Plagued by Military Setbacks and Economic Troubles : Iran Regime Seen Facing Worst Crisis in Years

The revolutionary government of Iran is confronting what many observers see as its worst crisis in years, plagued by military setbacks, economic problems and persistent speculation about the health of its supreme leader, the Ayatollah Ruhollah Khomeini.

Interior Minister Ali Akbar Mohtashemi, who is widely regarded as a rising star in the Iranian government and a fervent opponent of the United States, took the unusual step recently of publicly denying reports that Khomeini was seriously ill.

Mohtashemi said he had met several times with Khomeini, who is believed to be at least 87 years old, and found him to be “in perfect shape,” the official Iranian news agency IRNA reported.

But Western analysts and other experts in Iranian affairs believe that even if Khomeini has survived the latest medical crisis, as it is being called, his advanced age presents the Iranian regime with an incipient leadership crisis.

“The Iranian government is in the most delicate position it has found itself in in a very long time,” said Shireen Hunter, a former Iranian diplomat who is now with the Center for International Strategic Studies at Georgetown University in Washington. “They are in a process of reassessment. It is clear the situation cannot go on much longer.”

Many analysts believe that when Khomeini dies, there will be no immediate or dramatic change in the way Iran is governed. For one thing, the Ayatollah Hussein Ali Montazeri has been confirmed repeatedly as Khomeini’s successor in the role of Iran’s “spiritual guide.” But it remains to be seen whether Montazeri, a more controversial and less popular figure than Khomeini, can wield influence over government policy as well.

Last month, Khomeini gave a major boost to Hashemi Rafsanjani, Speaker of the Majlis, or Parliament, by naming him acting commander of the armed forces.

Rafsanjani, who is regarded as a moderate in Iran’s often-confusing political landscape, will command the nation’s regular army as well as militia units and the powerful Pasdaran, or Revolutionary Guards.

“It is hoped that this transfer of power will be the beginning of major developments on the battlefield,” Tehran Radio said.

The appointment of Rafsanjani was seen in part as a stopgap measure to ensure smooth leadership of the military in the event of Khomeini’s death, since the current commander, President Ali Khamenei, is obliged to step down this year.

Reading between the lines of the announcement, analysts have concluded that Khomeini was moving to shore up the military command in the wake of a series of major setbacks after nearly eight years of war with Iraq.

Rafsanjani was quoted as saying that “the necessary coordination was lacking between the army, the (Revolutionary) Guards corps and our other forces, and these forces were being wasted and our departments were duplicating each other,” and that “we should take the situation more seriously.”

Rather than crediting Iraq with a display of military prowess, many military analysts attribute the losses to Iranian mismanagement on the battlefield.

Another factor often cited to support the belief that there will be a relatively smooth post-Khomeini transition is the existence in Iran of institutions considered fairly democratic by regional standards. For example, the country went to the polls in April and elected a new Parliament, even while Iraqi missiles were raining down on Tehran and other cities.

The complexion of the Parliament appears to have become more hard-line, with early estimates suggesting that 170 of the 250 seats are now held by people regarded as radicals.

In the Iranian political context, the “radical” label usually applies to people who favor drastic economic reform at home--land redistribution and the nationalization of foreign trade--rather than a hard-line foreign policy.

The Majlis has approved such measures in the past, but enactment has been blocked by a Council of Elders sitting as a sort of conservative Supreme Court, which regards some of the reforms as non-Islamic. The dispute has so paralyzed the government that earlier this year Khomeini appointed a third body to resolve differences that had prevented economic reforms from being enacted.

“There is an intensified urgency to the haggling at the top,” Georgetown’s Hunter said. “As long as Khomeini is alive, they will maintain a facade of unity. Iran’s leadership is becoming more collegial. . . . They will have to rule through consensus.”

The biggest decision the Iranian government faces in the long run is how best to conduct the war. Khomeini has set the overall tone for Iran’s war policy, and many analysts doubt that his successors could do much to change it.

R. K. Ramazani, a professor of foreign policy at the University of Virginia and author of the book “Revolutionary Iran,” said in a telephone interview: “The war was launched by Iraq with the undisguised aim of toppling the Iranian revolution, and the outcome of the war and the legitimacy of the regime have become intertwined. The entire revolutionary elite has a stake in the war.”

Yet Rafsanjani, who has described the Iranian position as “no compromise, no submission and no backing down from our rights,” has recently spoken of the possibility of a non-military solution to the war.

The costs of the conflict are substantial. Most estimates suggest that Iran received about $8 billion from oil exports last year. This year’s oil revenues are estimated as low as $5 billion.

“How can you pay for a war and feed 50 million people on such a paltry income?” one analyst asked.

Prime Minister Hussein Moussavi said in a speech May 31 that Iran is only $500 million in debt, and he compared this with what he said was Iraq’s $80-billion debt.

Most observers believe that a power struggle is taking shape behind the scenes, with moderates lining up behind Rafsanjani and more radical elements supporting Mohtashemi, the interior minister.

Mohtashemi is regarded as the most extreme of the hard-line opponents to improving relations with the West in general and the United States in particular. While serving as ambassador to Syria in the early 1980s, he is believed to have directed kidnapings and bombings directed against the United States in Lebanon.

Mohtashemi has gained power by being in charge of elections and supervising governors and municipalities. He could form a powerful alliance with the radical Revolutionary Guards or the security police, and this would make him a force to be reckoned with, Western analysts believe.

“The revolution is not going to fall apart with the demise of Khomeini,” Prof. Ramazani said. “The succession is already buttoned up. I frankly doubt there will even be a shake-up in the top leadership.”