Iran - 361Security

Country Profile: Iran

Executive Summary

Iran is currently in the process of emerging from the rule of President Ahmadinejad. The regime change holds the potential to better represent previously ostracized reformers and centrists. Although popular majority support exists for these groups, they have not yet penetrated into major government organizations, wherein corruption is widespread. Sanctions set in place by the United States and others to prevent progress in prohibited nuclear activities have weakened the fiscal and monetary structure of Iran. Significant informal market activity flourishes as Iran continues to suffer from double-digit unemployment and underemployment. Economic hardship also extends to the sharp decline in the purchasing power of the Iranian currency.

Brief History

Modern-day Iran was known as Persia until 1935. When the ruling monarchy was overthrown and its hereditary monarch exiled in 1979, Iran became an Islamist republic. Conservative clerical forces led by Ayatollah Ruhollah Khomeini established a theocratic system of government. Ultimate political authority was vested in a learned religious scholar referred to as the Supreme Leader. As written in the Iranian constitution, this individual is accountable only to the Assembly of Experts, which is a popularly elected body of clerics. Mohammad Khatami was elected President in 1997. Promising greater freedom and tolerance, he was supported mainly by women, younger voters and intellectuals. However, modernist reforms under his leadership were drastically rolled back under the regime of the next head of government, Mahmoud Ahmadinejad. His reelection in 2009 was met with controversy and spawned nationwide protests over allegations of electoral fraud.

Political Structure

Political Parties: note: formal political parties are a relatively new phenomenon in Iran and most conservatives still prefer to work through political pressure groups rather than parties; often political parties or coalitions are formed prior to elections and disbanded soon thereafter; a loose pro-reform coalition called the 2nd Khordad Front, which includes political parties as well as less formal groups and organizations, achieved considerable success in elections for the sixth Majles in early 2000; groups in the coalition included the Islamic Iran Participation Front (IIPF), Executives of Construction Party (Kargozaran), Solidarity Party, Islamic Labor Party, Mardom Salari, Mojahedin of the Islamic Revolution Organization (MIRO), and Militant Clerics Society (MCS; Ruhaniyun); the coalition participated in the seventh Majles elections in early 2004 but boycotted them after 80 incumbent reformists were disqualified; following his defeat in the 2005 presidential elections, former MCS Secretary General and sixth Majles Speaker Mehdi Karubi formed the National Trust Party; a new conservative group, Islamic Iran Developers Coalition (Abadgaran), took a leading position in the new Majles after winning a majority of the seats in February 2004; ahead of the 2008 Majles elections, traditional and hardline conservatives attempted to close ranks under the United Front of Principlists and the Broad Popular Coalition of Principlists; several reformist groups, such as the MIRO and the IIPF, also came together as a reformist coalition in advance of the 2008 Majles elections; the IIPF has repeatedly complained that the overwhelming majority of its candidates were unfairly disqualified from the 2008 elections.

Political System: Iran is a theocratic republic with a unicameral legislature, the Islamic Consultative Assembly (also referred to as the Majles). Members of this body are elected by popular vote from districts to serve four-year terms. This legislature is responsible for approving the cabinet (The Council of Ministers) members selected by the president, who acts as the head of government. The chief of state is the supreme leader, currently Ali Hoseini-Khamenei. The supreme leader is elected by a popularly elected oversight body, the Assembly of Experts. While the supreme leader is elected for life, the state’s president is elected by a separate popular vote for a four-year term.

Political Conflicts: The reelection of President Ahmadinejad in 2009 initiated an enormous uprising of demonstrators across the state who thought the integrity of the election was compromised. In mid-February 2011, opposition activists conducted the largest rallies against the federal administration since December 2009, spurred by the success of uprisings in Tunisia and Egypt. Estimates place turnout of protesters in the tens of thousands. The deployment of heavy security forces discouraged protests that followed in the next month. The arrival of the next presidential election in June 2013 brought with it the return of massive protests. Marches in quantities matching or exceeding turnout in 2011 took place, with chants calling for death to Ayatollah Khamenei.

Economic Structure

Economic System: The direction of Iran’s economy can be traced to policies prescribed by the state, and is a reaction to international sanctions as well. Characteristic of states in its region, Iran depends largely on oil to deliver revenue to the government. The economy is severely lacking a dynamic private sector. Responsible for this are strict state price controls and subsidies. A vacuum of private sector growth exists, save for small-scale workshops, farming, some manufacturing, and services.

Economic Trends: In December 2010, the Majles passed President Ahmadinejad’s Targeted Subsidies Law. With the aim of reducing state subsidies on food and energy, this was the most extensive economic reform since the government implemented gasoline rationing in 2007. Recently, Iran’s vital oil revenue has declined in response to international sanctions that have placed new fiscal and monetary constraints on the state.

Economic Resources: Industrial output includes petroleum, petrochemicals, fertilizers, textiles, cement and other construction materials, and armaments. Exports are 80% petroleum, and the remainder consist of chemical and petrochemical products, fruits and nuts, and carpets.

Social Structure

Religion:

Muslim: 67,038,717 adherents (99.02% of population)
Baha’i: 352,051 adherents (0.52% of population)
Christian: 220,000 adherents (0.33% of population)
Other: 67,702 adherents (0.10% of population)
Jewish: 25,000 adherents (0.03% of population)
Churches: Armenian Orthodox (72,368 members)
Church of the East (Nestor) (7,692 members)
Catholic (4,000 members)
Evangelical (Presbyterian) (1,703 members)
Assemblies of God (1,400 members)
Episcopal (480 members)
Other denominations (6,000 members)

Ethnicity:

Persian 61%
Azeri 16%
Kurd 10%
Lur 6%
Baloch 2%
Arab 2%
Turkmen and Turkic tribes 2%
Other 1%

Gender:

Overall male population: 40,516,559 (50.7%)
Overall female population: 39,337,341 (49.3%)
0-14 years: 23.8% (male 9,733,762/female 9,251,929)
15-24 years: 19.8% (male 8,116,169/female 7,671,139)
25-54 years: 45.3% (male 18,380,525/female 17,766,409)
55-64 years: 6.1% (male 2,383,360/female 2,472,140)
65 years and over: 5.1% (male 1,902,743/female 2,175,724) (2013 est.)

Urbanization:

Urban population: 71% of total population (2010)
Rate of urbanization: 1.9% annual rate of change (2010-15 est.)
Children under the age of 5 underweight: 4.6% (2004)

Operating Organizations

Political Groups:

Groups that generally support the Islamic Republic: Ansar-e Hizballah-; Followers of the Line of the Imam and the Leader; Islamic Coalition Party (Motalefeh); Islamic Engineers Society; Tehran Militant Clergy Association (MCA; Ruhaniyat)
Active pro-reform student group: Office of Strengthening Unity (OSU)
Opposition groups: Freedom Movement of Iran; Green Path movement [Mehdi KARUBI, Mir-Hosein MUSAVI]; Marz-e Por Gohar; National Front; various ethnic and monarchist organizations
Armed political groups repressed by the government: Democratic Party of Iranian Kurdistan (KDPI); Jundallah; Komala; Mojahedin-e Khalq Organization (MEK or MKO); People's Fedayeen; People's Free Life Party of Kurdistan (PJAK)

Terrorist Groups:

Delisted as a terror organization by the U.S. State department in 2012 , the Mujahedin-e-Khalq (MEK) has since formally registered to become a U.S. lobbying organization.

Allies and Enemies

Regional Allies: Iraq, Lebanon, Palestine, Syria
Regional Enemies: Israel
Global Allies: China, North Korea, Russia, Venezuela
Global Enemies: United States

Country Trajectory

In order to prevent Iran’s educated youth from searching for employment overseas, unemployment and underemployment levels must be brought down. International sanctions on the Central Bank of Iran also expose limited options for the state to refurbish an unappealing job market. An effort to decrease the money supply by the central bank could perhaps limit the inflation that has lessened the value of individual incomes. Beyond that, however, quantitative easing appears unlikely to generate more business lending. In turn, investments from private firms cannot be relied on to raise employment levels. As economic growth turns negative for the first time in two decades, loosening restrictions on private enterprises could not be more necessary.

Rapidly dwindling public support for the regime of Ahmadinejad and Ayatollah Khamenei made orchestrating an election akin to 2009 unfeasible. The diminishing influence of these figures was exacerbated by tight sanctions levied by the United States. The resulting shock that hit the Iranian economy saw the working class, formerly core supporters of Khamenei and Ahmadinejad, switching allegiance. The election of a more moderate president in June 2013, Hassan Rouhani, provides hope that reformist measures can be instituted. Optimism should be cautious, though, as former President Khatami faced a stiff legislative opposition that is still in place during his own attempts at reform. Rouhani has expressed interest in engaging in direct high level talks with the United States. These negotiations are essential to lifting the sanctions imposed upon the state. If removed, robust trade with foreign states could be restored, returning jobs and staving off crippling inflation.

Current Events

February 4th, 2013: Within only a two week period, the Iranian currency was devalued over 20% against the U.S. dollar.

http://www.irandailybrief.com/2013/02/04/more-sharp-devaluation-of-iranian-currency-against-us-dollar/

April 20th, 2013: Iran's oil ministry says the country is considering exporting oil to North Korea as a way to improve its battered economy. Deflating concerns over this partnership, Iran has denied a U.N. report saying the two have exchanged ballistic missiles, components and technology in violation of U.N. sanctions.

http://www.usatoday.com/story/news/world/2013/04/20/iran-oil-north-korea/2098777/

June 5th, 2013: A funeral of a senior dissident cleric turned into biggest anti-government protest in years. Tens of thousands of protesters chanted slogans against the government and the supreme leader, Ayatollah Ali Khamenei, calling for the "death to the dictator."

http://www.haaretz.com/news/middle-east/tens-of-thousands-in-iran-protest-against-khamenei-chant-death-to-dictator-1.527893

June 15th, 2013: Reformist-backed cleric Hassan Rouhani has won Iran's presidential election, securing just over 50% of the vote and so avoiding the need for a run-off. Crowds gathered in Tehran to hail Mr Rouhani, shouting, "Long live reform, long live Rouhani."

http://www.bbc.co.uk/news/world-middle-east-2291617 4

Sources