Iran Report: February 28, 2000

PUBLIC EXPECTATIONS HIGH FOR REFORMIST VICTORS. Many Iranian publications greeted the reformist gains in the parliamentary election with pleasure, but already, questions are being asked what the new parliament's plans for the future will be. So far, all indications are that there is no plan. But as many incumbents learned on 18 February, failure to meet public expectations could have serious repercussions.

"Kar va Kargar," linked with the reformist Labor House, said on 20 February that this was the second lesson, the first being Hojatoleslam Mohammad Khatami's election in May 1997. Its 22 February issue reported that by their participation, people had shown that they want changes within a legal and constitutional framework. Parliamentarian Hashem Aghajari told the 22 February "Ham-Mihan"-- Executives of Construction Party General-Secretary Gholamhussein Karbaschi's new daily--that the 29th of Bahman (18 February) showed that society is thirsty for reform.

The hardline "Jebheh" appears to have been writing about an entirely different election, because on 19 February it described the "Heavy Defeat of the 2nd of Khordad Front."

There were some cautionary comments. Iranian political commentators told the 23 February "Ham-Mihan" that the new parliament will be able to work better with the executive branch, but the headline warned that "People should not have wonderful expectations of the reformists." The 23 February "Payam-i Azadi" also sounded a cautionary note: "Let's be careful! Let's study this golden age."

"Arya" wondered on 19 February, "The elections are over, what will happen tomorrow?" Prognostications have been varied. The 19 February "Siyasat" said the next step for the 2nd of Khordad front was leadership of the parliament. "Aftab-i Imruz" director Karim Arqandpur predicted on 23 February that the next speaker of parliament will be either Mohammad Reza Khatami or Mohsen Mirdamadi.

Said Hajjarian of the Islamic Iran Participation Party told the 19 February "Aftab-i Imruz" that the new reformist parliamentarians will be confronted with many of the same issues the last parliament faced. They must, therefore, study them thoroughly before taking any actions. He added that their strategy would not be based on factional divisions, because all the factions have worked together in the past, and it will therefore be a four-year (the length of a term) national strategy. Reformist candidate Behzad Nabavi warned that "We should not be after outlandish programs and must not create expectations among people," Reuters reported on 21 February.

In the run-up to the election, however, reformists has promised increased personal and press freedom, and strengthened political parties. Newly-elected Isfahan representative Rajabali Mazrui, for example, said a first step would be to change the law banning satellite dishes, AFP reported on 22 February.

People also want but apparently do not expect, economic improvements. A 29-year old businessman told AFP on 21 February that "I would do anything to get out of the country. Things just aren't working here." A 25-year old student told AFP that "The economy is still horrible. I don't think anything will change."

And consequently, the nature of public expectations is likely to play a critical role. The people who elected the reformists are presumably the same ones who elected President Khatami. Until now, his supporters have been able to argue that a conservative parliament has blocked Khatami's plans. But a reformist majority eliminates this excuse. Now, if social reforms are not forthcoming and if new jobs do not materialize, Khatami may lose much of his public support. Unless, of course, the new parliament seeks to blame its predecessor for the problems of today. (Bill Samii)

ELECTION RESULTS AND VIOLATIONS. Some 69.25 percent, or 26.8 million, of Iran's 38.7 million voters cast ballots in the parliamentary election, the Interior Ministry announced on 26 February. The final tally will not be known until May--when run-offs are held in 52 constituencies for 65 seats--but as of 26 February, 148 parliamentary seats were won by reformists, 37 by conservatives, 35 by independents, and 5 by religious minorities. The number of women deputies fell from 13 in the fifth parliament to eight in the sixth, "Iran" reported on 24 February. Results for Tehran's 30 seats were delayed amidst allegations of irregularities and ballot-box stuffing.

There were complaints that the Tehran vote-count had been delayed so an unnamed, well-known candidate (presumably Ali-Akbar Hashemi-Rafsanjani, who was faring badly, near the bottom of the top 30) would benefit, "Payam-i Azadi" and "Bayan" reported on 23 February. Meanwhile, "Resalat" reported that the counting was delayed to favor the reformists. It noted that Interior Ministry Deputy Mustafa Tajzadeh, who heads Iran's election headquarters, is a member of the Islamic Iran Participation Party.

Seminarians in Orumieh staged a rally to protest electoral violations, "Sobh-i Imruz" and "Jomhuri-yi Islami" reported. A losing candidate in Kurdistan Province claimed that state broadcasting favored one of his opponents, "Ham-Mihan" reported on 23 February. A candidate in Semnan asked that release of the results be delayed because of vote-rigging, "Sobh-i Imruz" reported on 21 February. (Bill Samii)

FOREIGN REACTIONS GENERALLY POSITIVE. Many foreign governments have reacted positively to the 18 February parliamentary election, claiming that the results justified their close relations with Iran. British Foreign Secretary Robin Cook said on 21 February that "The high turnout for the parliamentary elections is strong evidence of an open and vigorous contest." And he added that "This is a clear signal of the Iranian people's interest in modernization and welcome confirmation that our policy of dialogue with Iran is correct. I very much look forward to continuing to work with the Iranian government to take forward the process of engagement, including during my forthcoming visit to Tehran."

The Austrian Foreign Ministry claimed prescience. Its general-secretary, Albert Rohan, said "Of course, to strengthen the reform faction around President Mohammad Khatami turned out be right," Vienna's "Die Presse" reported on 22 February. Rohan expects Austria to be at the forefront of European contacts with Iran, but he expects some resistance from Scandinavian countries because of their "rigorous standpoint on human rights issues."

Italian Foreign Minister Lamberto Dini, in an official communiqu� on 21 February, said that "the election results will contribute to a further improvement in the dialogue between Iran and the international community." He also took credit for being one of the first countries to put in place "a program of high-level contacts" with Iran.

Portuguese Foreign Minister Jaime Gama welcomed the election results. He told Lisbon's RTP Antena 1 on 21 February: "It appears to us to be a positive step towards reform. Naturally there is a long way to go in Iran, but the signs given by the population in these elections are extremely important to justify a path to reform. We will have the opportunity to discuss extensively this new situation in Iran when soon --within the Portuguese EU presidency -- the Iranian foreign minister visits Lisbon."

Spanish Foreign Minister Abel Matutes said "these elections will constitute one more step in the consolidation of the moderate reform process initiated by President Mohammad Khatami, who enjoys the undoubted popular backing which Spain follows with solidarity and interest," Madrid's EFE reported on 21 February.

Japanese Foreign Ministry spokesman Ryuichiro Yamazaki said "We welcome the fact that the elections in Iran took place in a democratic atmosphere and that participation was extremely high," Kyodo news agency reported on 22 February. Japan also claimed foresight, when Yamazaki said "Japan has been promoting high-level dialogue with Iran in welcoming and supporting President Mohammad Khatami's policy of promoting domestic reform and easing tensions with the international community." He added that Tokyo has invited Khatami for a visit.

Australian Trade Minister Mark Vaile said Canberra is "looking forward to strengthening the relationship with the new government," the "Australian Financial Review" reported on 23 February. Chinese Foreign Ministry spokesman Zhu Bangzao said Peking had followed the election with interest, Zhongguo Xinwen She news service reported on 22 February. Zhu Bangzao expressed the hope that the election will promote Iran's stability and prosperity. Saudi Arabia's Crown Prince Amir Abdullah ibn Abd al-Aziz as-Saud telephoned his congratulations on the massive turnout to President Mohammad Khatami, IRNA reported on 24 February.

Sources in the Israeli government said that the election is a positive development, but they do not think Tehran's attitude towards Israel will change in the near future, Tel Aviv's "Yediot Aharanot" reported on 20 February. One source, however, suggested that Iran's relationship with the U.S. will change and that this will eventually bring about a change in its relationship with Israel, and "Also a reduction in its efforts to obtain nuclear weapons."

Regional publications also commented on the election. An editorial in Jordan's "Al-Rai" said "Iran is leaving the revolutionary phase to set up a democratic nation." "Al-Arab al-Yawm" and the "Jordan Times" also praised the election, with the latter saying "When the people decide for change, they can bring it about no matter how strong the regime they confront, nor how undemocratic an elections law is."

The election showed, Bahrain's "Akhbar al-Khaleej" said on 21 February, that "the Iranian people are determined to go all the way in their drive for reform." The Saudi "Asharq al-Awsat" said Iranians sent a message: "Reform in all fields." "Al-Hayat" warned that reformists may have gained control of the parliament, but now they face a sterner test -- using this power to bring about real reforms.

Some Middle Eastern publications saw the Iranian election as a positive example. A 21 February editorial in Beirut's "An-Nahar" pointed out that however flawed Iran's democratic process is, it is way ahead of anything in the Arab world. The Arab states can learn from Iran, because over 20 years it has built institutions that are "based on the mechanisms of democratic competition." The Pan Arab "Al-Qods al-Arabi" said: "To put it very simply, Iran is moving forward. We [Arabs] are moving too--backward." (Bill Samii)

WASHINGTON AND THE ELECTION. The U.S. government has expressed pleasure with the outcome of the Iranian election and hinted that the results might lead to some sort of reciprocal reward. But at the same time, Washington reiterated that its position on Iranian activities which cause concern has not changed. Reactions from Iran, whether from the government or from the leading reformist parliamentarian-elect, however, indicate absolutely no change in Iran's stance towards the U.S. or the issues that concern it.

U.S. Secretary of State Madeline Albright praised the large public participation, saying on 19 February that "[The Iranian people's] enthusiasm is testimony to the growing strength of democracy in Iran, which we do welcome."

State Department spokesman James Rubin's 21 February comments were even more enthusiastic. He gushed: "All indications are that this election is an event of historic proportions. The Iranian people have demonstrated unmistakably that they want policies of openness and engagement with the rest of the world. They have also made clear their preference for internal policies that allow them greater freedom within Iran. ... We welcome that."

The next day, a more restrained Rubin described the kind of changes the State Department hopes to see in Iran. "For our part, we would like to see a change in specific policies of concern. They relate to Iran's attitude towards the Middle East peace process, they relate to the seeking of weapons of mass destruction and the support for terrorism."

The newly-elected reformists appear unlikely to have a significant impact on such foreign policy issues. As before, the final say rests with Supreme Leader Ayatollah Ali Khamenei. Moreover, President Mohammad Khatami has repeatedly voiced his support for Lebanon's Islamic resistance and has met with officials from terrorist organizations like Hamas and the People's Front for the Liberation of Palestine--General Command. Reformist parliamentarian-elect Mohammad Reza Khatami is no different. Speaking about Lebanon, he said that "We are defending the right of people whose land is occupied, and America is defending the people who occupied this land," "The Independent" reported on 23 February.

Mohammad Reza Khatami's views on relations with the U.S. do not appear to have changed. He said that "We are interested in detente and in the birth of relations based on equality and on mutual respect. But we want concrete acts, like for example the lifting of the embargo, not mere diplomatic bowing and curtsying," Turin's "La Stampa" reported on 22 February. (Bill Samii)

A PAT ON THE HEAD? In the wake of the Iranian elections, Washington reportedly is considering rewarding Tehran for operating like the democracy it purports to be. An unnamed U.S. official told the 22 February "USA Today" that potential "rewards" could be a message from President Bill Clinton during the Iranian New Year in March, granting a high-level media interview, or easing sanctions against the import of Iranian goods like pistachios and carpets.

Foreign Minister Kamal Kharrazi hinted at the kind of small-scale rewards that Iran would welcome. "The export of Iranian goods which American markets need, particularly carpets, pistachios and caviar, are banned, but Washington wishes to be able to export its grain to Iran," state television reported on 23 February.

Washington is unlikely to offer loan guarantees for Iran to buy American wheat. "I think it's a little too early to go that far," Richard Fritz, general sales manager in the U.S. Department of Agriculture's Foreign Agricultural Service, told Reuters on 22 February. And State Department spokesman James Rubin said on 23 February that "the United States does not believe that conditions favor restarting World Bank lending to Iran at this time. Iran has yet to make progress in a number of fronts that should precede such action, including pursuing meaningful economic reform and abandoning support for terrorism." (Bill Samii)

DEVELOPMENT PLAN TO ADDRESS AGRICULTURAL SHORTCOMINGS. Terrance Vorachek, director of the U.S. Grain Council's Middle East division, urged the provision of export credit guarantees because he expects Iranian grain demands to increase. "It's obvious that they cannot produce domestically to meet their needs," he said, according to Reuters on 15 February. Although there have not been any wheat sales, Iran has imported 500,000-- 603,700 tons of American corn in the 1999/2000 marketing year so far. It is expected to import a total of 1-1.2 million tons of corn this year, according to Reuters. The Third Development Plan, which the fifth parliament was considering and will be in the hands of the new parliament, seeks to address agriculture problems.

Some of the reasons for Iran's failure to produce enough food for its people were discussed during Agriculture Week in January. Agricultural Commission head Abdol Qafar Shoja asked, according to "Arya," "Since during the two previous development plans the agriculture industry was not provided adequate banking facilities nor needed credits to implement necessary infrastructural projects, how could we expect suitable performance by this ministry?" President Hojatoleslam Mohammad Khatami answered this question a few days earlier at a gathering of farmers. He said that the Third Development Plan being considered by parliament is "aimed to help the sector to reach an economic balance," IRNA reported on 11 January. Agriculture Minister Issa Kalantari said the government is determined to provide farmers with scientific assistance to increase their earnings and reduce costs, IRNA reported on 10 January. If structural reforms are made, Kalantari added, the currently unemployed 30,000 agricultural engineers can resume working.

But it will be an uphill battle. Kalantari told the 9 January "Iran" newspaper that the biggest problem is a lack of foreign and domestic investment, combined with cheap imports, subsidized foodstuffs, and consumer protection measures. Kalantari pointed out that tariffs must be imposed on agricultural imports to make domestic products more competitive. Another problem Kalantari described is the export of Iranian goods at high foreign exchange rates, while imports are brought in at low foreign exchange rates. Government agencies and semi-governmental foundations are eligible for the preferential exchange rates.

In addition to these problems, Abdor-Reza Baqeri, Chancellor of Mashhad's Ferdowsi University and an agriculture specialist, said that because "A significant portion of the agro-sector is run by small landowners and scientific research (in the sector) has not yet gained momentum ... [there is] disorganization, the absence of efficient promotion, high illiteracy rate among farmers, inappropriate use of agriculture institutions and sometimes a lack of trust among farmers vis-a-vis the results of scientific research." Baqeri told the 23 January "Iran Daily" that scientific research must be planned and conducted in tandem with the country's macro-plans. At the moment, Baqeri said, there is no overall supervisory body, so unrelated policies and plans are implemented. Baqeri expressed happiness that the Third Development Plan pays closer attention to the agricultural sector.

There were several developments in Iran's international agricultural ties in January, according to IRNA reports. Ambassador to Paris Alireza Moayeri met with French Minister of Agriculture, Fisheries, and Food Jean Galvany and expressed Iran's readiness to "boost cooperation...in fisheries, animal husbandry, dairy industries, and agriculture sectors." Iran and Azerbaijan agreed to set up a customs point at Qare Diz-Aslandouz border crossing to facilitate transfer of Azeri sugar beets to Iran's Parsabad factory. And after the visit of a Pakistani trade delegation, Iran agreed to import 15,000 tons of rice, although the Iranian side complained about the poor quality of exported Pakistani rice. (Bill Samii)

CZECH PARTICIPATION IN BUSHEHR BLOCKED... The Czech government approved a bill on 23 February banning the provision of supplies for Iran's nuclear reactor project in Bushehr. The specific target of this legislation is a contract signed by Czech firm ZVVZ Milesvsko to provide air-conditioning equipment. The next step is for the bill to be approved by the Chamber of Deputies and the Senate. Finally, President Vaclav Havel must sign the bill. This can be a slow process, but under the state of legislative emergency related to the bill, this case is likely to be given priority over other legislative matters.

The Czech Republic has been under international pressure to back out of the project. U.S. Secretary of State Madeline Albright discussed the subject with Czech Prime Minister Milos Zeman at a reception during the World Economic Forum in Davos, "Hospodarske Noviny" reported on 1 February. Israeli Foreign Minister David Levy, when he visited Prague, also discussed the subject with Zeman.

U.S. Undersecretary of State for Political Affairs Thomas Pickering, who had held meetings with Czech Deputy Prime Minister Vladimir Spidla, Foreign Minister Jan Kavan, and parliament chairman Vaclav Klaus, suggested to reporters that sanctions would be imposed on the Czech Republic if ZVVZ Milevsko participated in the Bushehr project. When asked if the U.S. monitors Israeli nuclear policy so closely, Pickering answered: "As far as I am aware, Israel has not abandoned its point of view that it will not be the first one to introduce nuclear weapons into the Middle East," "Pravo" reported on 8 October.

Tehran reacted to these developments by promising the Czechs that if they completed the initial contract, more orders would be forthcoming. And they would not just be for ZVVZ Milevsko, Prague's "Lidove Noviny" reported on 14 February. The Iranian side claimed that $200 million worth of business would go to Modranska Podrubni, Kralovopolska, Skoda Praha, and Skoda Nuclear Engineering.

According to some parts of the Czech media, Prague intends to stop ZVVZ Milevsko's completion of the contract by nationalizing the company. The government has started an appraisal of the firm in order to determine what would constitute a fair offer, "Lidove Noviny" reported on 29 January. The entire situation is problematic, because the company currently is profitable, but if the sale for the Bushehr project does not occur, its annual receipts will be halved, according to the 31 January "Lidove Noviny." That could mean that the owner -- the government -- would have to lay off many of the company's 1,310 employees.

Such reports stem from statements by ZVVZ Milevsko management and shareholders, and it is likely that they are based on attempts to overstate the firm's value and thereby increase the compensation they receive in case of a buy-out. Another reflection of the management's focus was ZVVZ Milevsko chief Stanislav Kazecky's statement that the U.S. pressure was commercially-related. He said that with Czech firms out of the way, U.S. firms would fill the gap, "Hospodarske Noviny" reported on 23 February.

Czech minister without portfolio Jaroslav Basta said that Iran has sufficient oil for its energy needs, "Hospodarske Noviny" reported on 15 February. "Therefore it is more than likely that the nuclear powerplant in Bushehr is backing for the Iranian project to manufacture weapons of mass destruction. In this respect, this country is no different than its neighbor Iraq." (Bill Samii)

...BUT NOT IN SUGAR SECTOR. Czech firm ZVU Potez, a subsidiary of ZVU Hradec Kralov engineering company, sent equipment for two sugar cane refineries to Iran, CTK news agency reported on 14 February. This contract is worth Kc600 million (about $16.5 million), and the overall value of the projects is Kc1 billion (about $27.5 million). (Bill Samii)

CORRECTION. Nour and Mahmoudabad constituencies are in Mazandaran Province, not Gilan Province as reported in the 21 February "RFE/RL Iran Report."