From the archives: Uncertain Political, Fiscal Outlook

NICOSIA, Cyprus -- Ten years after the revolution that toppled the Shah of Iran and replaced him with a government led by Islamic clerics, the Iranian people face the political and economic future with great uncertainty.

Starting today, Iran is celebrating the "10-Day Dawn," commemorating the return to Iran from exile on Feb. 1, 1979, of the Ayatollah Ruhollah Khomeini, whose position as unchallenged head of the revolution is now enshrined in the constitution.

The celebrations are to last until Feb. 11, when fireworks displays are scheduled to mark the anniversary of the collapse of the government headed by the shah's last prime minister, Shahpour Bakhtiar.

Many observers, both inside and outside Iran, consider it a remarkable achievement that the Islamic revolution has survived for 10 years, given the obstacles against it. And behind the facade of unity being mustered for the celebrations lie important divisions.

The revolution that saw so much bloodshed at the time of its birth is generating another spate of arrests and executions. Since last August, at least 1,000 people have been put to death for political offenses, according to Amnesty International, the London-based human rights monitoring group.

In the six months since a cease-fire was arranged in the eight-year war between Iran and Iraq, the failure of the two governments to reach a peace settlement has created a no-war, no-peace situation that casts a long shadow over Iran's future economic development.

Perhaps the greatest uncertainty of all is the forbidding figure of Khomeini himself, who by all accounts is the mortar that holds the revolution and the country together.

While Khomeini has survived to mock numerous predictions of his impending death, his frail health and advanced age (88 last May) suggest that he cannot continue for long to exert his unifying influence on the country.

In 1985, a council of experts named the Ayatollah Hussein Ali Montazeri, the religious leader of Qom, as Khomeini's successor and wali faqih , or supreme jurist. Montazeri has little of Khomeini's charisma or prestige.

"In the post-Khomeini period, it seems to me, the practical and real authority of the supreme jurist will decline, and the claim that the supreme jurist rules by divine sanction will be far more difficult to sustain," Shaul Bakhash, an academic authority on Iran, told a conference in London last month on the future of the Iranian revolution.

Montazeri himself confessed to a group of students in October that "I have no involvement in the policies, decisions and executive affairs of the country, and I am aloof (from them)."

Bakhash said he sensed three significant trends since the revolution: the transformation of the ruling elite; the transfer of property and wealth from private hands to the state, and the rise of a central government bureaucracy, a process that had started under Shah Mohammed Reza Pahlavi.

Divine Authority

In the last 10 years, the largely secular monarchy has been replaced by a government headed by clerics whose leader claims his mandate from divine authority through the Prophet Mohammed.

The ruling elite, formerly those around the shah, is now made up of what Bakhash calls "the children of the revolution," the dedicated young men who made careers in the Revolutionary Guards and the Komitehs, which are revolutionary committees at the local level. Most of the ministers and heads of organizations are drawn from this group. In parliamentary elections last April, more than 50% of the people elected were new to national politics.

The government has said repeatedly that its primary goal is social justice, but according to Bakhash, the revolution has transferred wealth not from rich to poor but from private to public hands. Banking, insurance and industry are now publicly owned, and the government controls more than 80% of the country's foreign trade.

The economy is the No. 1 point of contention within the government, dividing the leadership into two factions that have been called "pragmatic" and "radical," but they may represent only temporary trends.

The so-called pragmatic group, headed by Hashemi Rafsanjani, Speaker of the Parliament, appears to favor a greater role for private enterprise in the domestic economy and more foreign capital and foreign expertise in postwar reconstruction.

The other faction, headed by Prime Minister Hussein Moussavi, favors more state intervention to distribute the wealth and preaches a form of economic independence that rejects foreign involvement and relies mainly on Iran's domestic talents to exploit its resources.

Differences between these groups have led to what amounts to gridlock in government business, with the conservative Council of Guardians, a sort of Islamic supreme court, finding fault with most of the economic legislation approved by the left-leaning Parliament and sending it back to be reconsidered.

In an effort to overcome the deadlock, Khomeini resorted to a now-familiar solution: He appointed another commission of experts, the 13-member Council of Expediency, to decide disputes between the two bodies. Recently he issued a ruling trimming the power of the Council of Expediency.

Unanswered Questions

"We still have a lot of unanswered questions with regard to society," Rafsanjani admitted recently. "We still have not been able to clarify for people economic problems as befits Islam. We have differences of opinion among ourselves over these issues."

Both factions are contending for Khomeini's ear, but Khomeini appears to prefer to stand above the daily struggle, to issue statements that can be interpreted as supporting both factions.

Rafsanjani, who was appointed acting supreme commander of the armed forces last year, just weeks before the acceptance of the cease-fire with Iraq, appears to have gained the upper hand in the political infighting and is widely regarded as Khomeini's likely political heir.

Rafsanjani asked Khomeini for help when he was publicly attacked for dealing with the United States in connection with Iran's freeing of American hostages in Lebanon in return for American arms. Khomeini reportedly intervened and silenced Rafsanjani's critics.

When the cease-fire with Iraq was announced, Rafsanjani went to great pains to explain that the decision was Khomeini's and not his.

Not Immune

Despite his apparent preeminence, Rafsanjani is not immune to criticism. He faced a barrage of insults when he appointed as his military adviser Mohsen Rafighdost, who had been minister of the Revolutionary Guards until he lost his seat in the Cabinet last year amid allegations of mismanagement and the disappearance of tens of millions of dollars.

A recent Rafsanjani speech provided an illuminating example of his "pragmatic" thinking. He said the revolution must moderate its positions in order to bring about the return of more than a million Iranian expatriates.

"We have hundreds of thousands of educated people abroad," Rafsanjani said, "and if we improve conditions, if we give up some of the shortsightedness, some of our excesses and some of the crude aspects which were the requirements of the early stages of the revolution and that we have no need of nowadays, we will be able to attract them back to the country."

In a similar vein, the chief justice, the Ayatollah Abdulkarim Moussavi Ardabili, has recently joined in a demand that Iran return to the rule of law--a frank admission that the revolution has not followed the law in the past.

"There were things the judiciary overlooked," Ardabili said in a sermon at Tehran University. "However, during reconstruction we must first establish security in the country, and the establishment of security in the country means returning to the law. The law must be strictly observed."

The call for a return to the rule of law comes, paradoxically, at a time when Iranian emigre groups are complaining louder than at any time in the past about the abuse of human rights in Iran.

The opposition group known as the Moujahedeen, which is based in Iraq, says it has the names of 12,000 of its followers who have been executed since the cease-fire went into effect last August.

The small Iranian Communist party, Tudeh, has said that many of its imprisoned leaders have been executed recently. Ali Khavari, Tudeh's exiled first secretary, said:

"The violent disregard for human rights, for example, the mass execution of political prisoners without giving them a trial, is a bitter reality. We have appropriately called these executions a national tragedy."

In December, Amnesty International reported 500 confirmed executions in Iran since the end of the war last summer. And this week, Amnesty International reported to the United Nations that more than 1,000 political prisoners had been shot or hanged in Iran since last August in the biggest wave of executions there since the early 1980s. Most of those executed, the group's report said, were Moujahedeen supporters and other leftists.

Iranian officials at first denied the Western reports of executions, but then began admitting that some had taken place. They said the people involved were traitors--members of the Moujahedeen, for example. The Moujahedeen lost a great deal of support among the Iranian people when it formed an alliance with Iraq in the war and mounted a bloody invasion of Iran after Khomeini announced acceptance of the cease-fire in July.

Apart from the human rights issue, there have been increasing demands in Iran for greater freedom of speech and freedom of the press now that the special conditions of the war are over.

"The time has passed," Montazeri said recently, "when we can declare people infidel, when we can excommunicate them or when we can level various accusations at them because they declare some truths. One cannot turn back the clock. The revolution released certain forces from bondage. . . . We should not be intimidated by a climate of accusations, and we should maintain our intellectual independence."

Although the clergy was swept into power 10 years ago as part of a national desire to purge the "Westoxication" of Iranian society, some aspects of life have been liberalized. American films now appear on Iranian television, and Khomeini last year lifted his ban on the playing of musical instruments and such games as chess. But women appearing in public must still wear the enshrouding black garment known as the chador .

Much of the recent debate in Parliament and in the press has been devoted to a program of reconstruction made necessary by the war with Iraq.

Official statistics put Iranian losses in the war at 133,000 killed, 60,000 missing in action and 70,544 permanently disabled. Western estimates are higher. Financially, Iran has emerged from the war in a shattered state, but with no medium- or long-term debt. (Iraq, on the other hand, owes about $60 billion.)

Speaking of Iran's financial situation, Vahe Petrossian, a London-based authority on Iran, told the conference on Iran's revolution that the country's financial position "is enough to keep the wolves away, but not enough to carry out massive reconstruction or significantly improve the economy."

As in the past, oil is still Iran's primary source of foreign exchange. Income is expected to be about $8 billion this year, less than half of the $20 billion received as recently as 1983 and significantly below government projections.

The government's chief economic concern is inflation, now at about 40% a year. On the black market the dollar brings 12 times what it does at the official rate, but this is an improvement over the wartime rate of 20 to 1.

Because of a shortage of spare parts and raw materials, many factories are working at 20% to 40% of capacity. In Tehran, electric power is interrupted for six hours every day, and the energy minister remarked recently that the country will have to spend $1 billion a year just to keep the supply of electric power at the current level.

Oil, Petrochemicals Stressed

The highest priority in the reconstruction program has been given to oil and petrochemical production lines. The refinery at Abadan, destroyed in the war, has received several hundred million dollars and is scheduled to resume production in April. The refinery produces kerosene and gasoline, which would otherwise have to be imported.

As with all important matters in Iran, postwar reconstruction is a controversial political matter. Government leaders wrote to Khomeini for guidance, asking him to decide which ministries would have responsibility for each activity in the effort to rebuild.

"I am confident," Khomeini wrote back, "that the senior officials of the regime, the esteemed people in charge of affairs, as well as our country's loyal and revolutionary people, will as in the past never agree that this should be done at the expense of Islamic Iran becoming dependent either on the East or the West. It is religiously incumbent upon all of you to try to wipe out the last traces of the country's dependence on foreigners."


Ayatollah Ruhollah Khomeini, Iran's supreme leader, now 88; his frail health and age suggest that he cannot long continue to hold the revolution and the country together.

Ayatollah Hussein Ali Montazeri, designated successor to Khomeini as religious leader but lacking much of his charisma or prestige.

Hashemi Rafsanjani, Speaker of Parliament and leader of the "pragmatic" faction; widely regarded as Khomeini's likely political heir.

Prime Minister Hussein Moussavi, head of the "radical" faction; he favors more state intervention to distribute wealth and preaches economic independence.

February, 1979:

Ayatollah Ruhollah Khomeini, leader of Islamic revolution, returns from exile; within days, revolutionary government replaces monarchy of Shah Mohammed Reza Pahlavi.

November, 1979:

U.S. Embassy in Tehran seized by Islamic militants, American hostages captured.

September, 1980:

War with Iraq begins, stemming from old territorial dispute.

January, 1981:

American hostages freed.

November, 1985:

Ayatollah Hussein Ali Montazeri is designated Khomeini's successor as supreme religious leader.

November, 1986:

Disclosure of covert U.S. arms sales to Iran, with proceeds used to support Contra guerrillas in Nicaragua.

August, 1988:

War with Iraq ends. By official count, Iran's losses were 133,000 dead, 60,000 missing; Western estimates are higher.