Iran - Twenty years on: the "Islamic Republic" full steam ahead for Islamic capital

Mar 1999

For twenty years now the fundamentalist mullahs have been in power in Iran, and for twenty years what they call the "Islamic Republic" has been subjecting the Iranian population to a brutal dictatorship accompanied by the kind of social regression which, in the name of Islamic law, targets the whole of the population and women in particular.

It needs to be recalled, however, that this fundamentalist regime emerged after a period of extensive mobilisation of the poor classes against the previous dictatorship, that of the Pahlavi dynasty, whose reigning monarch, the Shah, was at that time the main regional pillar of the imperialist order. Throughout 1978, young people in Tehran and the country's main cities, quickly joined by a growing number of older people, fought with bare fists against the armed police and elite troops of the dictatorship. From the summer of 1978 onward, the working class joined the struggle using its own weapons - strikes which affected most of the country's industrial strongholds and particularly the big oil refineries in the South. This eventually led to the insurrectionary days of February 1979 when, after one provocation too many, the capital's population rose up, seizing any weapons they could find. The Shah had already taken flight and the poorer classes were left standing, arms in hand, amid the ruins of the dictatorship they had overthrown.

This victory ought to have been that of the poorer classes. But in reality they were robbed of their victory even before they had really won it. For neither during the rise of popular mobilisation nor, especially, during the crucial weeks at the beginning of 1979, did they have to guide them any political leadership prepared to embody their class interests. All groups, from the radical organisations whose activists had fought, often heroically, against the Shah's dictatorship, to those claiming to be more or less Marxist, rallied to the "sacred union" which formed behind the old opponent of the regime, the Ayatollah Khomeini. The considerable prestige which Khomeini gained from this among the poor masses then allowed him to use their victory over the Shah as a springboard to power, accompanied by the religious hierarchy of mullahs.

More precisely, the religious hierarchy sprang to the head of the Pahlavi's state apparatus. For this hierarchy, which was socially linked to the "bazaris", a reactionary caste associated with trade and small-scale production which formed the bulk of the traditional Iranian bourgeoisie, had no intention of calling into question the social order. At most, like the bazaris, they aspired to a fairer distribution of the social product amongst the various privileged layers and between these privileged layers and imperialism.

The consolidation of the Islamic dictatorship

The "Islamic Republic" which emerged from this period of agitation and intense political mobilisation in March 1979 immediately set about restoring order, not without difficulty, because the mobilisation of the poor classes continued for several more months.

The fact that the new regime succeeded in regaining control was no doubt partly due to the repressive expertise of the army and police force, which had scarcely been purged. Even the Shah's former secret police, the SAVAK, was involved - under a different name and with new figures in charge at the top, but with the same personnel.

However the regime's success was mainly due to its use of additional means which were better adapted to the explosive nature of the situation. Thus the militia of Khomeini's Islamic Revolutionary Party (the "hezbollahi") was the only one allowed to keep its weapons and it was put in charge of the most brutal operations. Various regular fundamentalist militias were also formed, the most important of which was the body of "Guardians of the Revolution" or "pasdarans", placed under Khomeini's direct authority. These militias were mainly recruited from amongst the poor population and led by clerics. They had the advantage of being more loyal than the military caste towards a regime to which they owed everything and of being more capable of controlling the population, to which they were closer. In factories and neighbourhoods, moreover, "Khomeini Committees" were set up by the clerics to control and direct the population, identify oppositionists, isolate them and plan their elimination.

In the space of a few months, the left-wing activists whose organisations had placed them in tow behind Khomeini saw the introduction of political censorship and the rise of the semi-official terror of fundamentalist thugs, before themselves being reduced to illegality, imprisoned, tortured and in many cases executed. In the meantime, the national minorities, who had believed that the overthrow of the Shah would mark a change of policy toward them, in Kurdistan among other places, very quickly discovered that the "Islamic Republic" was every bit as efficient as the Shah's regime when it came to national oppression and repression.

At the same time, however, the regime had to take into account the feelings of the poor masses - their hatred of the Iranian and foreign profiteers - if only to divert them away from any action aimed against the social order.

There was therefore talk of the "social content" of Islam, and of its opposition to usury and capitalist exploitation (mainly that of the Western corporations, in fact). Labour legislation to match the aspirations of the "Revolution" was promised - but when it materialised a long time after, it was even worse than under the Shah. And above all Khomeini took great care to maintain his image as a "defender of the deprived", as he put it. Naturally, there was a lot of rhetoric but very little action. In short, efforts were made to assure the poor that they now had no need to defend themselves against their exploiters - the clerics would see to that for them.

The imposing of the Islamic moral order became a universal remedy against all the evils suffered by the poor population and a universal response to its aspirations, but above all a weapon to force it into line. Thus the struggle against the corrupting influence of imperialism (a form of corruption held in contempt by the poor population) through a return to Islamic values was used to justify both mandatory wearing of the veil for women, decreed by Khomeini in the first weeks of the new regime, and the physical attacks of the "hezbollahi" against left-wing activists accused of spreading foreign ideas.

A fraction of the poor population probably fell for the mullahs' nonsense, for want of anything better, and they helped more or less zealously to enforce the regime's diktats. But it was also necessary for the regime to stifle aspirations and channel the anger which the poor masses as a whole had expressed in the course of the struggle to overthrow the Shah. The regime therefore strove to offer targets for this anger, in an area which presented no risk - the nationalist demagogy of anti-Americanism.

On the 4th of November 1979, Islamic student groups occupied the US embassy, taking 52 diplomats hostage, to demand the extradition of the Shah, who had taken refuge in the United States. Whether or not this move was initiated by Khomeini himself, he seized the opportunity and assumed full responsibility for it. And in the course of the 444 days of this "hostage crisis", the regime succeeded in using it to close the ranks of the population behind itself, in the name of anti-Americanism, while using this period of respite to tighten its control over the state apparatus and the whole of society. It was as a result of this situation that Khomeini had his "Islamic Constitution" adopted (although only 40% of the electorate voted). This was a reactionary text which ratified his absolute power as a supreme leader whose authority was placed above all elected bodies and institutionalised the role of the religious hierarchy in the directing of the country's affairs.

Above all, however, it was the war with Iraq which finally enabled Khomeini to consolidate his regime. The entry of the Iraqi army into Iranian territory on September 22, 1980, provoked a deep nationalist reaction. Volunteers flocked to defend what they saw as "their Revolution". Led by the pasdarans, poorly armed and often very young, these volunteers formed, alongside the regular army, an army of poor people whose ardour in combat enabled the regime to stop the Iraqi advance and then counte-attack. In the meantime, social life was militarised throughout the country. Any opposition to the war or to the regime was violently exposed as an act of treason in front of the poor masses, whose families provided the majority of volunteers and therefore of those killed in the war. In factories, strikes against the war effort were crushed. Opposition organisations became the target of brutal repression which quickly decimated their ranks. In less than two years of war, the wave of popular mobilisation and enthusiasm which had began in 1978 was finally stifled.

Dictatorship and nepotism

From the first days of the war, the religious hierarchy took over every level of the state apparatus and seized the control levers of the state-controlled economic machinery. The state controlled a considerable proportion of the economy, including 75% of big industry, owing to the confiscation of the property of the monarchy and the bourgeoisie associated with it, together with that of many foreign companies.

Being unable to appropriate this property individually, the mullahs found a way to appropriate it collectively. They formed large religious foundations which, under the cover of charitable or patriotic causes, became the administrators of full-scale economic empires enjoying numerous advantages. In particular, they did not pay any taxes and were virtually unaccountable to anyone. Thus, for example, the "Foundation of the Deprived" was endowed with the assets of 63 members of the royal family, while the "Corps of the Guardians of the Revolution" was assigned control of a large part of the war industries. Some of these foundations even succeeded in controlling the industry of entire regions, for example the Abadan region where most of the country's oil refineries are concentrated.

The caste of bazaris replaced the capitalists linked to the Shah's entourage, who had previously acted as intermediaries to the world market. But they did so with characteristic greed and all the more profitably because they were linked to the religious hierarchy. And given the legal void left by the proclamation of the Islamic Republic in many ways they were left completely free to fill their own pockets. In fact this backward caste of bazaris was content to live as a parasite and plunderer of the state-controlled sector, with the help of its religious allies.

The war effort and the inability of Iranian industry to cope with it, led to a huge increase in the import of essential and industrial goods, and even more so of arms. And of course, despite the calls for a ceasefire and economic sanctions by the imperialist powers, there was no shortage of Western gun merchants to take advantage of the windfall. The result was that in 1984, Iranian imports had already exceeded the level which pertained at the time of the Shah. This became the source of fabulous enrichment, both for the bazaris and for their protectors.

There thus developed a whole complex network of clientelism based on religious clans controlling large cities, regions and administrations, sections of the repressive machinery and the economic empires of the religious foundations. This resulted in a vast system of corruption benefiting the religious hierarchy and the bazaris. At the end of the war, a former member of Khomeini's Council of the Revolution, the economist Ezzatollah Sahobi, drew up a balance sheet of the situation, on the basis of official figures: according to him, the direct cost of the war could be estimated at 30 billion dollars, while 100 billion dollars had been "swallowed up by scandalous plundering which no doubt concealed backhanders, commissions and bribes of all sorts". And this plundering no doubt contributed at least as much, if not more than the war itself, to the disorganisation of the economy and above all the impoverishment of the population.

The religious clans which were thus formed were of course in competition with each other - for power and for the dividends of power. So long as the war went on, the iron discipline which had to be imposed on the population forced them to limit their rivalries to a silent struggle fought out behind the scenes. But as soon as hostilities ended in 1988, it took all of Khomeini's authority to prevent these rivalries from breaking out into the open.

The factional war

No doubt Khomeini was conscious of the dangers that this plundering created for the country. Just as he was conscious of the risks of demagogic overbidding by rival factions. In any event, at the beginning of 1988 he declared his intention to create a legal and constitutional framework aimed at ending the interpretations of Islamic law which served as pretexts for all kinds of scheming. At the same time, he began to prepare for his succession, starting with the elimination of his official dauphin, ayatollah Ali Montazeri. Closely linked to the radical factions of the religious hierarchy, Montazeri had denounced mass executions of political prisoners and "serious errors in the conducting of the war and other affairs of the Islamic Republic". Montazeri was placed under house-arrest and his right-hand man was executed.

Khomeini, however, did not have time to implement his reform plans any more than he had time to designate a successor. His death in June 1986 was followed by a palace revolution in the course of which Ali Khameini, the president of the Republic under Khomeini, imposed himself as his successor. He had a constitutional reform adopted which gave state bodies primacy over the religious hierarchy in the administration of public affairs - thus reinforcing the prerogatives of the faction in power - while at the same time increasing his personal power at the expense of the government. Then he had his ally Rafsanjani elected as president of the Republic. However, benefiting neither from the popularity of Khomeini nor the assent of the majority of the religious hierarchy, the Khameini-Rafsanjani tandem was seen as representing one of several factions and not as the uncontested leadership of the Islamic Republic, as had been the case for Khomeini. From then on, struggles between rival factions took centre stage and continued unabated.

The war was over, and other sources of income had to be found for the bazari profiteers. This led to the "liberalisation" turn, a move conducted cautiously because of the need to avoid any false step which might provide ammunition for rival factions.

Initially, the regime mainly encouraged imports of western consumer goods for the wealthier classes. This did not fit in very well with the strict Islam preached by Ali Khameini, but it was perfectly suited to the voracious appetite of the bazaris and certainly increased the regime's popularity among the urban petty bourgeoisie.

At the same time, those who advocated retaining wartime state control were ousted and, in June 1992, all control over private investment was abolished. There were even plans to abolish the limitation on foreign participation in local companies, which had remained set at 45% since the days of the Shah. However, partly because of the outcry this provoked and partly because of the absence of foreign investors, this proposal was left on the shelf. During the campaign for his re-election in 1993, however, President Rafsanjani felt sufficiently strong to focus his campaign on "better and more rational relations with the West" and "reinserting Iran in the concert of nations", to the great displeasure of the radical factions of the religious hierarchy.

Through this policy, Rafsanjani was expressing the avid appetite of a bourgeoisie attracted by the potential profits it could draw from a normalisation of relations with the western world and a possible influx of foreign capital. At the same time, however, there was no question, either for the bourgeoisie or for the leaders of the Islamic Republic, of calling into question the institutions set up by Khomeini, nor, above all, of relaxing the grip of the dictatorship over the poorer classes or over political opponents. This was even more out of the question as the deterioration of the living conditions of the working class, due in part to the consequences of the war and in part to the initial forward rush of "liberalisation", had provoked a wave of strikes and riots in the course of 1992.

A new step in "liberalisation"

Once re-elected as President, Rafsanjani undertook to make the country attractive for foreign capital through a brutal policy of austerity designed to reduce state debt and expenditure. State companies deemed unprofitable were closed and unemployment suddenly soared. After paying the price of the war and its consequences, and then the price of galloping inflation, the poor population was forced to pay, in advance, the cost of a wider opening up of the country to the world market.

After four years of this policy, by 1997, the economic situation of the population had worsened severely. The country's foreign debt had been considerably reduced, but inflation remained at 42% per year. Unemployment officially affected one third of the population, and those who had a job were generally obliged to have a second one or to resort to black market schemes to make ends meet. And the poor were not the only people affected. This was also true of some of the urban petty bourgeoisie, who were increasingly angered at being barred from possible careers by the monopoly position of the religious hierarchy over all positions in state and associated bodies.

Even among the bourgeoisie, which was living very well off the state, discontent was growing as a result of the disadvantages of the system of clientelism from which not everyone could profit and the bottlenecks created by the heavy bureaucratic machinery of the Islamic Republic. Above all, the aspiring young sharks of the bourgeoisie were beginning to find that the religious hierarchy's control over big industry and the public sector was a major obstacle to their ambitions. Far from decreasing with "liberalisation", the weight of religious foundations had continued to increase. Thus, in 1997, despite the closure of unprofitable factories, the "Foundation of the Deprived" controlled hundreds of companies in all areas of activity and employed 50 000 people. Taken together, the state- controlled sector and the religious foundations represented 85% of the gross national product.

However, while Rafsanjani had presented himself as a champion of liberalisation and individual initiative, he had always been very careful not to call into question the power of the economic- religious clans. Especially as his longstanding ally, Ali Khameini, was one of its symbols as the direct leader of the military- economic complex of the "Corps of Guardians of the Revolution".

At that point, some factions of the regime sought to profit from the merging discontent by adopting a modernist line and challenging, albeit cautiously, the established factions of the hierarchy. One of their spokesmen, for example, was Karbatchi, the mayor of Tehran, a former mullah who had made a career in the upper spheres of the state before moving into politics in 1990 and endeavouring to make the capital a modern business centre modelled on those in the West.

In the end, however, it was a former religious dignitary of the regime, Mohamed Khatami, who succeeded in capitalising on the general feeling of discontent. Not that Khatami's past cut him out for this role. During the war against Iraq he had been head of the Joint Command of the Armed Forces while running the propaganda machine of the war. Then, as a minister responsible for "Culture and Islamic Guidance", he had been responsible for the censorship of intellectuals. And yet these same intellectuals, especially the younger ones among them, seem to have provided Khatami with his most enthusiastic supporters. Perhaps, however, he benefited simply, and paradoxically, from the manoeuvres of the religious hierarchy which, in its pre- selection of candidates, left him standing alone against three notorious representatives of the most backward tendencies in the clergy.

In any case, the election results, and particularly the record 80% turnout, showed that a large part of the electorate had thought that this time they could use their ballot paper to express their feelings with regard to the regime and the 69% of the vote obtained by Khatami indicated their discontent quite unambiguously.

After this election, Khatami announced that his government would endeavour to "restore public liberties within the framework of the Constitution and of Islam" and would oppose "any violation of freedom and of individual rights". But he immediately added that his electors had voted for the Islamic Republic and not for civic rights - thus reducing the first part of his speech to empty rhetoric.

On the other hand, the economic "liberalisation" measures were stepped up from the moment Khatami came to power. In October of the same year, foreign oil companies were invited to take part in the exploitation of the country's terrestrial oil resources (they had previously exploited only its offshore reserves, which are more costly to extract). At the same time, three free trade zones were created, offering investors fifteen years' operation free of tax and the possibility for foreigners to export their entire profits in cash. In January 1998, the forthcoming break-up of the state's electricity monopoly was announced, along with the privatisation of the power stations and the end of state subsidies for this industry. In March, the imminent privatisation of 2400 state companies was announced. In April three petrochemical complexes were put up for sale followed in July by 48 oil exploitation and prospection contracts.

This time the hunt for foreign capital was well and truly on. The only problem was that foreign capital was slow to respond to the call. Admittedly there was no shortage of capital when it came to lending Iran the funds it needed to buy goods from abroad or for the purchase of unexploited oil concessions or prospecting rights. But more than a year after their creation, the free zones had still only found a grand total of 43 foreign investors for a total of less than $15m. As for offers to buy up privatised companies, there simply weren't any.

The twists and turns of American policy

For the Iranian regime to obtain "the reinsertion of Iran in the concert of nations", as Rafsanjani had proposed in 1993 and Khatami in 1997, i.e. in fact its recognition by imperialism as a partner in the region, both on the political and on the economic level, as in the days of the Shah, American imperialism, master of the game in the Middle East, had to agree to this. And that was a different matter.

Of course, American imperialism had not adopted a policy of systematic ostracism with respect to Iran from the moment the Islamic Republic was proclaimed. But the overthrow of the Shah had inflicted a heavy blow on American policy in the Middle East, which rested precisely on this faithful ally - a blow made all the more crushing as this overthrow was the result of a mass uprising. And while the anti-imperialist demagogy of the Islamic regime never extended to the cancellation of all the unequal treaties signed between the US and the Shah, its escalation through the hostage crisis was, for the US, an act which it could not be seen to leave unpunished. The imperialist leaders needed to hand out a reminder that they were the only real masters in this part of the world, and therefore blacklist the Iranian regime, at least for a certain time.

On the other hand, however, the coming to power of a regime practising a brutal form of anti-communism in this part of the Middle East, which was in direct contact with the Soviet Union, could only be seen favourably by Washington. Not only could the power of the mullahs reduce Soviet influence in the Middle East, but also encourage centrifugal tendencies, behind the flag of religion, in the adjacent Soviet republics. And with the consolidation of the Islamic regime, it became clear that the poor masses would be effectively contained - even more brutally than they had been by the Shah's dictatorship. So the regime had a number of characteristics which the imperialist leaders could welcome.

From these leaders' point of view, moreover, the problem of the attitude to adopt towards Iran was to a certain extent settled when the Iran-Iraq war broke out. This inflicted on the Iranian population a punishment far harsher than could have been achieved by diplomatic and economic sanctions against Iran. That is why the imperialist leaders encouraged Saddam Hussein's warmongering, and why it took the UN Security Council nearly two years to call for a ceasefire, after the Iraqi advance had been pushed back and the positions on the ground had returned more or less to the pre-war borders.

For, on the other hand, imperialism did not want this war to lead to major border changes which would have been likely to lead to all sorts of unpredictable chain reactions amongst the oppressed minorities in the region. Nor did they want a major change in the balance of power between the two countries. Besides, once the Iranian regime had got through the early part of the war, it became clear that it had its state apparatus firmly under control and that it would take a new revolutionary intervention of the masses to overthrow it. Once this was established, it became in imperialism's interests to protect this regime against an excessively crushing defeat which may have shaken it.

And thus, throughout all the years of this seemingly endless, bloody war, western arms manufacturers supplied both sides, either openly or in an underhand way. Western arms dealers were not the only ones involved, in fact, as was revealed by the Irangate scandal in 1986, when it emerged that the American secret services had sold thousands of anti-tank missiles to Iran, together with radars and spare parts for the US aircrafts bought in the past by the Shah.

After seven years of war, imperialism judged that the punishment had gone on long enough, or that the war had reached a point where it was likely to become a major source of instability in the region. This time, the imperialist leaders did not skimp on the means they employed. In application of resolution 598 of the United Nations, which demanded a ceasefire on both sides, the major powers sent their fleets into the Gulf. And it was Iran which was the main target of the American missiles. Five Iranian warships were sunk, not to mention the Iran-Air Boeing shot down "by mistake" with 290 passengers on board.

Once the war was over, the American leaders ostensibly maintained their diplomatic boycott of Iran and the ban on American companies importing Iranian oil. Even the indulgence shown by Iran in the Gulf War, by adopting a policy of neutrality rather than posing as champions of the opposition to American intervention in the Arab world, did nothing to change Washington's policy.

Behind this ostensible policy, however, American imperialism was playing a complex game. For instance, as soon as the war with Iraq was over, Iran was able to get loans from imperialism's financial bodies, such as the International Monetary Fund and the World Bank. Similarly, the USA continued to be Iran's main trading partner until 1994. While the American oil corporations could not import Iranian oil, there was nothing to stop them buying it to sell it off to other countries - in fact in 1994 they bought 30% of all the oil produced in Iran. Nor was there anything to stop American companies selling their products to Iran. It was they in particular who supplied Iran with most of the equipment and vital spare parts to increase its oil production.

From a harder line to the dropping of hints

There was nevertheless a turning point in American policy with Clinton's adoption in 1993 of the so-called "double containment" strategy. It was decided that both Iran and Iraq would have to be blacklisted and subjected to economic sanctions, and, as far as possible, prevented from becoming regional powers comparable to Iran under the Shah, before 1979.

Whether or not Clinton had intended to apply this policy to the letter, nothing concrete happened before March 1995, with his sudden decision simply to cancel a contract signed between the Iranian government and the American oil giant Conoco. At the time the administration invoked a report by the Israeli secret services claiming that the first Iranian atomic bomb would be operational within three years. But there is every reason to believe that Clinton's decision was largely motivated by party political considerations and by the Republicans' attempts to win favour with America's Jewish electorate: the fact that Clinton chose to announce his intention to extend the commercial boycott of Iran at a banquet of the World Jewish Congress was surely no coincidence.

In any case, in May 1995 a decree by Clinton forbade American companies to carry out any commercial or financial operations with Iran. Then the following year, a new law adopted by Congress decreed that any non-American company investing more than 20 million dollars per year (an amount which was doubled the following year) in Iran would be subject to American sanctions. Once again, in July 1997, a decree by Clinton reaffirmed the American blockade against Iran.

However, this change in policy by Clinton quickly led to protests among big companies in America itself, echoed by heavyweight politicians such as Zbigniew Brzezinski, former presidential adviser on national security. In an article published in July 1997, Brzezinski condemned the fact that American sanctions only isolated the US from its western allies and handicapped American companies, and he demanded the unrestricted resumption of commercial relations between America and Iran.

It was true, indeed, that the main beneficiaries of the stiffening of American policy were the big European and Japanese companies. It was the French company Total, for example, which had snapped up the contract lost by Conoco in 1995. Among the companies signing substantial contracts were British groups (Premier Oil, Shell, British Gas, GEC, Losmo), French groups (Elf, Total, Peugeot, Alsthom), Italian, German, Russian, Malaysian and even Canadian groups, but no American group, of course.

Up to now, however, this discontent on the part of big American capital has not yet caused the political leaders of American imperialism to change their attitude. It is not of course because of their stated reservations about Iran. However much Clinton calls Iran a "terrorist state", there are many other such states with which American imperialism maintains excellent relations, starting with Israel. As for "violations of human rights", Washington never complained about such acts when practised by the Shah, any more than it does today with regard to its Turkish ally.

On the other hand, the American leaders still have to find a way of reconciling a number of contradictory factors. There is the hostility of those Arab states which feel threatened by the Muslim fundamentalism inspired by the Iranian regime, and that of Israel which is worried at the recognition of a regime which enjoys real influence among Palestinians in its own territory and in Lebanon. Then there are the problems posed by the future regional balance between Iraq and Iran (Iran cannot be allowed to grow too strong with respect to a greatly weakened Iraq), and the interests of American imperialism in the face of its rivals, which demand that any normalisation should be dominated and determined solely by American economic and military power.

All of this, compounded by the personal political problems of Clinton himself, who is constantly threatened by moves to outbid him by the Republicans who dominate America's legislative bodies, no doubt contributes to the apparent wait-and-see policy of the American leaders. Thus Washington took nearly six months to reply, by the dropping of a hint by Madeline Albright, to the advances made by Khatami in January 1998 in the first interview accorded to the American channel CNN by an Iranian leader since the fall of the Shah. At that rate, the process of normalisation may drag on for a long time yet.

An explosive social situation

In Iran, meanwhile, the implementation of Khatami's reforms has inevitably led to violent resistance within the religious hierarchy itself. A whole section of the clergy and its clientele is directly threatened by the measures introduced, and even more so by the further measures they herald. The dismantling of state industries means the loss of comfortable positions and instruments of power for those who have established themselves there, and the possible loss of major profits for those who live off these industries. And this even before any one has publicly envisaged the dismantling of the foundations and other economic bodies directly controlled by the religious hierarchy.

No doubt some among this hierarchy and its clientele will find the means to hold onto their positions, or even to be among the new owners, this time in a private capacity, individually or collectively, of the privatised companies. But they will only be at best a minority. And the same goes for all the positions which the mullahs and their clientele occupy at all levels of the state apparatus and related bodies. Today the religious hierarchy still allocates these positions, but already less so than in the past and its role may not last very much longer in this respect if the forces which carried Khatami to power succeed in their implicit objective of relegating the clergy to the margins of public life.

The factions advocating the maintaining of the status quo are still a long way from being ousted from power. 1998 was marked by a long series of trials against newspapers, journalists and intellectuals for having merely elaborated on ideas already formulated by Khatami in some of his speeches. One newspaper, even though it was linked to the Ministry of Culture, had its offices firebombed and its director, himself a mullah, arrested for publishing a reader's letter critical of Khomeini. Alongside legal repression, there is increasing repression by paramilitary groups linked to the most reactionary factions of the regime. This has resulted in several murders of oppositionists, including two leaders of the Party of the Iranian Nation (a semi-legal opposition party), two journalists known to be supporters of Khatami and a doctor whose only "crime" seems to have been that he was Khatami's neighbour. And the role played in these terrorist attacks by state bodies was underlined by the arrest in January of ten secret service "operators" accused of committing some of these murders.

Yet, at present at any rate, apart from the economic reforms, Khatami's liberalisation is just rhetoric. The fine speeches about individual rights do not prevent the continuing executions of the regime's opponents nor the exactions of the pasdarans and other thugs paid by the state, while political parties remain illegal. In fact there is no guarantee that Khatami will go any further in terms of political liberalisation. The path taken by the regime on the economic level is bringing it back, more or less, to where it had been in the days of the Shah. This process could very easily be reconciled with the retention of a dictatorial regime similar to that which the country experienced at the time. In that case, Khatami would merely need to ensure that the religious factions agree to adapt to the new state of affairs - which is not necessarily impossible given that these factions do not actually aspire to a social order any different from that proposed by Khatami.

Obviously, what could transform the situation is a new intervention by the poor masses. Since 1979, the conditions for a social explosion have been accumulating. The urban population has shot up from 50 to 62 per cent of the population. It is a very young population - 65% are under 24. And while it may lack political traditions, it has been steeled by an already long experience of repression. The high level of unemployment (officially one third of the active population) conceals a state of poverty which is all the more severe because the institutions which in the early days offered a certain amount of relief to the poor, in the name of Islamic compassion, now serve only as an easy source of income for a whole bureaucracy of profiteers linked to the regime.

Since the beginning of 1998, there appears to have been an increase in strikes and demonstrations in poor neighbourhoods. These are no doubt mainly defensive strikes against layoffs, late payments of wages and low wages, or demonstrations against price rises. But given the systematic repression which the strikers have to face, they no doubt indicate a certain militancy.

What is certain is that only a direct intervention by the poor masses, and this time behind their own banner and with their own class objectives, unlike what happened in 1979, will sweep away once and for all the reactionary remnants of the "Islamic Republic" and at the same time the no less reactionary prospect of a Khatami-style "Islamic capitalism".

2 March 1999