THE IRANIAN REVOLUTION: IMPACT ON KEY INTEREST GROUPS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP06T00412R000606400001-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 26
• Document Creation Date: December 23, 2016
• Document Release Date: May 11, 2012
• Sequence Number: 1
• Publication Date: December 1, 1986
• Content Type: REPORT

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Directorate of Secret
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Impact on Key
Interest Groups
The Iranian Revolution:
Secret
NESA 86-10048
December 1986
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Directorate of Secret
Intelligence
Impact on Key
Interest Groups
The Iranian Revolution:
This paper was prepared by
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=Office of Near Eastern and South Asian
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Analysis. It was coordinated with the Directorate
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of Operations.F
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Comments and queries are welcome and may be
directed to the Chief, Persian Gulf Division, NESA,
Secret
NESA 86-10048
December 1986
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The Iranian Revolution:
Impact on Key
Interest Groups
Key Judgments The Islamic revolution has transformed the political, social, and economic
Information available status of Iran's principal interest groups. The clergy holds the reins of
as of 15 September 1986 government for the first time in Iranian history and administers the legal
was used in this report.
and educational systems according to Islamic precepts. The clerics' rule is
based on the support of the urban and rural lower classes, and considerable
resources are devoted to maintaining their loyalty. Bazaar merchants have
regained much of the economic and political power they lost under the
previous regime. Middle-class professionals and technocrats, favored by the
Shah, have been shut out of political power. Their living standards have
eroded, and their lifestyles have changed dramatically.
Clerics dominate all key political institutions. They have extended their
power through a network of mosques, local mullahs, and revolutionary
committees. Khomeini's policies, nonetheless, have deeply divided the
clerical establishment. Radical clerics, who dominate the executive branch,
and conservative clerics, who are strong in the parliament and nongovern-
mental institutions, disagree over the proper clerical role in government,
the degree of government involvement in the economy, and the conduct of
foreign policy. After Khomeini dies, these disagreements have a good
chance of leading to open fighting among the competing clerical factions.
The urban working class has significantly improved its political and social
status and economic mobility under the new regime. The government
bureaucracy, the Revolutionary Guard, and the myriad organizations
spawned by the revolution have provided it numerous opportunities for
advancement. The regime also directs its distribution of food and necessi-
ties to this key constituency.
The regime's commitment to what Khomeini calls the "downtrodden rural
masses" has garnered strong support from farmers and peasants. The
government has involved itself extensively in the countryside to promote
agricultural self-sufficiency, stem migration to urban areas, and extend
control over this vital group. The average farmer is probably not much
better off than under the Shah, but he no longer believes he is neglected.
Secret
NESA 86-10048
December 1986
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Bazaar merchants-financiers of the revolution-oppose regime economic
policies because they believe these policies will destroy the private sector.
The bazaaris have responded by electing conservative clerics-who favor
greater freedom for the private sector-to the parliament and by organiz-
ing to lobby for their interests. The success of the bazaaris' efforts has
prompted Khomeini to endorse their concerns. The continuing deteriora-
tion of the economy and government mismanagement are likely to spur the
merchants to play an even more aggressive political role in the future. =
Middle-class professionals and technocrats have lost politically, economi-
cally, and socially under the Islamic republic. Thousands have been purged
from the government, and over 500,000 have fled Iran since the revolution.
The reality of running a modern economy and society, nonetheless, has
forced the clerics to seek the expertise of the technocrats. The technocrats
remain vulnerable and could be made scapegoats if the economic decline
generates serious unrest.
Disgruntlement with the economy is widespread among all classes, and the
populace does not have an unlimited capacity to endure shortages of
consumer goods, unemployment, and inflation. The regime will find it
increasingly difficult to maintain an adequate supply of essential goods for
its key lower-class supporters in the face of Iraqi air attacks and low oil
prices.
The urban and rural lower classes continue to support the war, but it has
taken a tremendous human and psychological toll. They constitute the rank
and file of the Revolutionary Guard and the Basij (people's militia), which
have borne the brunt of the fighting and have suffered heavy casualties. A
severe defeat or failure to make progress in the war over the next year
could undermine lower-class support and lead to instability severe enough
to require the regime to look for ways to wind down the conflict. Many con-
servative clerics, bazaaris, and most of the middle class privately oppose
the war and favor a negotiated settlement.
There is virtually no possibility that the key interest groups in Iran will
work for significant change in Iranian foreign policy while Khomeini is
alive. Radical clerics and the regime's lower-class supporters share his
hostility toward the United States, and no other group dares challenge
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Khomeini on the issue. The most pro-US group-the middle class-is also
the weakest. The conservative cleric/bazaar coalition probably desires
improved ties. Even if they gain control after Khomeini dies, however, they
would have to move cautiously to avoid radical criticism that they were
falling under the influence of the United States. Regardless of whether
radicals or conservatives control Iran, relations with the Soviet Union will
probably not improve significantly. Conservatives are hostile to the USSR,
and radicals appear to favor only a tactical improvement in ties to help the
Iranian economy and to obtain arms.
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Key Judgments
The Clergy: Ruling Interest Group
Extending Government Control
2
Urban Working Class: Pillar of the Regime
4
Working-Class Gains and Losses
5
Labor Unrest and Government Response
6
Farmers: A Harvest of Soldiers and Support
7
Attitudes Toward the Regime
8
The Bazaar Merchants: Challenging Regime Policies
9
Attitudes Toward the Regime
9
Under Siege
11
Regaining Influence
15
Clergy
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Urban Working Class
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Figure 1
Arabia
Soviet Union
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Impact on Key
Interest Groups
The Islamic revolution spawned a new political and
social order in Iran. Islam is employed as the measure
of correct political and social behavior. The clerics
have used religion to institutionalize their rule and
gain the support of the lower classes. The poor have
been exalted as the proper beneficiaries of a truly
Islamic society and have received extensive welfare
and patronage. Although most of the key social and
economic interest groups in Iran support the idea of a
government guided by Islamic principles, the deterio-
ration of the economy and the protracted war with
Iraq have eroded the regime's support and created
challenges to Khomeini's experiment in Islamic rule.
The Clergy: Ruling Interest Group
The Shah and his father-the 20th-century founder
of the Pahlavi dynasty-saw the clergy as an obstacle
to modernizing Iran and sought to reduce clerical
influence. Starting in the 1930s, the Shah's father
systematically reduced the power and privileges the
clergy had traditionally enjoyed in Iranian society.
The Shah continued the drive against the clergy,
depriving them of their central role in education and
instituting land reform and enfranchising women
despite strong clerical opposition. The Shah's modern-
ization program, his close ties to the United States,
and the growing influence of Western values in urban
Iran also antagonized the clergy. Khomeini's follow-
ers were inspired by the belief that clerics must direct
the affairs of government to correct social injustice
and the idea-articulated by Iranian theologians in
the 1960s-that Islam calls for the elimination of
inequalities of wealth and power.
Exercising Power. After the revolution, clerics took
control of all major institutions and enacted rules
reflecting the egalitarian aspirations of many of Kho-
meini's longtime supporters. A new constitution,
which took effect one year after Khomeini came to
power, established Islam as the foundation for the
country's legal and political system. It institutional-
ized the principle of rule by an outstanding Shia
Figure 2. Khomeini meeting with leader of con-
servative opposition, the late Grand Ayatollah
Shariat-Madari (center), at latter's residence in
theologian, Khomeini being the first, and empowered
a Council of Guardians to ensure that all laws passed
by the Majles (parliament) conform to Islamic crite-
ria.
Clerical leaders exercise control through a wide range
of powerful positions both within and outside the
formal government structure. They have repeatedly
purged the government bureaucracy and the armed
forces and have established review committees to
investigate and judge the revolutionary and Islamic
credentials of employees. The regime has established
a variety of new organizations, such as the Founda-
tion for the Oppressed, the Ministry of Islamic Guid-
ance, and the Revolutionary Guard, to mobilize sup-
port for the regime, ensure ideological conformity
among the populace, and provide for defense against
internal and external enemies. The court system has
been overhauled and secular judges replaced by cler-
ics with training in Islamic law. Islamic penal codes
have been written into the statute books-stonings
and amputations are regularly administered punish-
ments-and civil and commercial codes have been
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servatives on others.
There are three principal clerical groups in Iran.
Radical clerics and their lay allies dominate the
executive branch and take the initiative inform ulat-
ing policy. Conservative clerics are strong in the
Majles and dominate the Council of Guardians,
which must approve all legislation. In between is a
group we label pragmatists. Led by Majles Speaker
Rafsanjani, Iran's second-most powerful leader, the
pragmatists side with radicals on some issues, con-
The Economy. The proper degree of government con-
trol of the economy is a central point of dispute, with
radicals favoring centralized direction and conserva-
tives advocating a traditional system allowing more
freedom to the private sector.
? Foreign trade: Radicals want government control to
prevent profiteering and to regulate foreign ex-
change. Conservatives argue that government inter-
ference has created bottlenecks and inefficiencies.
? Private-sector involvement in industry. Radicals
nationalized hundreds of businesses immediately
after the revolution. Conservatives strongly defend
the right to private property. They believe national-
ization has seriously hurt the economy and will
lead to socialism.
Foreign Policy. Both sides adhere to the maxim
"neither East nor West, " a concept endorsed by
Khomeini as the foundation of Iran's foreign policy,
but each interprets it differently. For radicals it
means avoiding dependency by maintaining minimal
relations with other countries. They support "Islamic
liberation" groups, believe in violent export of the
revolution, and are anti-United States-but not pro-
Soviet. For conservatives, "neither East nor West"
means avoiding dependency by using traditional di-
plomacy to maintain a balance between East and
West. They favor expanding economic ties to the
West, are hostile to Moscow, and oppose violent
? Taxes: Radicals want a new system to provide a
reliable source of revenue and to help redistribute
wealth. Conservatives oppose a new system, believ-
ing that only traditional religious taxes paid to
clerics are consonant with Islam. Conservative cler-
ics benefit from the traditional system because it
allows wealthy merchants, who share the conserva-
tives' views, to contribute directly to them.
recast along Islamic lines. Traditional religious in-
struction again prevails in education below the univer-
sity level, and the universities-after being closed for
two years-have experienced sweeping changes in
faculty, curriculums, and entrance requirements.
Extending Government Control. To centralize govern-
ment control and stifle clerical factionalism the Kho-
meini regime has turned the religious hierarchy into
an extension of the government.
the government appoints all Friday
prayer leaders and dictates the content of Friday
sermons throughout the country. Under previous
export of the revolution.
The Role of Clerics in Politics. The conservative
clerics reject the central concept of Khomeini's view
of Islamic government: that clerics, supervised by a
supreme religious jurisprudent, must play the leading
role. in government.
Iranian regimes the Friday prayer leaders were select-
ed by their clerical peers. In some cities, Friday
prayer leaders are recognized as the highest political
authority. They act as central government representa-
tives to local officials, mediate disputes, and use their
Friday sermons to rally the populace behind govern-
ment policy. Khomeini also appoints clerics as his
personal representatives to each region of the country
to ensure that provincial officials follow central gov-
ernment policies and to provide him with a direct flow
of information about affairs throughout Iran.
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These organizations include:
? Revolutionary Guard: defends the revolution from
internal and external enemies; has become larger
and more influential than the regular Army.
? Komitehs: act as parallel local governments and
police forces; ensure compliance with Islamic
norms.
? Foundation for the Oppressed: former Pahlavi
Foundation, now dispenses aid to lower-class
Iranians.
? Revolutionary Prosecutor's Office: now confined to
handling counterrevolutionary crimes.
? Martyrs' Foundation: provides aid to families of
war victims and disabled veterans.
? Housing Foundation: provides housing for the
deprived.
? Reconstruction Jihad: builds/rebuilds infrastruc-
ture in rural areas.
? Islamic Propaganda Organization: internal and ex-
ternal oversight group.
? Literacy Jihad: active mainly in rural areas; also
handles propaganda for regime.
? Guild Affairs Committee: oversees bazaar traders
and other merchants.
? Khomeini Relief Committee: uses tithes sent to
Khomeini for "worthy" causes.
? Organization for Combating Sin: charged with
eliminating un-Islamic behavior and dress.
Local clerics and mosques throughout Iran also are
used as arms of the government. Clerics are pressed to
rally popular support for government policies, and
mosques are used to dispense social services such as
loans and subsidized food for the needy, according to
press reports. A Revolutionary Guard office is at-
tached to most urban mosques. These offices recruit
and train young men for the Basij (people's militia)
and assist local police forces.
Loyalist clerics have benefited from the regime's
efforts to take over the traditionally private system of
religious contributions. In the past, Iranian Shias
contributed to the clerics eir choice.
the Khomeini regime
has attempted to force people-especially prominent
bazaaris and other community leaders-to donate
directly to the government or to loyalist clerics,
discouraging contributions to clerical opponents of the
government.
many bazaar merchants have been harassed and
threatened with the loss of export licenses for giving to
clerics not approved by the regime.
Regime Problems. In our judgment, the clerics' ef-
forts to shape an ideal society have fallen far short of
their early vision and have eroded their popularity
even among the mainstay of their support-the urban
and rural lower classes.. Even the Iranian. press admits
that the government has failed to meet the expecta-
tions it aroused among the great majority of people
that the Islamic republic would bring significant
improvements in their lives. The war with Iraq has
forced the regime to divert resources from the econo-
my, and
mismanagement and corruption also have hampered
government policies and undermined support for the
regime.
Khomeini's policies have deeply divided Iran's clerical
community. Conservative clerics consider Khomeini's
concept of direct clerical control of government to be
heretical. They also believe efforts by radicals to
centralize government control over the economy and
redistribute property threaten the traditional social
and economic order and violate the Koranic injunc- 25X1
tion regarding the sanctity of private property. We
believe many conservative clerics oppose continuing
the war with Iraq.
The conservative clerics are part of a loose-knit
opposition coalition that has emerged as a check on
efforts by radical clerics to pass legislation that would
produce dramatic social change. The coalition has
strong representation in the Majles and includes
bazaar merchants, the regular armed forces, and
certain segments of the educated elite. The coalition
also has strong support among local clerics in Qom,
Tabriz, Mashhad, and Shiraz who share the conserva-
tive philosophy and resent the centralization of cleri-
cal authority.
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Many clerics have used their newfound political
power to enrich themselves. The belief is widespread
that one can tell a government official's power by the
size of the "commissions" he receives from bazaaris
and others involved in business. The media and visa
applicants report that bribes are necessary for every-
thing from the approval of purchase orders and
contracts to the issuance of marriage licenses. Iran's
official media have criticized the Foundation for the
Oppressed, a multibillion-dollar conglomerate of
commercial and industrial enterprises, for its inept
management and corrupt officials.
will become still more divisive.
The radical clerics are divided over reconciling their
ideological aims with economic realities. Iranian press
reports indicate that recent efforts by some in the
ruling coalition to denationalize industry and induce
expatriate technocrats and professionals to return are
coming under sharp attack from other radicals as a
betrayal of the revolution. As the regime's economic
problems worsen, policies to reinvigorate the economy
highly controversial.
Khomeini personifies the revolution for many Irani-
ans, and his death is likely to make the ruling clerics
more vulnerable. Many people are loyal to him rather
than to the kind of government he has tried to create.
Moreover, the principles the regime has been most
determined to establish-rule by a supreme jurispru-
dent and clerical control of government-remain
Urban Working Class: Pillar of the Regime
Workers in the modern industrial and construction
sectors played a pivotal role in the Shah's overthrow.
The urban labor force had grown rapidly in the post-
1973 oil boom years as rural dwellers flocked to large
Revolutionary Guard and Regular Armed Forces:
Their Role in the Regime
The Revolutionary Guard is the primary military
arm of the government and will play a key role in the
post-Khomeini period. The Guard was created be-
cause of the new regime's desire to have a loyal
armed force. Guard leaders owe their jobs to their
close relationships with senior regime leaders and
have strong ties to influential radical clerics. The
Guard has provided jobs and upward mobility for
thousands of lower-class youth. All factions of the
regime recognize that control of the Guard may be
crucial in a struggle for power after Khomeini dies
and are cultivating contacts with it.
The regular armed forces are regarded with suspicion
because of their association with the Shah and the
continued presence of Western-trained officers. Some
officers privately oppose the regime and are sympa-
thetic to conservative clerics who would like to end
the war and reduce the role of clerics in government.
The ubiquity of clerical advisers and informers in the
ranks, however, reduces the possibility of independent
political activity by the military or action by the
armed forces on behalf of any potential leader.
Moreover, because almost all regular Army units are
at the front, any power play by the regular forces
would almost certainly require the cooperation-or
neutralization-of Revolutionary Guard elements in
the capital.
cities in search of jobs created by the Shah's industri-
alization drive. Despite increased benefits and wages,
many urban workers had become disenchanted with
their lot by the beginning of 1978. Rising expectations
were stifled by the economic downturn, increased
unemployment, and worsening living conditions in
overcrowded cities. As the anti-Shah movement built
up steam in the second half of 1978, workers in
government ministries, factories, and the oil sector
walked off their jobs. The government's weakness in
the face of worker protests encouraged additional
strikes.
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Figure 3. Typical Iranian factory. Working con-
ditions are generally poor, and most factories
Food is provided through local mosques, and other
goods and services are subsidized by the government.
The Foundation for the Oppressed, which took over
assets of the Shah and his supporters, sells discounted
items to the poor.
Government make-work programs and the continued
operation of many nationalized firms even at a loss
help limit unemployment. Former Plan and Budget
Minister Taqi complained in April 1986 that "false
employment"-make-work projects-accounts for 20
percent of Iran's 12.3-million person labor force,
according to the Iranian press 25X1
many workers laid off from nationalized 25X1
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nation's oil wealth.
The foot soldiers of the revolution, however, were the
masses of poor and workers in traditional trades
inhabiting urban ghettos, especially in south Tehran.
Continuing rural migration and rising unemployment
just before the revolution expanded the numbers of
what the regime refers to as the "disinherited." The
Shah generally ignored their problems and even tried
to remove them by eradicating squatter settlements.
The urban poor were offended by the government's
secularism and by ostentatious displays of wealth by
industrialists and high government officials. They
responded enthusiastically to Khomeini's call for revo-
lution, which included a pledge to redistribute the
Working-Class Gains and Losses. The majority of
city dwellers probably have seen some improvement in
their living standards. the poor
are favored over the wealthy in education, housing,
and public services. The fervent devotion of the urban
poor to Islam, their support for the war, and their
fealty to Khomeini allow the regime to ask great
sacrifices of them. The poor believe they are the
"winners" of the revolution and willingly accept pro-
paganda blaming their ills on the war, agents of the
former Shah, and foreign-especially US-meddling.
The clerical regime has maintained its urban support
by redistributive economic programs and a strong
mosque network that reaches down to the block level.
firms continue to draw salaries. 25X1
Under the Shah, the urban poor-with no skills or
education-saw few opportunities for advancement,
but the current regime offers rewards to the loyal and
religiously devout. hundreds 25X1
of thousands of civil service jobs have been created for
the lower classes. The lower ranks have also found
substantial opportunities in the myriad revolutionary
committees controlled by clerics. These committees
have proved useful to radicals in eliminating leftwing
opponents and, in our judgment, are used to intimi-
date conservative religious and political leaders. Many
who hold important positions had little before the
revolution and thus have a large stake in the Islamic 25X1
republic's survival. The experience of Minister of the
Revolutionary Guard Mohsen Rafiq-Dust, a retainer
in the household of Majles Speaker Rafsanjani before
the revolution, is typical of many who hold important
posts in the Islamic regime.
The zeal of the disinherited to serve and even martyr
themselves in the war with Iraq is fostered both b
largess on the home front and threats 25X1
war "volunteers" are recruit- 25X1
ed through promises o gifts (promotions, raises, or
other financial incentives) and threats to take away
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jobs or be subjected to clerical harassment. Wives or
parents of war dead receive $280 a month plus $56
per child, and $118 per month is set aside for each
child until it turns 18. Families of war dead and
disabled veterans get preference in obtaining goods,
jobs, education, and travel discounts. Workers with
six months or more of war experience get preference
in promotions
The urban poor, nevertheless, must cope with severe
housing shortages caused by overcrowding in the
cities. The populations of all major cities have risen
dramatically faster than birth rates, according to
Iranian Government figures. Between 1979 and 1986,
Tehran's population more than doubled to at least 9
million-one-fifth of Iran's population. Rapid urban-
ization and its consequent social and economic diffi-
culties were major factors in the Shah's downfall. We
believe programs favoring the urban poor are respon-
sible for the increased rate of rural migration since
the revolution. Government efforts to stem the flood
of rural immigrants have foundered because of the
large gap between rural and urban incomes and the
political necessity of maintaining urban welfare pro-
grams.
Overpopulation is straining public services and in-
creasing social problems such as crime and drug
abuse. The Iranian press reports traffic problems and
air pollution in Tehran are becoming intolerable.
Gridlock is a common feature of Tehran's rush hour,
and Revolutionary Guards describe their traffic du-
ties in the capital as being nearly as dangerous as
fighting at the front. The shortage of adequate hous-
ing in major cities is acute, causing rents and property
values to soar. Regulations on land use, construction,
and sales have hampered private-sector home con-
struction and spawned widespread corruption.
Modern Industrial Sector. Industrial workers are
more dissatisfied with the economy than the rest of
the urban working class. The industrial sector has
been harder hit by import cuts than most other sectors
of the economy, idling workers and ending many of
the benefits enjoyed under the Shah. Iran depends on
imports for about 95 percent of its machine spare
parts and 75 percent of its raw materials. In 1985 war
expenditures combined with a weak oil market limited
industrial imports to about one-third of what was
needed to maintain production at prerevolutionary
levels We estimate, on
the basis of government statistics, that the fall in oil
prices at the beginning of 1986 has pushed unemploy-
ment to 30 percent. Most workers' salaries have
increased little since the revolution, despite high
inflation. In many factories deteriorating equipment is
allowed to wear out or is operated with less than
desirable maintenance, making working conditions
dangerous and uncomfortable.
The war almost certainly has added to worker resent-
ment. unions
and employers must provide quotas of Basij personnel
for duty at the front. Employees refusing to go lose
their jobs. a majority of
workers resent "volunteering" one day of work each
month without pay to the war effort.
Labor Unrest and Government Response. Dissatisfac-
tion over eroding wages and working conditions led to
strikes in large factories throughout Iran, particularly
in late 1984 and early 1985. In November 1984 the
largest strike since the revolution occurred when at
least 18,000 workers struck at the Esfahan steel
works-the largest industrial complex in Iran-to
protest working conditions and threatened layoffs,
Sympathy strikes fol-
strikes over the past two years in
most major cities including Tehran, Tabriz, and
Shiraz, and unrest in virtually every industry includ-
ing the critical oil industry. Disgruntled workers also
The government has been able to control workers
through a combination of intimidation and concilia-
tion. Strikes have frequently been met with violence
and arrests,
this has frightened many into forgoing open protests.
For example, Revolutionary Guards killed 10 demon-
strators at a rally for striking cement workers in
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wards to cultivate loyalty in workshops.
and its ability to provide promotions and other re-
Shiraz in early 1985. Leftist political parties that hope
to organize workers have been brutally suppressed.
The regime plays on widespread religious devotion
In a few cases the government has at least partly
capitulated to striking workers. The large Esfahan
strike ended with compromise by the regime after
violence and arrests failed to end the work stoppage.
In January 1985 the government agreed to oil refinery
worker demands in the face of widespread demonstra-
tions over shortages of heating fuel. Still, Khomeini
and top government officials regard strikes as coun-
25X1 terrevolutionary, and worker leaders have suffered
following successful strikes.
The regime has countered independent unions by
setting up Islamic societies and work councils run by
clerics or loyalists. These organizations ensure partici-
pation at prayers, marches, and rallies; identify coun-
terrevolutionaries; and encourage volunteers and con-
tributions for the war
councils are specifically aimed at large enterprises-
employing more than 35 workers-to "raise quality
and quantity of production and prevent acts of sabo-
tage by corrupt groups," according to the Iranian
press. Concern that the councils may become politi-
cized prompted the Labor Minister to publicly warn
the new councils that "storms caused by wrongdoing
could endanger them as well."
Established in late 1985, Islamic work
Farmers: A Harvest of Soldiers and Support
The Shah's agricultural programs did not significant-
ly improve the lot of most of the rural population, and
his policies increased the gap between rural and urban
incomes. His land reform program gave most peasants
less than they needed for subsistence, and over 1
million agricultural laborers received no land. Despite
discontent over not sharing in Iran's oil wealth-
peasant incomes in 1978 were only one-fifth of urban
worker incomes-rural dwellers by and large did not
participate in the revolution. Traditional quiescence
and a widespread cynicism about a new regime kept
farmers sitting on the sidelines until it was clear the
Figure 4. Peasants cleaning out the irrigation
ditch following expropriation of absentee owners'
Shah was out. At that point, the fervently religious
rural inhabitants embraced the Islamic republic and
its revolutionary all for economic and social equality.
Government Role. The Khomeini regime has involved
itself extensively in rural areas. This policy in part
reflects the regime's commitment to help the "down-
trodden barefoot masses," who, according to Khomei-
ni, "made this revolution and, therefore, should reap
its fruits." The government also is trying to stem
migration to urban areas, achieve agricultural self-
sufficiency, and extend its control over this vital
constituency.
The regime has adopted a variety of measures to deal
with the rural areas:
? The central government controls village politics
through cultivation councils, seven-person land dis-
tribution committees, and local spiritual leaders
who often act as government spokesmen. According
to an Iranian scholar, by January 1980 the govern-
ment had established approximately 25,000 Islamic
committees to operate in the villages.
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? A special organization-the Ministry of Construc-
tion Jihad-directs rural development. It builds
roads, provides electricity and water supply systems,
and delivers heating oil and fuel to needy villages
during the winter months. The government claims
that since the revolution, of the 40,000 to 60,000
villages in the country, about 1,500 have been
supplied with electricity and 5,500 with wells for
drinking water.
? Iranian press reports indicate that the regime also
subsidizes some farm costs and is pushing mechani-
zation to increase agricultural productivity. Last
spring the government set the minimum wage for
agricultural workers at the same level as that for
urban factory workers.
Land Reform: An Unresolved Issue. Land reform has
been one of the most hotly contested issues since the
revolution. Radicals see the issue as central to their
aspirations for a social and economic transformation
of Iranian society and have sought the redistribution
of all but the smallest farms. Conservative clerics view
radical land reform proposals as representing a viola-
tion of Islam's teaching regarding the sanctity of
private property. Land reform also has pitted peasants
and subsistence farmers, eager to gain more land,
against farmers with middle to large holdings, who
argue that the radicals' proposals would break up
assured the support of a substantial majority. The
average farmer probably is not much better off now
than under the Shah, but he is no longer ignored by
the government and, relative to other groups, proba-
bly sees himself doing well. Moreover, the old domi-
nation by a landowning elite has ended. Farmers can
keep more of their output than before and have more
direct channels for communicating their complaints to
the government.
Support for the war by rural inhabitants is one
indication of their attitude toward the regime. Ac-
cording to Iranian
press reports, Iran's villages and small towns have
provided most of the regime's recruits for the Basij.
These poorly trained troops have borne the brunt of
Iran's human wave tactics.
Satisfaction with the regime's policies is not universal
in the rural areas, however, and opposition to regime
policies appears to be growing. Press reports indicate
that in some heavily recruited rural areas there is
highly productive farms.
The depth of disagreement over land reform has
prevented the regime from implementing a compre-
hensive program. The regime, nevertheless, has found
ways to circumvent the absence of a comprehensive
land reform bill. It is distributing the approximately
100,000 hectares of land it has confiscated from
supporters of the Shah and wasteland. Interpretations
of Islamic law by senior progovernment clerics also
have allowed the government to take over some land
claimed by tribes. The Supreme Judicial Council has
instructed judges not to adjudicate claims to recover
confiscated land until new legislation is passed. Nev-
ertheless, many peasants remain landless, and many
farmers have barely enough for subsistence.
Farmers welcome assistance, but many almost cer-
tainly resent government intervention and the regi-
me's inability to close the gap between rural and
urban standards of living. An American expert on
Iran writes that "government representatives have
extensive authority to intervene in the agricultural
decisions of individual farmers." Subsidized food im-
ports have kept food prices low, and
farmers around Tabriz who have
been forced out of business by low prices blame the
government for their plight.
many farmers around Shiraz have been
brought before revolutionary courts on trumped-up
charges and punished with forfeiture of their property
by local security officials eager to become landowners.
Attitudes Toward the Regime. We believe that the
regime's highly publicized concern for the rural con-
stituency and rural dwellers' devotion to Islam have
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have significantly contributed to Iran's economic
problems, according to Iranian press reports. They
also resent the Khomeini regime's efforts to regulate
both large and small cities. These councils determine
price and rationing policies and decide on punish-
ments for violations. the 25X1
government representatives use bribery, the threat of
negative media campaigns, and their control of trade
licenses to gain compliance with regime guidelines.
They also force the bazaaris to make religious contri-
butions directly to the government or to favored
government representatives sit on bazaar councils-
ounci s in
their activities.
clerics.
Bazaari Political Reaction. The bazaaris' concern
over the government's policies has led them to work
closely with the conservative clerical opposition.
bazaaris 25X1
are a main source of financial support or conservative
clerics. This helps offset revenue losses that many
conservative clerics have suffered because the regime
has channeled religious contributions to pro overn-
ment mullahs. the 25X1
bazaaris give several hundred thousand dollars a year
to the Hojatieh Society, a focus of conservative
The Bazaar Merchants: Challenging Regime Policies
Bazaar merchants played an important part in bring-
ing the Khomeini regime to power. Threatened by the
Shah's efforts to introduce new economic policies that
undermined their traditional role and status in Irani-
an society, the bazaaris bankrolled the clerical opposi-
tion and helped rally popular support for the revolu-
tion. The closing of the Grand Bazaar in Tehran in
1978, for example, was viewed by many as a signal to
25X1 take to the streets.
Attitudes Toward the Regime. Despite initial support
for the new regime, a majority of bazaaris have
apparently been alienated by the ruling clerics' efforts
to expand government control over the private sector.
The bazaaris fear that greater government control
will lead to socialism and believe the regime's policies
opposition to regime policies.
Iranian press reports indicate that bazaaris and con-
servative clerics worked to elect conservative candi-
dates during the 1984 Majles election. Bazaaris
threatened progovernment clerics throughout Iran
with the loss of tithes and other contributions unless
they agreed to cooperate with the effort to elect
conservatives,
This effort helped produce a conservative bloc in the
Majles of about 90 members, one-third of the total
membership.
The bazaaris and their conservative allies have used
their increased strength to challenge the radicals on a
range of issues. Press reports indicate this bloc led the
Majles to reject four of radical Prime Minister Musa-
vi's Cabinet appointments in 1984, nearly forcing the
government to resign. They also headed the fight last
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The Bazaar and the Mosque in Iran
tradition.
The bazaar is the heart of the traditional Iranian
and-more important-Islamic economy. Bazaar
merchants are linked to each other and to the Shia
clergy by centuries-old family, ethnic, tribal, reli-
gious, and commercial ties. The political history of
Iran since the last century, according to Western and
Iranian historians, is essentially the relationship
between the bazaar, the clergy, and the monarchy.
The alliance between the Shia clergy and the bazaar
in Iran's revolution of 1978-79 was more than an act
of political expediency; it was an affirmation of
According to an important Iranian scholar: The
bazaar and the mosque are the two lungs of
public life in Iran. Bazaars, like mosques,
shrines, and private houses, look inward, psycho-
logically and architecturally, and more often
than not they present blank and unexplained
walls to the streets outside. Bazaars and
mosques have a public character that is the
antithesis of the privacy of houses ... For over a
thousand years the bazaar has been recognized
by Islamic law as a special arena of human life,
and in law as well as in common understanding
two men met there as `two men in the bazaar.'
In theory relations between mosque and bazaar
are friendly; in practice they sometimes face
1985 despite Khomeini's endorsement.
year against new tax legislation and refused to vote
for Musavi's reelection as prime minister in October
forming a political party to run a candidate in the
Bazaaris are also trying to form a broad-based coali-
tion of moderates and conservatives to challenge the
radicals' dominance of the executive branch. Ba-
zaaris, conservative clerics, and moderates discussed
problems. Merchants have not always liked the
justice of the mullah courts (which in turn
sometimes have depended on government for the
execution of their decrees). Some bazaaris are
patrons of forms of popular religious expression
of which some mullahs disapprove.
Nonetheless, the religious establishment and the
bazaar give each other shape and sustenance. To
be successful, especially in commercial dealings
over the long term, the merchant has needed the
capital of a good reputation as much as he has
needed material capital. If a Muslim is to have a
good reputation, he pays taxes to the mosque
and seeks the spiritual guidance of a mullah. F
Religion has lived in the bazaar independently
from the mosque. It is a natural expression of
bazaar life. The most important bazaar expres-
sion of religion is the hay'at, the association, a
small group of friends who meet regularly to
promote shared goals or, simply, to meet.
Hay'ats often meet once a week in bazaaris'
homes to hear mullahs preach. Preachers were
guests of bazaaris (a fair number of bazaar
merchants considered themselves mullahs and
dressed as such). Among the poor, both in the
city and the country ... the hay at has been
practically the only voluntary organization out-
side the mosque.
25X1
We believe these groups
share the bazaaris' desire for better ties to the West
and oppose radical proposals for land reform and
government control of the economy.
Evasion of Government Control. Government efforts 25X1
to monitor and regulate the bazaar have elicited
25X1.
creative countermeasures from the merchants. n L,;/X1
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Secret
they have created "sha-
dow" bazaar councils that set bazaar policy without
the presence of government representatives. The ba-
zaaris have responded to government efforts to insti-
tute new taxes by securing religious rulings from
senior conservative clerics that such taxes are un-
The regime also has eased its efforts to monitor
bazaari violations of price controls. The Supreme
Judicial Council announced last May that the "price
patrols" and the special price oversight board were
being disbanded because of bazaari complaints that
Islamic,
Prime Minister Musavi claimed last May that in 1985
only 3 percent of tax revenues came from self-
employed businessmen, far less than what the regime
believes should be paid.
Bazaaris also have circumvented government. controls
on prices and profits on a massive scale. Government-
supplied goods are regularly diverted to the black
market where they bring bazaaris several times the
official price many
merchants keep their expensive products in the back
of the shop to avoid detection by government moni-
tors. Wealthy customers are invited to the back to
discuss sales, and the purchases are delivered to the
customer's residence at night, often by taxi. Bazaaris
regularly pay off officials and regime clerics to avoid
their scrutiny
Prominent bazaaris have developed a "symbiotic"
relationship with local clerics, providing financial
support in exchange for noninterference or support.
Payoffs are also used to acquire foreign exchange or
to permit the sale of items banned as un-Islamic.
Government Accommodation. The bazaaris' success in
the 1984 Majles election and the deteriorating econo-
my have prompted the regime to give stronger public
and private support to bazaari concerns. Since late
1984, Khomeini's speeches have emphasized the need
to limit government interference in the private sector
and to respect the role of the bazaar in Iranian
society. More recently the regime appears to be
tailoring its economic policies to meet bazaari inter-
ests. The Iranian press reports that bazaaris now hold
seats on committees that formulate trade policy, and
last year a prominent bazaari headed a delegation to
Africa to assess economic opportunities. Iranian diplo-
matic posts have been instructed-to cooperate more
closely with bazaari commercial representatives, ac-
cording to the Iranian press.
they were hurting business.
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Middle Class: Losers of the Revolution
The Iranian middle class consists of well-educated,
largely pro-Western technocrats and professionals.
Most are civil servants or work for nationalized firms. 25X1
The middle class also includes many military officers
trained before the revolution, but not Revolutionary
Guard officers and bazaaris who have similar incomes
but have fared better since the revolution.
Middle-class professionals and technocrats who op-
posed the Shah did so for a mixture of economic,
political, and nationalistic motives. Many rediscov-
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ered national pride through Khomeini and resurgent
Islam. Civil servants, in particular, resented being
underpaid compared with the private sector. The
middle class wished to replace the Shah's regime with
a secular democratic government that they hoped to 25X1
control.) 2`25X1
Under Siege. The middle class has lost out politically,
economically, and socially under the Islamic republic.
Its brief bid for political control of the revolution
collapsed with the fall of moderate Prime Minister 25X1
Bazargan in 1980, and much of its remaining influ-
ence waned with the ouster of President Bani-Sadr in
1981. The clerical regime has- found it expedient to
condemn the middle class as elitist, anti-Islamic, and
in league with Western imperialism or Communism.
Alleged counterrevolutionaries among the middle
class are blamed for government failures. Their politi-
cians have either been driven into exile or harassed
and prevented from running for office.
The involvement of middle-class youth in the out-
lawed Islamic Marxist group, the Mujahedin-e Khalq,
has greatly heightened regime suspicion of the middle
class. Western scholars report that a large majority of
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Situation Under
the Shah
Clergy Persecuted, stripped of
privileges, power.
Urban working class Urban poor-resented
wealthy, saw no chance
to advance; opposed
Shah's antireligious poli-
cies.
Industrial workers-fa-
vored economically; hurt
by inflation; rising ex-
pectations not met.
Rural inhabitants Resented Shah's mod-
ernization and support
for large landowners;
Shah's land reform pro-
gram raised expectations
but brought little real
change.
Impact of the
Revolution
Dominate all key institu-
tions; local clerics serve
as agents of government;
government channels re-
ligious contributions to
proregime clerics.
Benefited: focus of re-
gime attention and re-
sources; greater
employment opportuni-
ties, have filled lower
ranks of civil service and
Revolutionary Guard;
regime provides welfare.
Suffered: higher unem-
ployment, declining real
wages, fewer opportuni-
ties, not allowed to orga-
nize unions. Strikes of-
ten put down brutally.
Benefited: some land re-
form, subsidies, and em-
phasis on agricultural
development; local con-
trol probably often di-
minished.
Support for the Regime
and Its Policies
Provide leadership, but
split over key issues.
Radicals-prowar, favor
clerical supervision of
government; want gov-
ernment control of econ-
omy, minimal ties to
West; support violent ex-
port of revolution.
Conservatives-private-
ly oppose war; oppose
clerical direction of gov-
ernment; favor mini-
mum government role in
economy; oppose violent
export of revolution.
Pragmatists-favor cler-
ical supervision of gov-
ernment, but on other is-
sues sometimes side with
radicals, sometimes con-
servatives.
Bulwark of support, but
war has taken heavy toll.
Support idea of Islamic
republic; resent clerical
intrusion into workplace,
declining standard of liv-
ing, working conditions.
Radicals strong in exec-
utive branch, Friday
prayer leaders, komi-
tehs, courts.
Conservatives strong in
Majles; dominate Hoja-
tieh society, which has
membership in bureau-
cracy, Army; support
among senior clerics in
Qom.
Pragmatists scattered
throughout government;
most notable are Majles
Speaker Rafsanjani,
President Khamenei.
Komitehs, Revolution-
ary Guard, Basij, Islam-
ic police, civil service.
Key supporter. Source of
recruits for war; resent
government intrusion
into local affairs.
Agricultural councils,
Basij, Revolutionary
Guard.
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An Overview of Iranian Interest Groups (continued)
Situation Under Impact of the
the Shah Revolution
Bazaar merchants Harassed, subjected to Have regained economic
onerous government reg- and political power lost
ulations, lost power to under Shah but believe
new class of capitalists. radicals' efforts to in-
crease government con-
trol of economy are
hurting bazaari inter-
ests. Have suffered from
economic decline, con-
trol of foreign exchange,
and higher taxes, though
many have reaped enor-
mous profits from black
market.
Middle-class techno- Main beneficiaries of Suffered politically, eco-
crats, professionals, and Shah; wanted democrat- nomically, socially. Poli-
civil servants is reforms, but tolerated ticians they supported
monarchy. driven into exile; purged
from government jobs,
discriminated against in
provision of goods, life-
style ostracized; 500,000
have emigrated.
the thousands executed during the regime's effort to
exterminate the Mujahedin were middle-class college
and high school students.
The middle class has probably suffered a greater
reduction in living standards than any other group.
Thousands of technocrats have been purged since the
revolution. Moreover, civil servants' salaries and bene-
fits were cut after the revolution, and they have
received only small increases since then, despite infla-
tion. as of February
1986 the purchasing power of an Iranian civil ser-
vant's income was only half what it was before the
revolution. The poor are not taxed and merchants
avoid taxes, but most civil servants have taxes auto-
matically deducted from their salaries. Thus, they
have borne a disproportionate burden of current ef-
forts to raise tax revenues. The middle class is also
Support for the Regime Institutional Roles
and Its Policies
Support idea of Islamic Well-represented in
republic; generally sup- Majles and quasi-gov-
port conservative clerics' ernmental commercial
views and cooperate with institutions.
conservatives in oppos-
ing radical policies.
Dislike regime; favor Bureaucracy, Army.
secular government,
elimination of clerics'
political influence; op-
pose war; share conser-
vative clerics' desire for
improved ties to West.
discriminated against in the provision of goods at
hours waiting in line for scarce goods or drive taxi-
cabs to supplement their incomes.
The social status and personal freedom of the middle
class have been drastically affected by the revolution:
? Vilification of wealth has made it impossible to
display expensive clothes and possessions in public.
? Religious strictures have pushed Western lifestyles
underground. Parties can be held only in private
homes and only if the local "vice squad" has been
paid off. Theater, night clubs, and drinking are
prohibited.
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Figure 6. Boutiques displaying Western-style
merchandise-a favorite of the middle-class
many National Iranian Oil Company
(NIOC) employees had embarked on a "slowdown"
out of frustration with incompetent new political
appointees as managers. This has hindered progress
on new projects and hurt production and mainte-
nance. Other forms of resistance include buying re-
stricted goods on the black market and covertly
engaging in un-Islamic activities
The middle class has staged occasional protests to
support moderate opposition movements, but fear and
lack of strength have limited such activity. Clandes-
tine radiobroadcasts from opposition leaders abroad,
such as former Prime Minister Shahpur Bakhtiar and
the Shah's son, have triggered demonstrations. In
Tehran these have been small and largely limited to
creating traffic jams-a relatively easy task given
25X1
? Job promotions and working conditions often hinge
on such factors as abjuring Western tastes in dress
and music in favor of traditional Persian styles.
and behavioral standards of a theocratic society.
Women caught not wearing proper Islamic garb in
? Educated women-beneficiaries of reforms institut-
ed by the Shah-have been pressed to return to
traditional roles and forced to conform to the dress
public are subject to fines or imprisonment.
Middle-Class Reaction: Leave or Endure. Many mid-
dle-class opponents of the regime have voted with
their feet. An estimated 500,000 have fled Iran since
the revolution. In addition, many who remain in Iran
have left their jobs in frustration or have been purged
by radicals. This has created major problems for the
Iranian economy. For example, development projects
have been delayed by a lack of skilled engineers and
construction workers, and health care has suffered
tremendously from a doctor shortage. The regime
compounded problems by closing Iran's universities,
including its only medical school, from 1980 to 1982
for fear that students might undermine the revolution.
ly. For example,
The remaining elements of the middle class constitute
a serious irritant but not a political threat to the
regime. some engage in
passive opposition such as not doing their jobs proper-
Tehran's overcrowded streets.
Opposition activity remains muted because partici-
pants fear loss of their jobs, imprisonment, or even
worse at the hands of radical revolutionary commit-
tees. Even a minor protest can bring a brutal response.
addition, much of the middle class is politically
indifferent out of despair that anything can be done.
a common sentiment is
that there will be no change until an outside force
displaces Khomeini and the top leadership.
The middle class has little enthusiasm for the war,
and many have sought to avoid military service for
themselves or their sons.
the majority of the middle class is strongly nationalis-
tic, but most believe the human and economic cost is
too great and that there is little hope of ousting the
Iraqi regime.
bribes are paid to Revolutionary Guard commanders
to falsely claim men as members of their unit, to
doctors to certify a son as unfit to fight, and to
government employees to alter education records al-
lowing students to remain in foreign schools.
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Regaining Influence. Despite its suspicions of the
technocrats, the regime has been forced to use them to
help cope with the difficulties of running a modern
economy and society. The dismal state of the econo-
my, especially the poor performance of nationalized
firms, has encouraged the clerics to yield greater
authority to their better trained nonclerical subordi-
nates. Technocrats have regained control of economic
decision making at lower levels in.many instances.
travel, and exemption from military service.
and promising access to consumer goods, foreign
To deal with economic and technical problems, the
regime is asking many of those who were purged from
their positions or who left the country to return. The
Islamic regime has set up programs to lure expatriate
technocrats by appealing to their sense of nationalism
the clerics at least grudgingly employ
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skilled technicians who refuse to adhere to such
religious strictures as noon prayers. Professional civil
servants.who left or were purged are being hired as
consultants, especially in the important oil industry,
and some businesses have been returned to former
owners who have badly needed expertise. Some facul-
ty members at universities dismissed as potential
counterrevolutionaries have been rehired.
Few expatriates have returned to Iran.
NIOC has not succeeded in
attracting ormer employees living abroad. Expatri-
ates balk at the prospect of following Islamic codes of
conduct, find salaries uncompetitive, and fear they
could not send money overseas. Occasional generous
financial incentives do little to allay fears of being
drafted or harassed by squads of young Islamic
radicals. Many fear they would not be allowed to
leave again. Present restrictions on travel, such as
requiring wives of technocrats leaving the country to
remain behind,.reinforce this notion.
Outlook
Clergy. Divisions within the ranks of the clerical
leadership will not pose a threat to the regime's hold
on power as long as Khomeini lives and can supervise
the government. Nonetheless, prolonged stalemate or
severe setbacks in the war will increase conservative
influence at the expense of the radicals. In such
circumstances, we believe conservatives would urge a
de facto cease-fire to allow Iran to rebuild its econo-
my. The conservatives also would expand economic
and commercial ties to Western Europe and Japan,
strengthen efforts to reduce Iran's diplomatic isola-
tion, and emphasize nonviolence in the export of the
revolution.
The radicals will gain in influence if Iran somehow
wins the war soon. They would try to exploit a victory
over Iraq to promote their domestic agenda, but
continuing economic problems and entrenched opposi-
tion from bazaaris and. conservative clerics would
prevent them from making much progress. To break
the impasse over major domestic issues, the radicals
would need to make major gains in the Majles and
refashion the conservative-dominated Council of
Guardians, which must decide whether legislation is 25X1
Islamic and constitutional. Even if the radicals suc-
ceed in gaining the upper hand, the poor state of the
economy will severely limit ambitious development
programs or. expensive social experimentation.
The transition to the post-Khomeini era may go
smoothly at first, but there is a good chance of
conflict among the competing factions over the longer
term. In a violent power struggle the radicals appear
to hold a considerable advantage because they can
probably count on the support of senior commanders
in the Revolutionary Guard. Although the Army is
more sympathetic to the conservatives, it has been
purged. repeatedly and is carefully supervised by
progovernment clerical advisers, and its units are at
the front, far from the capital.
Urban Working Class. In our judgment, the regime
will be able to provide the food and other basic goods
needed to maintain the support of the urban working
class. Although dissatisfaction with the economy is
increasing, the war and threats from outside enemies
will probably be. sufficient to rally the people, espe-
cially while Khomeini lives. More important, there is
no opposition group with a significant following
among the urban poor. Nevertheless, we believe a
large military defeat or lengthy deadlock could even-
tually turn Iran's working class-who provide the
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rank and file of the Revolutionary Guard-against
the war. If widespread unrest develops, it will proba-
bly begin with industrial workers who have a demon-
strated potential to mobilize large numbers quickly
across the country. Should significant unrest develop
among the urban poor, the regime would be forced to
at least stand down temporarily on the war.
Farmers. While Khomeini is alive and the war goes
well, we believe the rural constituency will generally
support the government. The government probably
cannot continue heavily subsidizing food imports, and
this will push up prices for farmers' goods. Moreover,
the regime has made agricultural self-sufficiency a
major goal and is likely to continue to devote re-
sources to the rural areas. The continued willingness
of farm laborers, peasants, and rural youth to fight in
the war will become a serious problem for the regime
in the next year if Tehran cannot show real progress
or suffers a significant defeat with massive casualties.
The majority of Iran's rural inhabitants, like the
regime's urban constituencies, are probably more
devoted to Khomeini than to the current regime. Once
Khomeini dies, the traditional desire for freedom from
central control probably will assert itself more strong-
ly, creating an irritant but not a serious threat to
government control. Rural inhabitants are not likely
to play a direct role in a post-Khomeini power strug-
gle because of their isolation.
Bazaar Merchants. The bazaaris will continue their
efforts to build political support. The Majles election
in 1988 will provide bazaaris an opportunity to in-
crease the size of the conservative bloc and possibly
even to force changes in the radical-dominated
Cabinet.
The bazaaris will come under increased attack from
radicals, however, once Khomeini is gone. We believe
Khomeini, despite his sympathy for many of the
radicals' policies, is a moderating influence because
he fears that domination by the radicals or the
conservatives would risk a civil war. After Khomeini
dies, no one is likely to have the combination of
unquestioned authority and political skills needed to
contain the radicals.
Over the longer term the bazaaris are likely to face
problems similar to those encountered under the
Shah. Once the war is over and when oil earnings
begin to recover, the regime probably will focus its
energies on modernizing and developing Iran's econo-
my, which again will force the bazaaris to compete
with technocrats and new industrialists who may
prove better able to maneuver in a less traditional
economic environment.
Middle Class. The middle class will not regain a
significant degree of political power soon. A smooth
post-Khomeini transfer of power holds the best prom-
ise for the middle class. Should radical ideologues
prevail, another middle-class exodus can be expected.
Middle-class technocrats probably will ally them-
selves with the moderate opposition coalition of con-
servative clerics and bazaaris because the conserva-
tives share the technocrats' most important political
goal: a return to secular government with clerics
playing only a supporting role. Both groups probably
would be comfortable with a government led by a
moderate such as former Prime Minister Bazargan.
Nevertheless, the alliance of technocrats and conser-
vatives would be subject to considerable frictions. The
middle class supports less clerical control over the
economy, but not less government control. In the
absence of the mullahs, the middle class would expect
to run the system.
Implications for the United States
There is virtually no possibility for significant change
in Iranian policy toward the United States during
Khomeini's lifetime. The lower classes and radical
clerics share Khomeini's deep hostility toward the
United States. The regime still uses the United States
as a bogeyman to blame for Iran's ills. The most pro-
US group-the middle class-is also the weakest. The
conservative cleric/bazaari coalition probably desires
improved ties, but, even if it gained control, it would
move cautiously to avoid criticism that it was falling
under the influence of the "Great Satan." US actions
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over the past two years, including the resumption of
relations with Iraq, probably have convinced even
conservatives that rapprochement with Washington in
the near term is unlikely and undesirable.
We believe new trade and foreign policies less hostile
to US interests will occur only if the conservatives'
influence increases. They would push to expand eco-
nomic and commercial ties to Western Europe and
Japan, strengthen efforts to reduce Iran's diplomatic
isolation, and emphasize nonviolence in the export of
the revolution. All of these measures would provide
economic benefits to the bazaaris and middle class
and suit the ideological goals of conservative clerics.
Should conservatives gain control of the government
after Khomeini dies, they probably would eventually
moderate Iran's policy toward the United States.
Regardless of who controls Iran, relations with the
USSR will probably not warm considerably. All
major interest groups harbor a profound suspicion of
Soviet motives. Conservative clerics and bazaaris are
vehemently anti-Soviet as are large segments of the
strongly nationalistic lower classes. Radical clerics
appear to favor tactical improvement in ties to help
the Iranian economy and to obtain arms. Neverthe-
less, radicals realize that their lower-class constituents
are the principal targets of recruitment by the Soviet-
backed Tudeh Party and would be wary of allowing
Moscow too much influence in Iran.
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