion of the poor and pledged to return to the values of the revolution of 1979, defeats one
of Iran's elder statesmen in presidential elections.

2006
Iranian President Mahmoud Ahmadinejad sends a letter to President Bush calling for ways to
ease tensions over Iran's nuclear program, but continues to defy U.N. deadlines to halt uranium
enrichment activities. Ahmadinejad insists the nuclear program is for civilian energy purposes
only.

2007 -Iranian President Mahmoud Ahmadinejad visits the United States, and accuses Israel of
occupation and racism during a speech to the U.N. General Assembly. The United States
announces new economic sanctions against Iran targeted to impact the country's military and
halt Tehran's disputed nuclear program. A U.S. National Intelligence Estimate report finds that
Iran stopped developing nuclear weapons in 2003, but continues to enrich uranium and could
still develop atomic arms in the future.

2008- The International Atomic Energy Agency releases a report saying Iran's suspected
research into the development of nuclear weapons remained "a matter of serious concern."
European Union nations agree to impose new sanctions against Iran.

2009- Iranian President Mahmoud Ahmadinejad is declared the landslide victor in presidential
elections, sparking protests by supporters of candidate Mir Hossein Mousavi, who unsuccessfully
appealed the results to Iran's Guardian Council.

Political economy:

Democracy as a system of government is proclaimed to be superior to dictatorship. Since

the collapse of the system in the Soviet Union and Eastern European countries, people in all
countries are converging on the ideal of democracy to improve economic performance of their
country as well as to ameliorate the human and civil rights of the people. For more than a
century, the people of Iran have struggled to establish a democratic system of government. The
Constitutional Revolution of 1907 in Iran tried to replace absolute monarchial regime with
constitutional monarchy and parliamentary democracy, but it had limited success and a
dictatorial monarchy was imposed. In the early 1950s a conflict emerged between nationalists,
led by Prime Minister Mossaddegh, and monarchists, led by the Shah himself. The conflict
concerned the extent of power and control exercised by the Shah and the royal family in the
state's affairs and the nationalization of oil. In 1953 Mossaddegh was removed from power and
arrested in an American CIA-engineered coup. Mossaddegh's overthrow occurred in part because
he had nationalized British property. Iran's long border with the Soviet Union, which had an
active Communist party, was considered to be in great danger of falling to communism.1.With
harsh repressive measures, the Shah was reinstalled. Soon, the Shah, through repression,
established an absolute monarchy and controlled all the affairs of the country.2
The popular uprising against the Shah's dictatorship in the late 1970s led to the Revolution of
1979. Although there were many political organizations and groups with different ideologies and
political orientations during the revolutionary process, the Islamic clerics gained hegemony and
hijacked the ideals of revolution: liberty, justice and democracy; and turned the rebellion into an
Islamic Revolution. The clerics eliminated other ideologies and tendencies in the system during
the early years of the revolution and imposed a more repressive Islamic government on the
people and the country. The Islamic regime has resulted in great economic and human loss and
suffering since the Revolution of 1979.
This paper identifies and defines the political system in Iran without going through the historical
analysis of how the regime established itself. From a political economy point of view, the
Supreme Leader uses the scarce economic resources to repress the opposition, buy political
loyalty, and maintain political power. This paper uses a political power production function model
to establish the conditions under which the Islamic regime in Iran obtains power and behavior.
The paper also shows the process by which the regime can be deprived of its power and move
toward establishing a democratic system of government in Iran, using property rights theory and
human rights theory approaches. These theories are used to compare different political systems
in terms of their capacity to allocate power as well as to promote economic growth and
efficiency.
THE ISLAMIC REGIME IN IRAN
In democratic societies, power is formally delegated to governments through free elections.
Governments, in turn, use this power to affect the economy by regulating industries and
providing public goods. Modem property rights theory allocates capital resources in the economy
and human rights theory allocates political power. Property rights theory indicates that two
conditions are necessary for private bargaining to allocate resources efficiently:3
1. Property rights should be well defined; and
2. Property rights should be transferable at low cost.
Coase's theory implies that resources will be allocated efficiently by private bargaining. These
property rights are the rights to possess, use, develop, improve, transfer, consume, deplete,
destroy, sell, donate, transform, mortgage, lease, loan, etc. According to Coase, transferability of
property would maximize the market value of these assets allowing the people to own the assets
that are most valuable to them.
In democratic societies, political systems are based on human rights, while the capitalist mode of
production is based on property rights. Democracy makes power transferable just as capitalism
makes the ownership of capital assets transferable. The economic advantage of the election in a
democracy is that it allows transfer of power at a relatively low cost. In dictatorial systems, which
do not allow free and fair elections, the way to transfer power and dismiss the regime is by costly
means such as revolutions, insurrections, coups, or wars (e.g., the invasion of the Iraq to remove
Saddam Hussein from power). Compared to these costly means, democratic elections based on
inalienable human rights provide a formal and consensual procedure to decide on the allocation
of political power. In a democracy, a government derives its legitimacy from the people and thus
is the only regime that makes it possible for the ruled to dismiss a given government without
bloodshed. Because the costs of transferring power are low, it is at least possible that power will
flow into the hands where it is most valuable.4 In a functioning democratic system, the election
mechanism consists of the following:
1. There is a contest for the principal positions of political power and voters decide on a winner.
This free election legitimizes the transfer of power to the winning group as the representative of
the people;
2. The election is competitive; except for criminals, no one is barred from entry into politics;
3. Elections take place on the basis of inalienable human rights. Individuals have the absolute
and unconditional freedom to express, organize, vote and participate in politics in any way
without fear of reprisal from any individual or group;
4. There is the presence of an independent judiciary to protect human rights of the people.
Politicians and government officials are constrained in their actions by the rule of law, so that no
individual or group in government can take reprisal against any citizen or group;
5. Citizens are protected from political terror and unjustified imprisonment; and
6. A free and accessible press exists as a means by which people can express their
dissatisfaction with public policies.
None of the above conditions for free and democratic elections exists in the Islamic Republic of
Iran. The constitutional law of the Islamic Republic defines the system of government as Islamic.
Believing in God and submission to Him is the rule, and the laws of the country must represent
God's will, thus fatalism. Khomeini, after the Revolution of 1979, argued that religious judges
have the "same authority" as the prophet, and disobedience to the religious judges was
disobedience to God.5 Political structure in Iran concentrates power in the hands of one person,
the Supreme religious leader. Articles 4-5 of the Iranian Constitution indicate that all civil,
criminal, financial, cultural, political, administrative, and military laws and regulations must be
based on Islamic principles. According to article 57 of the Constitution, the Supreme Leader has
the authority over legislative, executive, and judicial branches of the government. He determines
and controls the principal policies of the Islamic republic, is the commander in chief of the armed
forces, declares war and peace, he appoints chief justices, appoints and removes members of
the Guardian Council, appoints the heads of TV and Radio organizations, appoints joint chiefs of
staff, appoints the Commander of The Revolutionary Guard, appoints the Commander of the
Army and Police, and he may remove the president from office. Moreover, in the Islamic
Republic, the state owns and monopolizes power over heavy industries, foreign trade, all
minerals, banking, insurance, electric power, radio and TV, postal services, and railroads in the
country.6 The private sector in Iran is crowded out and plays an insignificant role in the
economy.
Friedrich and Brzezinski define totalitarianism (in effect dictatorial) as a political system with
these characteristics: a coercive ideology, a country led by a single person, a terrorist police
force, the monopoly of mass communications, the monopoly of armaments, and state control of
the economy. The Islamic regime in Iran possesses all of the characteristics of the dictatorial
regime, which has tried to dominate every sphere of life of individuals in the country. In the
following sections, an attempt is made to analyze the process of producing and maintaining
political power by the regime, and how the democratic opposition may use this analysis to
disarm the Islamic regime of its political power and move toward establishing a democratic
government in the country.

Foreign Policy/Relations:

The Persian Gulf States - Although the shah had been unpopular among the rulers of the six
states on the Arab side of the Persian Gulf, the Revolution in Iran, nevertheless, was a shock to
them. Iran under the shah had been the main guarantor of political stability in the region. Under
the Republic, Iran was promising to be the primary promoter of revolution. All six countries--
Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE)--were ruled by
hereditary monarchs who naturally feared the new rhetoric from Tehran. Indeed, during the first
year following the Revolution, throughout the Gulf region numerous acts of political sabotage
and violence occurred, claiming inspiration from the Iranian example. The most sensational of
these was the assault by Muslim dissidents on the Grand Mosque in the holy city of Mecca, Saudi
Arabia. Other clashes occurred between groups of local Shias and security forces in Saudi Arabia,
Kuwait, and Bahrain.

Turkey, Pakistan, and Afghanistan - Relations with Turkey and Pakistan since the Revolution
generally have been amicable and without any major issues. Before the Revolution, Iran had
joined both countries in a defensive alliance (that included Britain with the United States as an
observer), the Central Treaty Organization, and in an economic agreement, the Regional
Cooperation for Development. Iran withdrew from both agreements after the Revolution.
Nevertheless, Iran's economic ties with Pakistan and Turkey have expanded significantly. Both
countries have become important trade partners of Iran. Turkey also has become the major
transit route for goods traveling by truck and rail between Europe and Iran. The increased
volume of trade with Turkey and Pakistan has been facilitated both by their location and by the
ideology of "neither East nor West," which advocates reducing imports from the industrialized
nations in favor of importing more from Muslim and Third World countries.

Although Iran maintained diplomatic relations with Afghanistan in 1987, Iran was critical of both
the Marxist-Leninist government in Kabul and the presence of Soviet troops in the country.
Although distrustful of the ideologies of most groups, Iran's leaders generally supported the
cause of the Afghan resistance. Iran provided financial and limited military assistance to those
Afghan resistance forces whose leaders had pledged loyalty to the Iranian vision of Islamic
revolution. Iran also hosted about 2.3 million refugees who had fled Afghanistan.

Israel and the Non-Gulf Arab States- Prior to the Revolution, Iran and Israel had been de
facto allies in the Middle East. One of the very first acts of the provisional government was to
denounce that relationship and to turn over the former Israeli mission in Tehran to the Palestine
Liberation Organization. All trade with Israel was banned, especially the sale of oil. Iranian
leaders contended that Israel's existence was illegitimate, because it came about as a result of
the destruction of Palestine. Therefore, Iran advocated eradicating Israel and reconstituting
Palestine. Those Arabs who advocated compromise with Israel, such as Anwar as Sadat of Egypt,
were excoriated as traitors. In general, Iran's relations with the Arab states have been based on
perceptions of each state's relations with Israel. Thus, Iran has been hostile toward those states
it regarded as willing to accept Israel's existence--Egypt, Jordan, Morocco, and Tunisia--and
friendly toward those it regarded as sharing Iranian views--Algeria, Libya, and Syria. Despite its
uncompromising position, however, Iran is known to have purchased weapons clandestinely from
Israel as recently as 1985.

Contemporary Issue:

The Iranian Threat

The dire threat of Iran is widely recognized to be the most serious foreign policy crisis facing the
Obama administration. General Petraeus informed the Senate Committee on Armed Services in
March 2010 that "the Iranian regime is the primary state-level threat to stability" in the U.S.
Central Command area of responsibility, the Middle East and Central Asia, the primary region of
US global concerns.