Khamenei: A Bigger Threat than Washington to Iran

Ayatollah Ali Khamenei's foreign and economic policies are a bigger threat than Washington to Iran: "Iran Enters The Liberalism Era," Iran Press Service, 3 July 2006; and Karl Vick, "Ayatollah's Moves Hint Iran Wants To Engage: Supreme Leader Sets Course for WTO Membership," Washington Post, 5 July 2006, A10. Khamenei created the Strategic Council for Foreign Relations, a new organ that directly answers to him and that is "chaired by Mr. Kamal Kharrazi, the reformist Foreign Affairs minister of the former moderate president Mohammad Khatami," and issued a directive to privatize 80% of major state enterprises. As Iran Press Service and the Washington Post correctly observe, both moves are meant to check Mahmoud Ahmadinejad, who has come to overshadow Khamenei and other clerical gerontocrats and representatives of bazaari interests in the minds of the economically disenfranchised in Iran.

The drive toward privatization in Iran is not new. The first decade of the Islamic Republic set up what might be called an Islamic welfare state, but the welfare state has been steadily chipped away since the beginning of the Rafsanjani years, and the ascendancy of neoliberal reformists during the Khatami era accelerated the attack on it, which culminated in the Iranian parliament's amendments of Articles 43 and 44 of the Iranian Constitution in 2004. It is true that, in contrast to the most radical neoliberals in Iran and the West, Khamenei and his allied clerics were a little more wary of destroying the welfare state (without which, after all, support for the clerical rule may completely melt down) too rapidly, but the neolibeal reforms during the Rafsanjani and Khatami administrations, as well as the constitutional amendments, would not have happened without Khamenei's support for them.

However, Western imperialism and its manufactured "crisis" over Iran's nuclear technology development postponed the domestic class conflict (or, more precisely, a political faction fight rooted in class contradiction, which is fought very subtly), for Washington never made clear to Khamenei that it would make a deal with him. It still hasn't, but Khamenei wants to make sure that Ahmadinejad will not displace him and demote clerical rule through passive revolution, so Khamenei has taken chances.

Ahmadinejad is not without resources. The day after Khamenei's announcement of privatization, the President submitted a plan that is intended to moderate its radical character:

Supreme Leader of the Islamic Revolution Ayatollah Seyed Ali Khamenei on Monday accepted a request from President Mahmoud Ahmadinejad to cede 50 percent of shares of state-run enterprises by installment to provincial investment cooperatives and the two lowest-level income groups of the society.

The Supreme Leader issued executive order for privatization drive on Sunday in line with Article 44 of the Constitution and said that the plan will help speed up economic development, social justice and elimination of poverty.

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The Supreme Leader made it clear that share prices should be determined in the Stock Exchange and the two lowest level income groups in the poverty line would be given 50 percent discount and their payment should be made on a 10-year installment. ("Supreme Leader Accepts President's Request on Privatization," IRNA, 3 July 2006)

But that will only slow down the process of privatization, for the poor and provincial cooperatives who get the shares will be allowed to sell them on the market after four years as it is currently planned (and they will, on terms disadvantageous to them).

In that intervening period, it may be possible, however, for the masses to push Ahmadinejad to modify the plan further (e.g., prohibiting the sale of shares).

Besides, the conflict with the West will also slow things down. The Washington power elite, both Republican and Democrat, tend to be keener on ideology and geopolitics than economics per se when it comes to Iran in particular and the Middle East in general (unlike their relatively flexible attitude toward China), so Khamenei's WTO dream may not come about in any case.