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
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Social Structure
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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.
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
http://www.irandailybrief.com/2013/02/04/more-sharp-devaluation-of-iranian-currency-against-us-dollar/
http://www.usatoday.com/story/news/world/2013/04/20/iran-oil-north-korea/2098777/
http://www.haaretz.com/news/middle-east/tens-of-thousands-in-iran-protest-against-khamenei-chant-death-to-dictator-1.527893
http://www.bbc.co.uk/news/world-middle-east-22916174
- 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-22916174
Sources
- http://web.archive.org/web/20071013201114/http://www.religiousintelligence.co.uk/country/?CountryID=58
- https://www.cia.gov/library/publications/the-world-factbook/geos/ir.html
- http://www.nationsonline.org/oneworld/iran.htm#News
- http://thehill.com/blogs/global-affairs/middle-east-north-africa/301841-delisted-iranian-terror-group-mek-registers-to-lobby
- http://articles.latimes.com/2013/mar/28/world/la-fg-iraq-iran-influence-20130329
- http://www.irandailybrief.com/2013/02/04/more-sharp-devaluation-of-iranian-currency-against-us-dollar/
- http://www.usatoday.com/story/news/world/2013/04/20/iran-oil-north-korea/2098777/
- http://www.haaretz.com/news/middle-east/tens-of-thousands-in-iran-protest-against-khamenei-chant-death-to-dictator-1.527893
- http://www.bbc.co.uk/news/world-middle-east-22916174