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FINDING A PLACE IN LAISSEZ-FAIRE
WORLD
• Many concessions were given to foreigners
- mainly to the British and the Russians
• After WWII, Britain became the only privileged foreign power inside Iran through its predomination over Iran’s,
- oil industry
- Banking system
- Telecommunications
1872: Baron Julius de Rueter received concessions:
• Control of customs revenues
• Monopoly of railway & tramway construction
• Rights to mine minerals & metals
• Cancelled due to opposition of the ulama
1888: Caspian fisheries to Russia
1889: Imperial Bank of Persia (British)
• Issued banknotes, controlled their circulation, imported silver to mint coins
1890: Tobacco Concession to Imperial Tobacco Company:
• Monopoly over production and export of Iranian tobacco for 50 years
• 1/4th of profits/yr the Shahs
• Cancelled due to opposition of the ulama and the bazaaris
1891: Bank of Persia (Russian)
• After WWI, Iran’s debt cancelled and bank assets Iran
MODERN NATION BUILDING
Reza Shah (1926-1941)
• Infrastructure projects
- schools, hospitals, roads, railroads, bridges
• Telecommunication nationalized
• Foreign interests regulated
- UK to dominate oil industry
- USSR to become major trading partner
- Germany to assist technology
1930s:
• Russian share of Iranian exports declined: 34% to 1%
• German share of Iranian exports inclined: 20% to 40%
• State controlled 33% 40% of its exports.
KEYNESIAN APPROACH
1941-1953: 1st 12-year instability
• Foreign military presence (1941-1945)
• Azerbaijan crisis (1946)
• Supreme Planning Board (1947)
• WB denied Iran for $250 million loan (1949)
• Premiership of Mossadegh (1950-1953)
IRAN’S DEVELOPMENT PLANS
• Heavy on public sectors: infrastructure and modern industry
• Light on private sector and agriculture
The First Seven Year Plan (1949-1956)
• Never implemented
The Second Seven Year Plan (1954-1961)
• Put in place after Mossadegh
The Third Seven Year Plan (1962-1968)
• Coincided with “White Revolution”
The Fourth Seven Year Plan (1968-1973)
• Coincided with oil boom
The Fifth Plan (1973-1977)
* Planned on the basis of the oil boom but stopped in 1977
THE SHAH’S LAND REFORM
• Intended not to empower peasantry but to weaken the landlords
• Gov’t bought excess land from landlords, sold it to peasants with 30%
discount of the given market P, and peasants to pay gov’t in 25 years
with a low fixed rate loan.
• State-sponsored farm corporations, private agribusinesses
• Mechanized, capital intensive farming
• The idea was to turn peasants into agricultural entrepreneurs. But
entrepreneurs are risk takers, peasants are risk averters.
• The end result: the land reform failed. Peasants moved to the cities.
IRAN’S CLASSES Peasants: Ranjbar
• poorest social class
• lived under iqta system for centuries:
• work on land to pay tax, pay the landlord’s military salary, and pay their own expenses
Landlords: Arbab
• owned estates, properties in towns, engaged in commerce and trade, hold government positions
• invested on vaqfs (private endowments)
Clergy: ulama
• part of landowning aristocracy, own tax-exempt lands
• invested on vaqfs (religious endowments)
Merchants: bazaari
• in the absence of industry the bazaaris dominated wholesale, retail, and franchise
State:
• largest landlord, largest industrialist
Proletariat:
• small but significant
• work in oil & natural gas, mining & metal industries, construction, car factories
Middle class: petit bourgeoisie
• public & private sector employees, professionals, entrepreneurs
Upper class: grand bourgeoisie
• industrialists, factory owners, X-M businesses, heavy industry
ISLAMIC KEYNESIAN APPROACH?
1977-1989: 2nd 12-year instability
• Islamic Revolution (1977-1979)
• Decline in Oil P & flight of K (1980)
• Iran-Iraq War (1980-1988)
• Death of Khomeini (1989)
• Iranian Constitution Article 44: “Iranian economy is to consist of three
sectors: state, cooperative, and private.”
• Two main factions: conservative mercantile elites (reformist)
populist statist elites (conservative)
INFLOW OF FDI & GDP (1979-1988)
Years FDI in millions of $ GDP in billions of IR at constant P
1979 164.4 185,308
1980 80.9 157,647
1981 28.2 170,081
1982 -136.1 194,578
1983 -78.5 214,613
1984 42.7 221,751
1985 -38.2 231,047
1986 -112.4 209,454
1987 -307.6 204,882
1988 60.5 176,076
Source: UN Conference on Trade & Development (2010)
NEOLIBERAL APPROACH
1989: Rafsanjani becomes president starts his structural adjustment
program.
1990: Iraq invades Kuwait, oil P increase, Iran’s growth rate rises
1992: Iraq is defeated, oil P decrease, Iran’s growth rate declines
1995: oil P rise again, Iran’s growth recovers
1998: Asian market crisis, oil P decrease, Iran’s growth rate declines
• Sporadic strikes throughout the nation
2001: Khatami administration considers IMF Plan to cut oil subsidies
2011: Ahmadinejad government decides to implement IMF plan
INFLOW OF FDI & GDP GROWTH %
Years FDI in millions of $ GDP Growth %
1989 -19.4 3.0
1990 -362 12.1
1991 22.6 10.9
1992 8.5 5.5
1993 207.6 4.8
1994 0.3 1.6
1995 8.8 4.5
1996 20.5 5.8
1997 43.0 3.4
1998 37.6 1.6
Source: UN Conference on Trade & Development (2010)
DISTRIBUTION OF INCOME (1996)
INCOME PERCENTILES SHARE IN INCOME (%)
1 poorest 1.4
2 3.1
3 3.3
4 3.9
5 5.1
6 6.9
7 10.2
8 12.1
9 14.2
10 richest 39.8
Source: from the research conducted by the Majlis (Social Change in Iran, pg 248)
IRAN’S ELECTIONS
1989 Rafsanjani (96%) Abbas Sheibani [Freedom Mov’t] (4%)
1993 Rafsanjani (64%) Ahmad Tavakolli (24%) Abdollah Jasbi (9%)
• Split within mercantile elites between conservatives & pragmatists
1997 Khatami (69.6%) Ali Akbar Nateq-Nuri (25%)
• Split within statist elites between conservatives and reformists
• Alliance of pragmatists + reformists + leftists X statist elites
2001 Khatami (78.3%) Ahmad Tavakolli (16%)
2005 Ahmadinejad (61.7%) Rafsanjani (36%)
• Alliance of anti-conservative mercantile elites of the bazaar
2009 Ahmadinejad (64.22%) Mir Hussein Musavi (33.86%)
THE 1979 ISLAMIC REVOLUTION Failure of the Shah to Appease Class Formations
Shah Reza Pahlavi takes the Throne in 1941
• Allows political parties to form bazaar guilds, trade unions, prof. associations
• Allows parliament to elect cabinet members
1949: Beginning of Autocratic State
• Assassination attempt
• Declares martial law - takes control of government
• Repression of all political parties and opposition
Formation of The National Front in Opposition
• Joined secular intelligentsia and the religious bazaar class
Tudeh and National Front work together under Mossedegh
• Class antagonisms exposed after Shah and Britain gone
• Leads to 1953 CIA led coup
The Shah's "White Revolution" in 1963
War on petite bazaar class
• Displacement of peasant classes
• Severe repression of political groups by SAVAK
• Women's sufferage
Massive Uprisings in 1970s
WHY AN ISLAMIC REPUBLIC?
Religious Groups most successful in mobilizing the masses
• Bazaar population, shanty-town poor, industrial proletariat
The Shah crushes secular grass-roots opposition but leaves bazaar guilds, clergy, seminaries, mosques to function
• Tudeh and other secular parties decimated
• Public opposition to state converges in religious institutions
Soviet Russia and People's Republic of China support Shah
• Hurts mass appeal of Marxist Left
Clergy encouraged strikes for higher wages
• Appeals to industrial proletariat
Political left infatuated with Khomeini's anti-imperialism
• Ignores possible repressive aspects of regime
POST-REVOLUTION REVOLTS AND AN IMPOSED "CULTURAL REVOLUTION"
1979 Veil Protests
• Khomeini enforces hijab
• Middle class women revolt
• Clergy makes hijab mandatory months later
1979 Ayandengan Protests
• Khomeini orders secular newspapers closed
• Secular leftists revolt
• Clergy retreats but sends Hezbollah gangs
1980 "Cultural Revolution"
• Universities shut down for 3 years
• "Islamification" of University system
• Purges and violent suppression of political activism
• Little political activity among the masses until 1997
STUDENT MOVEMENTS 1997-1999 Role of Universities as Catalysts
• Class expansion in universities
o Brings together students of various backgrounds
• Provides resources for student movements
o Organizations, funds, information, location
• Activism of the Office of Consolidation of Unity
Election of President Khatami in 1997
• Opening of national political atmosphere
• Increased opportunities for activism
• Increased freedom of the press
Formation of New Political Culture
• Disillusionment with Islamic Republic
Movement Dies Down in 2000
• Reformist victory in parliamentary elections
o Increased suppression of political activism
THE GREEN REVOLUTION MAY-JULY 2009
Alleged Rigging of 2009 Election
• Ahmadinejad wins over Mousavi, Karroubi, and Rezai
Millions take to the streets in protest of election fraud
• Use twitter and other social media to organize
• Phase II in July: boycotts, "blitz" protests
Government Response
• Militia violence against protesters
• Mass arrests of protesters and reformist politicians
• Internet and news censorship
A Failure?
• Divided: Half want democracy, half want Khamenei
• Lacked religious "impetus" present in 1979 Revolution
• Failure to directly challenge clerical system
• Failure to define goals and objectives of movement
IRAN IMMUNE FROM THE ARAB SPRING?
Protests in February 2011
• Short-lived but shows opposition still exists
Iran as different from Egypt and Tunisia
• Military heavily aligned with Khamenei
• Fear that revolt will be more like Libya, Syria, Bahrain
Islamic Republic = Military Dictatorship
• Bassij infiltration of universities
• Ban on gatherings to grieve for the dead
• Secret prisons and torture camps
Not Pushed to the Brink?
• Oil Wealth: provides employment, food, basic services
• Prospect of regime change without revolution
o Khamenei vs. Ahmadinejad
o Fall of Assad Regime = Isolation
o Regional Isolation: Egypt, Turkey
IRAN V. IRAQ
• History of the two countries in an attempt to influence each-
other policies through transnational identities.
• Transnational Identities argument put forward by Gause shows
how every leader in the region feels threatened due to the large
amount of national/religious identities that overlap in various
countries.
• A similar overlap of identities occurs in Iran and Iraq
IRAN VS. IRAQ
• IRAN
• Total population: 73.9 million
(2010 est.) – World Bank
• Muslim 98%
• Shi’a - 89%, est. 63 million
• Sunni - 9% translates to
approx. 7 milion
• Other (includes Zoroastrian,
Jewish, Christian, and
Baha’i) 2%
• IRAQ
• Total population: 32 million
(2010 est.)
• Muslim 97%
• Shi’a - 60-65% - est. 20 million
• Sunni – 32-37% - est. 10
million
• Others.
CURRENT AFFAIRS
• Withdrawal of U.S. troops
• Iran’s ambition to influence Iraqi policies
1. Iraqi military chiefs meet with Iranian revolutionary guard on November 14, 2011
2. An offer to train Iraqi security forces?!
3. Muqtada Al-Sadr – closely tied with Iranian Revolutionary guards
4. Iran’s attempt to empower Ayatollah Mahmoud Hashemi Shahroudi, (close ally of Khomeini) and undermine Ali Al-Sistani, current Grand Ayatollah of Iraq established in holy Shi’a city of Najaf.
5. Many experts, however, believe that Al-Sistani will not be moved and it is highly unlikely that Shahroudi will be able to gain credibility in Iraq after he has been viewed as Ayatollah Khomeini's puppet by many.
IRAN V. SAUDI ARABIA
Iran Extending the Hand of Peace with a Spy up Its Sleeve
Saudi King ruling with U.S. force (puppet)
IRANIAN PLOT!!!
• U.S. Department of Justice holds Iran accountable for the plot to
kill the Saudi ambassador to the U.S.
• Gholam Shakuri, authorities claimed, was a member fo Quds
Force.
• Iran initially refused the allegations and called it an American-
Israeli “fabrication.”
• Later, Iranian authorities shifted blame towards an opposition
exile group known as Mujahedeen Khalq.
IRAN VS. SAUDI ARABIA PROXY WAR
Several ways how the two rage “battles” in foreign field
1. Saudi can back up the Sunni minority in Iran and undermine
Iranian security.
2. Iran has the same leverage where they can incite unrest among
the Shi’a oil-reach region in the Eastern Province in Saudi Arabia.
3. Iraq has also been a major tacit battleground.
a) While Iran has systematically attempted to influence Iraqi
policies through Shi’a majority, Saudis have also maintained
close ties with the Sunni leadership there.
Example: Saudi King said that they would support the Sunni minority
if the U.S. forces withdraw from Iraq in order to keep Iran at bay.
BAHRAIN!!!
• Bahrain Sunni-ruled kingdom has blamed Iran continuously about
the long-weeks Shi’a unrest.
• Saudis have openly supported the Sunni led government and
sent troops to crash the protests.
• An independent report funded by the Bahrain government did
not prove Iranian involvement in the unrest.
• The King, King Hamad Al Khalifa, ignored the findings in regards
to Iran and accused Iranian propaganda for fueling unrest in
bahrain.
IRAN’S NUCLEAR PROGRAM
• Atom’s for Peace Program under Eisenhower during 1950s
• Several deals made between the US, France, Germany and Iran
• Iran signed Non-Proliferation Treaty on July 1, 1968 as well as
Safeguards Agreement provided by the IAEA
• Relations began to sour in 1974
• Potential ambitions for nuclear weapons
• India had acquired nuclear weapons, Iran may have wanted to
compete
• Western aid was cut, so Iran asked elsewhere
• Washington blocked deals forcing Iran to disclose little
information on deals still made
• AQ Khan helped during the 1980s
• Khamenei revived projects originally planned with Germany using
Russian help
INTELLIGENCE REPORTS ON PROGRESS • Natural uranium contains 0.7 percent of the uranium-235 isotope, and
generally, light-water power reactors require enrichment levels of 3 percent to 5 percent (levels of low-enriched uranium, or LEU). Weapons-grade uranium–also known as highly-enriched uranium, or HEU–is around 90 percent (technically, HEU is any concentration over 20 percent, but weapons-grade levels are described as being in excess of 90 percent). According to the IAEA, Iran is capable of enriching to about 4.7 percent – Report from 2010
• ISIS President Albright: enough weapons-grade uranium could be achieved within a couple of months
THE NEW IAEA REPORT
• Warnings in the Weapons Annex
• Iran has failed to comply with obligations under the NPT
• IR-40 plant at Arak under IAEA Safeguards, completion in 2013
• Development of Nuclear Weapons
• Tests and experiments with undeclared nuclear material
• Alleged Studies Document, 2005
• Program Management Structure
• Physics Research Center
• AMAD Plan
• SADAT
• Nuclear Material Acquisition
• Fuel Enrichment Plant
• Pilot Fuel Enrichment Plant at Natanz
• Fordow Fuel Enrichment Plant near Qom
IAEA REPORT, CONTINUED
• Nuclear Components for an Explosive Device
• Reconversion Facilities
• Libya had similar documents
• Detonator Development, Initiation of High Explosives and
Associated Experiments
• Exploding Bridgewire Detonators
• High Explosive and Large Scale tests
• Hydrodynamic Experiments, Modeling, Missile Integration
• Simulation of implosion devices
• Development of warheads
• Environmental tests
MISSILE CAPABILITIES
• Massive military
program
• Outdated
technology
• Shahab-3
• Khalij Fars
• CBRNS
• Solid and Liquid Fuel
missiles
• Potential ICBMs by
2015
• Russian support in
ballistic development
POTENTIAL IMPACT AND IMPLICATIONS
• Nuclear weapon would tip the regional balance
• Iran does not possess the weapon, yet
• Assumptions over the possibility of proliferation
• Aging air force and conventional military
• Increased probability of warheads or covert transportation
• US has conventional superiority
• Incapable of decisive victory
• Detection mechanisms and early warning systems
• Israel should NOT strike against Iran
• Premature program could have repercussions