U.S. Middle East Policy and Iran´s Politico-Economic Development (JCPA-JERUSALEM CENTER FOR PUBLIC AFFAIRS) JERUSALEM ISSUE BRIEF Vol. 3, No. 1 By Mordechai Abir 07/15/03)
Source: http://www.jcpa.org/brief/brief3-1.htm
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Iran has enjoyed a substantial windfall from oil prices, which
has more than matched its additional budgetary expenses and has
enabled it to establish a special "fund for future
generations."
The attitude of the clerical regime was
largely to be blamed for
the steady decline in Iran´s oil output from 6 million b/d in the
late 1970s to 3.5 million b/d in 2002.
Iran´s Ministry of
Petroleum is concerned that international oil
companies will prefer to invest in the development of new pro-Western
Iraq´s resources rather than in restrictive, clergy-dominated Iran.
As far as the Pentagon is concerned, there is hardly any
difference between the radical Iranian clergy who control Iran´s
policy and President Muhammad Khatami´s "so-called reformist
government."
Iran Enjoys Windfall from High Oil Prices
Iran
has enjoyed a substantial windfall from oil prices, which has
more than matched its additional budgetary expenses and has enabled
it to establish a special "fund for future generations." According to
most sources, Iran has between 80 billion and 90 billion barrels of
oil reserves. In addition, Teheran claims that Azedagan, the huge new
oil field discovered in Khuzistan (just a few miles from the Iraqi
border) about three years ago, may contain tens of billions of
barrels of oil. Teheran also claims that its Caspian region holds
about 25 billion barrels of oil or oil equivalent.
Iran´s
natural gas resources are next to those of Russia and
Turkmenistan. They consist of 812 trillion cubic feet (tcf), with 280-
500 tcf located in Iran´s South Pars field in the Persian Gulf (an
extension of Qatar´s North Field), and an additional 50 tcf in the
North Pars field.
Yet, despite high oil prices and GDP growth
of 4.3 percent in 2003,
the Islamic Revolution has failed to bring prosperity to Iran´s
largely poor population. Iranians´ standard of living has continued
to decline in recent years and the (unofficial) unemployment rate in
urban areas is estimated at about 20 percent.
Hostility Toward
Western Investment Leads to Oil Production Decline
Iran´s post-
1979 Islamic Revolution government has maintained a
hostile attitude toward foreign (particularly Western) investment in
its energy sector. The attitude of the clerical regime was largely to
be blamed for the steady decline in Iran´s oil output (6.0 million
b/d in the late 1970s, 3.5 million b/d in 2002). This policy had
begun to change by the mid-1990s, and especially after the rise to
power of President Khatami´s government in 1997.
However,
Iran´s clergy establishment continues to hamper the efforts
of Teheran´s Ministry of Petroleum to involve foreign investment in
the country´s energy resource development to this day. As a result,
for instance, the development of the huge South Pars gas field by
foreign companies is extremely slow, despite the substantial interest
in this enterprise. This, plus inferior technology and lack of spare
parts caused by the U.S. embargo (Iran-Libya Sanctions Act of 1996),
is the reason for the continuous decline of Iran´s older oil fields,
despite the output of offshore fields coming on line. For example,
Japan´s National Oil Company (JNOC), which won a buy-back agreement
for the development of the Azadegan field nearly three years ago,
still cannot implement the agreement due to obstacles emanating from
Iran´s conservative clergy.
Not surprisingly, Iran´s Ministry
of Petroleum is concerned about the
possibility that international oil companies will prefer to invest in
the development of new pro-Western Iraq´s resources rather than in
restrictive, clergy-dominated Iran. This apprehension has been
augmented recently by Washington´s increasingly aggressive anti-
Iranian policy, led by the Department of Defense. Indeed, Washington
has called upon JNOC and Shell Corporation to halt their investment
in Iranian energy in light of Teheran´s accelerated development of
nuclear weapons and alleged support of Islamic terrorism.
The
Axis of Evil
Iran is still a target in President Bush´s "axis of
evil." This has
been amplified by increasing evidence that Teheran is accelerating
its endeavors to become a nuclear power, its active opposition to
U.S. Middle East policy, and encouragement to Iraq´s Shia population
to establish a Shia-dominated theocracy rather than a U.S.-planned,
secular, democratic, pro-Western (U.S.) government in Iraq. The
possible rise of a Shia theocracy in Baghdad is a nightmare to the
Saudi-led Arab (Sunni) regimes that Washington is now wooing (on
Saudi regime importance to U.S. interests, see the interview with
Deputy Defense Secretary Wolfowitz in Vanity Fair). It also totally
contradicts U.S. plans to turn Iraq into a major (pro-Western) oil
producer (which could eventually help control OPEC) and become an
axis of America´s regional policy.
Looking Toward Regime
Change
Defense Secretary Rumsfeld and other senior Defense
Department
officials in Washington have been pushing the Bush administration to
adopt a formal policy of "regime change" concerning Iran (but not
recommending another war) instead of the present diplomatic measures
promoted by Secretary Powell. As far as the Pentagon is concerned,
there is hardly any difference between the radical Iranian clergy who
control Iran´s policy and President Muhammad Khatami´s "so-called
reformist government." In the final analysis, most leading
reformists, including Khatami himself, came from the ranks of the
radical Assembly of Combatant Clergy. Indeed, some (led by Muhtashemi-
Por) helped found the Lebanese Hizballah and are strongly opposed to
the U.S.-sponsored Palestinian-Israeli peace negotiations. The
cleavage between the left-wing socialist/democratic-
oriented "reformist" clergy and the dominant right-wing mullahs is
over the wish of the reformists to carry out socio-economic reforms
and turn Iran into an Islamic democracy, rather than a clergy
dictatorship.
Department of Defense ideologues adopted claims
by some Iran
political analysts that the failure of Khatami´s government and
parliament to reform the regime engendered the rise of a "third
force" in Iran made up of the younger generation, women, and
students. They believe that, given a push, Iran´s clergy-dominated
government would collapse "like a house of cards." However, other
scholars of Iran and foreign diplomats stationed in Teheran consider
the claims about the rise of a "third force" in Iran to be grossly
exaggerated. The non-clerical reform opposition, they claim, is
amorphous, disunited, and lacks leadership.
It is evident that,
driven by national pride, the Iranian reformers
and masses will object to any American interference in their
country´s affairs. On the matter of nuclear development, it has
already become evident that Khatami´s government is fully supportive
of the Iranian militants´ endeavors to gain nuclear capability.
Khatami´s government openly opposes U.S. efforts to solve the Israeli-
Palestinian strife as well. Indeed, President Khatami recently
visited Lebanon (hosted by its premier and Syria) and was Hizballah´s
guest of honor.
Disappointed by his total failure to implement
his reforms, President
Khatami last September submitted to parliament two bills meant to
enhance his authority. The first was to enable the president to
offset the ability of the conservative clergy´s Guardian Council
(with veto power over all laws passed by the parliament) to vet
candidates for parliamentary elections. The second was to endow the
president with authority to overrule politically motivated verdicts
of the radical clergy´s judiciary system, which have led to the
repeated closures of reform newspapers and the incarceration of their
journalists. Both bills were ratified by the parliament in the first
month of 2003. Knowing well the position of the Guardian Council,
Khatami declared that he would resign if his bills were turned down.
As expected, the two "presidential laws" were vetoed by the
Guardian
Council in April and May, respectively. Yet, neither Khatami nor his
parliamentary supporters mention his resignation threat any more.
Furthermore, the Iranian reformers are well aware that it will be
hopeless to turn to the Expediency Council, which has the power to
overrule the clergy´s veto, whose chairman is conservative former
president Rafsanjani. (www.jcpa.org. © Copyright 07/15/03)
***
Mordechai Abir is a Fellow of the Jerusalem Center for Public Affairs
and Professor (Emeritus) of Islamic and Middle Eastern Studies at the
Hebrew University of Jerusalem. His books include Saudi Arabia:
Society, Government and the Gulf Crises (1993) and Saudi Arabia in
the Oil Era: Regime and Elites: Conflict and Collaboration (1988).
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