A pitched political battle is raging in Iran over control of economic policy. Radical-conservative elements in the Iranian parliament are seeking to preserve the state's dominant role in the economy. They are opposed by prominent Iranian politician, Aliakbar Hashemi Rafsanjani. Political analysts in Tehran say Rafsanjani wants to use the political dispute as a stepping stone to the presidency in 2005.
Rafsanjani is a pragmatist among Iranian conservatives and is one of giants of the Islamic republican era, having served as parliament speaker from 1980-89 and president from 1989-97. He has maintained a low political profile in recent years. However, Rafsanjani has continued to wield immense influence, operating in the shadows as the head of the Expediency Council, one of the country's unelected political oversight bodies.
Over the past two weeks, the Expediency Council has become embroiled in a bitter dispute with parliament over the privatization of state-owned assets. A hard-line faction, which has seized control of parliament's agenda, has been pushing legislation that would drastically curtail executive power and effectively retain state control over the economy. [For background see the Eurasia Insight archive]. On October 2, Rafsanjani engineered an Expediency Council decision that trumps the parliamentary effort to preserve much of Iran's current economic structure.
The Council's decision provided for changes to Article 44 of the Iranian constitution, which at present mandates that the state play a dominant role in key economic sectors. The move paves the way for privatization of inefficient enterprises, which consume a large portion of the state budget. "All major industries, manufacturing and service sectors will be ceded to the private sector in a bid to prevent the state sector from being a big employer," said a statement issued by the Expediency Council. One of the few sectors not covered by the privatization decision is broadcast and print media.
Tinkering with the constitution is highly unusual, but within the Expediency Council's prerogatives, political observers said. Supreme Leader Ayatollah Ali Khamenei has the authority to overturn the council's decision, but he is unlikely to do so, analysts added.
Prior to the council's decision, radical-conservative legislators, who seek to rekindle the revolutionary fervor that created the Islamic republic in 1979, appeared poised to seize the political high ground in Tehran. Rafsanjani's action via the Expediency Council is widely seen as having stopped the radical-conservatives' momentum. It is also being hailed by centrists and reformists as a move that could salvage Iran's economy.
"The intervention by the Expediency Council is an unprecedented decision, for revitalizing the economy," a reformist government spokesman, Abdullah Ramezanzadeh, said at an October 4 news conference.
Iranian centrists and reformists as well as influential members of the conservative establishment -- hope that large-scale privatization will help the country attract billions in foreign investment, and lead to the modernization of Iran's energy infrastructure. A retooled infrastructure could stimulate job creation, thus easing the country's crushing unemployment problem. According to some estimates, Iran will need to create at least 700,000 jobs per year in coming years just to keep pace with the growth rate of young people coming of working age.
The radical-conservatives in parliament are actively trying to discourage foreign investment, mainly by seeking to place restrictions on the government's ability to negotiate international trade deals. Outside investment, the radical-conservatives apparently believe, could undermine the Islamic republican ideals that they seem intent on restoring.
Accordingly, media outlets controlled by Iranian hardliners condemned the Expediency Council's decision. "The Expediency Council's decision on Article 44 of the Constitution is a grave mistake," said an October 10 editorial published by the ultra-conservative Jomhoori Islami newspaper. "Any modification of the Constitution by the council lacks legal legitimacy."
Meanwhile, hardliners have launched a whisper campaign designed to discourage Rafsanjani from running for president, playing up reports that the former speaker and his family members have engaged in improper business dealings.
Political analysts in Tehran say that Rafsanjani's recent maneuverings are designed to aid a bid for the presidency in 2005. In mounting his quiet campaign, Rafsanjani is attempting to cast his himself as Iran's "savior" from retrograde radical-conservatives. In keeping with his cagey political style, however, Rafsanjani is publicly adopting the stance of reluctant politician. "I am disinclined to run for office [the presidency]," he said in comments published October 9 by the Hambastegi daily. "However, if Islam and the country come under threat, I will not hesitate to rise to the occasion."
Rafsanjani's candidacy stands to gain support from Iran's managerial class, moderate conservatives and elements of the clergy and armed forces. Ironically, the realization of his presidential ambitions in 2005 may depend on reformists, who during the 1997 presidential election campaign, won by incumbent Mohammad Khatami, heaped scorn on Rafsanjani's political legacy.
Reformists now find themselves in a state of disarray, having been routed in a political battle with hardliners, culminating in the parliamentary elections last February, in which conservative elements won a dominating majority of seats. [For background see the Eurasia Insight archive]. A consensus reformist candidate for president has failed to materialize. Thus, many reformists may at least consider throwing their support behind Rafsanjani.
Reformists continue to view Rafsanjani as an unscrupulous politician, ready to sacrifice any policy position for the sake of personal political aggrandizement. Yet, at the same time, some reformists admit that he may be the "lesser evil" candidate someone more likely to steer a centrist political course. Others see him as one of Iran's few politicians with the skills needed to address not only the country's domestic political and economic turmoil, but also the mounting international crisis over Iran's nuclear program. [For additional information see the Eurasia Insight archive].
Rafsanjani at present appears the odds-on favorite to capture the election. Whether he can be effective as chief executive, however, remains uncertain. His relatively narrow political support base, combined with reformists' skepticism and the bitter radical-conservative opposition, means that he would likely face draining policy fights in the future. But as one analyst said: "Those who underestimate Heshemi's [Rafsanjani's] prodigious skills do so at their own peril."
Editor's note:
Kamal Nazer Yasin is a pseudonym for a freelance journalist specializing in Iranian affairs.
