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Iran Report: November 3, 2005

3 November 2005, Volume 8, Number 43

QODS DAY SHOWS REGIME'S DANGEROUS SIDE. "I have been notifying the Muslims of the danger posed by the usurper Israel," Ayatollah Ruhollah Khomeini, father of Iran's Islamic Revolution, said in a 7 August 1979 announcement. "I ask all the Muslims of the world and the Muslim governments to join together to sever the hand of this usurper and its supporters...and, through a ceremony demonstrating the solidarity of Muslims worldwide, announce their support for the legitimate rights of the Muslim people."

Khomeini declared that the last Friday of the holy month of Ramadan -- 28 October this year -- would be marked as Qods Day (Jerusalem Day). Qods Day has been celebrated faithfully since then, not only in Iran but in countries with sizable Shi'a Muslim minorities, and it has become a ritualized outpouring of hatred directed at Israel. If this hatred was restricted to an annual rally, it could be dismissed as a meaningless display. However, because of Iran's alleged support for terrorist organizations and suspicions that it is developing nuclear weapons, many in the international community are concerned.

Against Normal Relations With Israel

According to state radio, in his 21 October sermon at the Tehran Friday prayers, Supreme Leader Ayatollah Ali Khamenei said that Qods Day is especially important this year for several reasons, one of which is that some Islamic states are normalizing their relations with Israel -- he described this as "the conspiracy instigated by the Americans, the Zionists, and some of their allies." Khamenei discouraged this normalization process and suggested that countries do this just to please the United States.

Khamenei is not the only Iranian official to speak out recently against normalized relations with Israel. President Mahmud Ahmadinejad told his cabinet in Tehran on 24 October that Israel's effort to normalize relations with Muslim countries is a "new Zionist plot," state radio reported. Ahmadinejad said that "Muslim nations will not let it do so on international Qods Day." Two days later, Ahmadinejad told a conference on "A World Without Zionism" in Tehran that any government that normalizes its ties with Israel will encounter the wrath of the Islamic umma (community), the Islamic Republic News Agency (IRNA) and state television reported. Former President Hojatoleslam Mohammad Khatami said in a 25 October speech at Ayatollah Khomeini's shrine that Iranians should participate in Qods Day rallies to show their solidarity with the Palestinians and to protest "the great oppression of our time," Mehr News Agency reported. Khatami said Palestinians are the biggest victims of state-sponsored terrorism at the hands of Israel.

Also on 25 October, the Assembly of Experts, an elected body of 86 clerics, encouraged Muslims to participate in the Qods Day events and show their adherence to the ideals of Ayatollah Khomeini, Mehr News Agency reported. The Assembly of Experts statement discouraged Muslim states from normalizing relations with Israel. Hojatoleslam Ali-Akbar Mohtashami-Pur, secretary-general of the International Conference to Support the Palestinian Uprising (Intifada) series and a founder of Lebanese Hizballah, said in a 22 October interview in Tehran that Islamic countries' establishment of links with "the Zionist regime" (presumably Israel) is a crime, Mehr News Agency reported. He referred specifically to Bahrain, Pakistan, Qatar, and Turkey as being in the process of normalizing their relations with Israel. He said Jerusalem and the Al-Aqsa mosque are under threat, and Islamic countries should be holding a summit on this issue.

More Than Just Talk?

Tehran is doing more, however, than just talking tough. According to the U.S. State Department, which designated Iran a state sponsor of terrorism in January 1984, Iran helps terrorist groups secure funding, weapons, and materials, and it provides them with safe areas from which they conduct operations. The State Department identifies Iran as the most active state sponsor of terrorism in its most recent annual report -- "Country Reports on Terrorism," released by the Office of the Coordinator for Counterterrorism on 27 April 2005. That report notes Iranian interference in Iraq and Tehran's refusal to identify Al-Qaeda members it claims to have in custody. The State Department report notes Iran's "high-profile role in encouraging anti-Israeli terrorist activity," and it notes Tehran's support for "Lebanese Hizballah and Palestinian terrorist groups -- notably HAMAS, the Palestinian Islamic Jihad, the al-Aqsa Martyrs Brigades, and the Popular Front for the Liberation of Palestine-General Command."

Iranian officials acknowledge helping these organizations, and Tehran sees them as liberation movements. The help Iranian officials admit to is only of the political and moral kind, and when accused of supporting terrorism they level counteraccusations and claim that Iran is the biggest victim of this phenomenon.

Moreover, representatives of Hizballah, Hamas, and similar organizations sometimes participate in Qods Day rallies and other events in Iran, and Iranian officials sometimes meet with them in Beirut, Damascus, and elsewhere. For example, Hamas representative Abu Osama Abd-al-Moti said at the 26 October "A World Without Zionism" event in Tehran, "With your help and support and the support of the entire Islamic nation, our people can remain steadfast and confront Israel and America until this cancerous gland is removed," Al-Manar television reported.

'Martyrdom Operations'

Not only does Iran provide assistance to terrorist organizations, it has encouraged its own citizens to become suicide bombers. In May 2004, an organization called the Headquarters for Tribute to the Martyrs of the Global Islamic Movement began recruiting suicide bombers in Iranian cities. This organization is affiliated with the Islamic Revolution Guards Corps, and in December 2004 it commemorated the 1983 suicide bombing of a U.S. Marine Corps barracks in Beirut, in which 241 Americans were killed. According to the martyrs' headquarters, the prospective suicide bombers would operate in Iraq and Palestine.

There is, however, no evidence to date of any actions by Iranian suicide bombers. That is not because suicide bombings -- which are referred to as martyrdom operations -- are being discouraged by Iranian officials. During a 1 May 2002 speech, Supreme Leader Khamenei said, "It is the zenith of honor for a man, a young person, boy or girl, to be prepared to sacrifice his life in order to serve the interests of his nation and his religion. This is the zenith of courage and bravery.... [M]artyrdom-seeking operations demonstrate the pinnacle of a nation's honor," state radio reported. In a 24 August speech at the headquarters of the paramilitary Basij, Khamenei said this organization is a model for the rest of the Islamic world. He added, "That is why America and its agents are trying to defame jihad and martyrdom and question such supreme values," state television reported.

Contributing further to concern about Iranian intentions are suspicions of Tehran's nuclear, biological, and chemical weapons programs, which were described by U.S. intelligence community leaders in testimony before the U.S. Senate Select Committee on Intelligence in February and the Senate Armed Services Committee in March. Iran's missile inventory -- particularly the Shihab-3 medium-range ballistic missile, which has a 1300-kilometer range, and the development of a 2000-kilometer version -- are also cause for concern.

Given this record, the comments of President Ahmadinejad on 26 October are especially worrisome. He described Israel as a "disgraceful blot" that should be "wiped off the map." One could perhaps dismiss the president's statement as bluster or rhetoric as he was paraphrasing Ayatollah Khomeini's previous comments on Israel. But Ahmadinejad's comments came hours before a suicide bomber in the Israeli town of Hadera killed five people. Palestinian Islamic Jihad -- one of the groups sponsored by Iran -- took credit for the bombing. (Bill Samii)

TEHRAN UNENTHUSIASTIC ABOUT TALKS WITH WASHINGTON. Interior Minister Hojatoleslam Mustafa Purmohammadi said on 24 October in the city of Shiraz that Iran is willing to consider discussions with the United States if they take place on an equal footing and are based on mutual respect, IRNA reported. He said the current atmosphere is not conducive for such talks. "We find no reason to talk with the U.S.," he said. "We doubt Washington's integrity and it is not clear what its goals are for wanting to talk to us as revealed in recent offers made through intermediaries." Purmohammadi accused the United States of having a "hostile attitude."

U.S. Secretary of State Condoleezza Rice told "USA Today" of 17 October that direct Tehran-Washington discussions would not be productive "at this point." "The Iranians know what they need to do," she said. "They are on the wrong side of so many issues in the Middle East."

The Iranian ambassador to France, Sadegh Kharrazi, did not rule out talks with the United States. He told "USA Today" that "Iran would be open to talks, but the condition is mutual respect." (Bill Samii)

IRAN HOPES TO SELL DISCOUNTED NUCLEAR FUEL. President Mahmud Ahmadinejad announced during a 25 October speech at the Narmak Mosque in Tehran that Iran will sell the nuclear fuel it eventually produces, state television reported. "We will produce nuclear fuel and sell it to other countries with a 30 percent discount," he said. He also spoke dismissively of Western promises to provide Iran with nuclear fuel. This is not the first time Tehran has expressed an interest in the opportunities of the nuclear marketplace. Foreign Ministry spokesman Hamid Reza Assefi said on 13 February 2004, "The Islamic Republic of Iran has achieved major success in the technology of nuclear fuel centrifuge ready to play its role within the context of an international cooperation in the market that supplies fuel for nuclear reactors," the Iranian Students News Agency (ISNA) reported. Then Foreign Minister Kamal Kharrazi said the next day, "The Islamic Republic of Iran, as a country which has potentials on producing nuclear fuel, is ready to offer its produced fuel to international markets." (Bill Samii)

IRAN-MOSCOW COOPERATION HEADQUARTERS TO BE CREATED. President Ahmadinejad said on 26 October that a special Iran-Russia headquarters will be established to improve bilateral relations between the two countries, IRNA reported. In a telephone conversation with Russian President Vladimir Putin the previous evening, Ahmadinejad said Iran would like to increase bilateral cooperation and facilitate the implementation of previous agreements. Ahmadinejad indicated his appreciation of the Russian stance on Iran's nuclear program, and he said he supports the Russian stance on Caspian Sea issues.

During that conversation, NTV, RBK-TV, and other Russian media reported, the two presidents put the nuclear issue in the context of possible action by the UN Security Council. Putin reiterated Moscow's position that the standoff over Iranian nuclear activities should be resolved "by political means within the framework of the International Atomic Energy Agency [IAEA]," RIA-Novosti reported. Putin also reportedly told Ahmadinejad that Russia favors broader Iranian cooperation with the IAEA and a resumption of Tehran's talks with the so-called EU-3 (Britain, France, and Germany).

Diplomatic sources within the United States and the EU were quoted by AFP as suggesting on 25 October that the West will refrain from referring the issue to the Security Council unless it can get Russian backing. Russia is reportedly working on a compromise under which Iran could process uranium ore but not enrich uranium or produce nuclear fuel.

Speaking at a government meeting on 24 October, Putin proposed creating a Caspian regional security and peacekeeping force (CASFOR), RIA-Novosti reported. Putin asked Foreign Minister Sergei Lavrov to involve all littoral states in the CASFOR project, including Iran. Later the same day, Lavrov had talks with his Iranian counterpart Manuchehr Mottaki. Lavrov said afterward: "our common position is to continue to regulate issues concerning the Iranian nuclear program through the IAEA," reported. Lavrov added that Russia will seek a solution to that issue that on one hand "provides the legal right of Iran to access the peaceful use of nuclear energy and on the other hand to eliminate any doubts as to the peaceful nature of [Iran's nuclear] program."

The meeting between Lavrov and Mottaki came on the same day that U.S. national security adviser Stephen Hadley held talks in Moscow with Lavrov and Putin. The daily "Kommersant" wrote on 24 October that Moscow may propose giving Tehran more arms and greater military cooperation in exchange for making major concessions regarding its nuclear program along the lines of what the United States and the EU-3 (Germany, Britain, France) are calling for. (Bill Samii, Victor Yassman)

TEHRAN'S ENVOY NOTES POSSIBILITY OF SCO MEMBERSHIP. In an interview with Avesta on 24 October, Nasser Sarmadi-Parsa, Iran's ambassador to Tajikistan, said that Iran is considering full-fledged membership in the Shanghai Cooperation Organization (SCO members are China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Uzbekistan). Calling the SCO an organization with "its own definite fundamental goals proceeding from the interests of member states," Sarmadi-Parsa stated: "Iran has a positive and strong view with regard to joining the SCO as a full-fledged member." India, Iran, and Pakistan gained observer status in the organization at a July SCO summit in Kazakhstan. (Daniel Kimmage)

OFFICIALS CONTRADICT EACH OTHER ON AHVAZ BOMBINGS. Iraj Amirkhani, the General and Revolutionary Courts prosecutor in the southwestern city of Ahvaz, said on 23 October that some 25 people have been arrested in connection with bombings that took place there in June, Fars News Agency. He said no one has been arrested in connection with the 15 October bombings in Ahvaz. Amirkhani went on to say that the people arrested in connection with the June bombings have admitted that "they were supported by some of the devotees of the previous regime who live in Britain and that they acted as a team."

Judiciary spokesman Jamal Karimirad said on 22 and 23 October that some 30 people have been arrested in connection with the 15 October bombings, state media reported. He said the arrests helped foil other plots, state television reported on 22 October. He also connected the detainees with foreign powers, saying: "As for the countries that were somehow involved in the bombings, as we have said, the countries that occupied Iraq and committed all those crimes in that country had somehow supported them," state radio reported on 23 October. Karimirad said a special judge and an inspector will investigate the recent events in Ahvaz, IRNA reported.

In a 19 October interview with state television, Foreign Minister Manuchehr Mottaki accused the U.K. of involvement in the Ahvaz bombings. "The British troops in Basra tried to carry certain operation in the southern part of Iran. We have seen signs of such acts since they first appeared in the area - I'm referring to certain operation. The relevant officials have collected evidence. We summoned a British embassy official following the recent incidents in Ahvaz." (Bill Samii)

LEGISLATURE BACKS RETALIATORY TRADE RESTRICTIONS. There are reports from the United Kingdom and South Korea, as well as the Czech Republic and Argentina, that their exports to Iran are encountering various barriers, and it is believed that this is in retaliation for these countries voting against Iran in a September International Atomic Energy Agency governing-board resolution. Yet Iranian officials are not being forthright on this issue, and the unconfirmed ban on imports has produced mixed reactions in Tehran.

Foreign Ministry spokesman Hamid Reza Assefi said, according to the 23 October "Iran," "Up to now, no sanctions have been imposed on the countries mentioned."

Interior Minister Mustafa Purmohammadi said on 22 October that the government is considering imposing trade restrictions against South Korea and the United Kingdom, Fars News Agency reported. "Well, we cannot separate our economic ties from our political stances and national interests," Purmohammadi said. "If a country does not take our national interests into consideration, we see no reason to help it on the economic side."

"Farhang-i Ashti" reported on 19 October that the Foreign Ministry has submitted a Commerce Ministry directive banning imports from Argentina, the Czech Republic, the United Kingdom and Northern Ireland, Israel, and South Korea. Officials cited by the daily did not confirm the specifics of the directive, and Commerce Minister Masud Mir-Kazemi denied that such a directive exists.

"National interest" should be the priority, said Tehran representative Parviz Soruri, according to the 24 October "Etemad." He advocated using economic tools in political relations, but cautioned: "It is an immature and wrong reaction that, whenever we are faced with a political problem, we make use of the economic lever." Arak representative Hussein Moradi said that "reducing the level of economic exchanges does not mean that we are cutting off our political relations with those countries." He said the government should have alternatives if it cuts off economic relations with one country. Bandar Anzali's reformist representative, Hadi Haqshenas, said the government should have a "long-term strategy" to deal with such eventualities and it should not resort to "hostile decisions." "It should not act on the spur of the moment," "Etemad" quoted him as saying.

Conservative Hashtrud parliamentary representative Mohammad Shahi-Arablu said on 26 October that the legislature will back the executive branch if it decides to ban imports from South Korea and the United Kingdom, Mehr News Agency reported. Shahi-Arablu said Iran spends some $20 billion on imports from the 22 countries that voted against it, out of a total of $38 billion in imports. (Bill Samii)

DISSIDENT JOURNALIST ALLEGEDLY BEATEN. Masumeh Shafii, the wife of imprisoned dissident journalist Akbar Ganji, said in a 26 October announcement that her husband was beaten by judiciary officials when he was in Milad Hospital, Radio Farda reported on 26 October. She claimed that officials demanded that he renounce his Manifesto of Republicanism and his communications with dissidents Ayatollah Hussein Ali Montazeri and Islamic intellectual Abdolkarim Sorush, and that he agree to remain silent after his release. Masumeh Shafii said her husband refused, so the officials beat him in three different sessions on one day. She said he is currently in solitary confinement and his food and medicine intake is restricted. (Bill Samii)

GOVERNMENT ALLEGEDLY TRYING TO SILENCE STUDENTS. Ardeshir Zarehzadeh, spokesman of the student committee for the defense of political prisoners, told Radio Farda on 25 October that political prisoners, as well as jailed students, are being held in solitary confinement or with ordinary criminals, and some have not been allowed to see their families for months at a time. The problems faced by these students and other prisoners are getting worse, he said, adding that the judiciary, the Intelligence and Security Ministry, and the Science, Research, and Technology Ministry are coordinating their efforts to silence these people.

Zarehzadeh provided detailed information on prisoners such as Behruz Javid-Tehrani and Bina Darabzadeh. He said the prison leaves of Mehrdad Heidarpur, Behnam Vafa-Sarshat, and Mehran Kosari were blocked, and the furloughs of other prisoners are likely to be rescinded. He said the number of political prisoners and student prisoners is increasing every day.

Zarehzadeh comments contradict those of Iranian officials, who claim that imprisoned students will be enjoying their freedom soon. The director of the security department at the Science, Research, and Technology Ministry, identified only as Zerai, announced on 23 October that he has submitted to the judiciary an initial and partial list of imprisoned students who should be pardoned, Radio Farda and the Iranian Labor News Agency (ILNA) reported. "We are preparing a list of all students detained across the country and intend to identify all imprisoned students, even those from the Islamic Open University, and submit their names to the judiciary," Zerai said. He explained that his ministry is preparing a comprehensive list because the judiciary says it does not keep one.

Judiciary head Ayatollah Mahmud Hashemi-Shahrudi met with Science, Research, and Technology Minister Mohammad Mehdi Zahedi on 26 September, asked for a list of imprisoned students, and issued a directive calling for their release, IRNA reported. (Bill Samii)

FINANCIAL CRIMINALS TO BE NAMED AND SHAMED. Judiciary head Hashemi-Shahrudi said on 24 October that the names of individuals involved with financial crimes cannot be made public until they are found guilty or the appeals process has been exhausted, IRNA reported. He added that the judiciary will not allow the country's investment climate to be undermined by unnecessary summonses, false arrests, or unwarranted imprisonments. National media and commentators have recently criticized a government report on corruption that did not identify any of the individuals who allegedly embezzled money and received illegal loans worth millions of rials. Hashemi-Shahrudi described the biggest financial crime as harming the investment climate and contributing to capital flight. Hashemi-Shahrudi announced that an investment security office has been established by the judiciary and the presidential office. (Bill Samii)

LABOR ACTION IN IRANIAN KURDISTAN. Mohammad Sadiq Karimi, a labor representative in Kurdistan Province, said on 22 October that a three-week labor action is under way at the Kurdistan Textile Company, ILNA reported. Karimi said the 407 workers go to the textile factory but do not do any work. The textile company belongs to the Oppressed and Disabled Foundation, Karimi said, and the workers are reacting to the employers' refusal to repay funds the company withdrew from the company cooperative. Karimi added that the workers go to the factory because they are being paid on time and there are no problems with their health insurance. (Bill Samii)

PRESIDENT DISCUSSES ECONOMIC PLANS. President Ahmadinejad said during a 22 October speech to university students and professors in Tehran that he will do his utmost to fight corruption and to prevent the embezzlement of public funds, IRNA reported. He added that the banking system and state-owned enterprises will be reformed, and national wealth will be redistributed to the neediest parts of the country. Ahmadinejad criticized the transfer of state enterprises to the private sector over the last 16 years. In another part of his speech, Ahmadinejad said he will address the issue of high tuition fees at institutions of higher education. (Bill Samii)

IRAN-PAKISTAN-INDIA PIPELINE TALKS CONTINUE IN TEHRAN. Deputy Petroleum Minister Hadi Nejad-Husseinian said on 25 October in Tehran that officials from New Delhi want to finalize the deal on the Iran-Pakistan-India natural-gas pipeline as soon as possible, state television reported. He was speaking at the end of the second meeting of the pipeline working group. Nejad-Husseinian said the Indians at the meeting reported on the progress of their negotiations with Islamabad, and they mentioned a new agreement on gas prices. Resolution of transit fees remains outstanding, he said. The next working-group meeting is scheduled for early December, he said. (Bill Samii)

ANALYSTS GIVE ECONOMIC PLANNING AND DEVELOPMENT MIXED MARKS. The recent granting of additional oversight responsibilities to the Expediency Council caused quite an uproar in Iranian politics, with much of the discussion focusing on the possibility that this move would undermine the independence of the executive and legislative branches. But a major aspect of the Expediency Council's new powers that did not get much attention relates to Iran's Fourth Five-Year Development Plan.

That the five-year plan requires additional supervision suggests that its predecessor, the Third Five-Year Development Plan, was not overwhelmingly successful. An Iranian economist living in the United States wrote in a recent article that the five-year plan achieved "mixed results," and is based on the "Soviet-invented" and "long discredited" use of central planning. But another Iranian economist, a professor in the United States, disagreed with this basic premise in an interview with Radio Farda.

'A Sacred Ritual'

Economist Jahangir Amuzegar, who served as finance minister in the prerevolutionary Iranian government, wrote in the Fall 2005 issue of "Middle East Policy" that the third plan, which ended in March 2005, focused on "prosperity achieved through high economic growth combined with optimum social justice guaranteed by employment-based poverty reduction." In addition to outlining basic goals, the plan set quantitative targets for the growth rate, public- and private-sector investment, consumption, unemployment, inflation, money supply, exports, imports, and population growth. Amuzegar continued, "the plan still resembled a wish list rather than a cohesive, input/output-based scheme." Setting precise targets when primary data is absent or dependent on external factors is unrealistic, he added.

Amuzegar noted, "Five-year central planning has now become a sacred ritual in the Islamic Republic." He continued, "Although planning has proven to be a costly exercise in futility, it is still regarded as a talisman for Iran's economic salvation."

Djavad Salehi-Isfahani, a professor of economics at Virginia Tech, had a different take on the five-year development plan. He told Radio Farda that it is not central planning which is a sacred ritual, rather, "Five-year indicative planning has now become a sacred ritual." Salehi-Isfahani described the five-year plans as "indicative plans which are needed to coordinate activities between the private sector and the government and within different government ministries." He said the move has been away from central planning since the second plan (1995-2000).

Yet Salehi-Isfahani agreed that the report card is mixed. He told Radio Farda, "I think the economy in some senses, in some measures, has done better than planners expected and in some measures it has done worse than the plan envisioned."

Debating Unemployment, Poverty, And Subsidies

In his assessment of the plan's highs and lows, Amuzegar noted that it succeeded in reaching some of its targets and, even when there were deviations, "the results were altogether reasonably satisfactory." Nevertheless, Amuzegar described several areas in which "unfulfilled promises and a clear inability to reach declared objectives" dwarfed the plans achievements.

For example, Amuzegar questioned the government's claims on reducing unemployment -- "both murky and widely contested" -- and noted discrepancies in official statistics on this subject. He wrote that the official unemployment rate was to be reduced from 15 percent in 2000 to 11.5 percent in March 2005, with the creation of 3.8 million jobs. Amuzegar cited "various official estimates" that say only 2.9 million jobs were created.

Salehi-Isfahani was more sanguine on the subject of unemployment reduction. He dismissed the possibility of data manipulation and said he has seen the raw numbers and can reproduce data from the Statistical Center of Iran. Salehi-Isfahani told Radio Farda that unemployment is down to approximately 10 percent. The real problem, he said, is that unemployment among young people remains high -- 25 percent among young males and 50 percent among young females looking for work.

Turning to the issue of poverty, Salehi -Isfahani told Radio Farda that the poverty rate has fallen. He ascribed this to rising oil expenditures and their role in creating manual labor jobs. He conceded that the plan cannot be credited for the rise in oil prices and the resulting economic growth.

Amuzegar described persistent poverty as a shortfall of the five-year plan. He mentioned an absence of data and officials' citation of contradictory figures, and he referred to data and figures that do not show progress in reducing poverty. Some of the data he cited, for example, includes a parliamentary research bureau report that describes half the rural population and one-fifth of the urban population living below the poverty line.

The effort to privatize state enterprises fell short of the plan's targets, according to Amuzegar, and he added that such enterprises are not very efficient. Amuzegar wrote: "Of the 2,000 largest enterprises in the public sector, with a roughly estimated net worth of $110 billion and annual revenues of $61 billion at the start of the plan, nearly 41 percent reportedly operated in the red." In this case, too, according to Amuzegar, the statistics are "contradictory, unreliable, and confusing." Nevertheless, they are not encouraging, showing a failure to meet targets for the transfer of shares -- "Of the $570 million worth of shares of state firms put up for sale, only $17 million worth was sold." The shares that were sold, furthermore, went to other public entities.

Salehi-Isfahani was less pessimistic on this issue as well, telling Radio Farda: "Privatization has been picking up pace." He noted that labor laws prevent the dismissal of workers which could turn around unprofitable state enterprises. "The labor market is so rigid that there is no way for buyers of this state enterprise to restructure them in a profitable way to be able to keep the workers, they need to lay off those that are not needed by that particular enterprise," he said. "I think that is one of the major inhibitors in privatizations and I think that goes back to a lack of success with human resource development and human resource reform in Iran."

Subsidies for basic necessities, such as foodstuffs, as well as implicit subsidies for most public utilities, are another topic criticized by Amuzegar. He described them as "unfair and unaffordable," and added that they impose "an unbearable burden on the treasury's meager resources, [and] encouraged wasteful consumption, smuggling, and underground transactions."

Salehi-Isfahani agreed that subsidies are a significant problem for Iran, but he rejected that this is a failure of the five-year plan. He said Iranians must decide on the wisdom of having $10-$12 billion in energy subsidies. Salehi-Isfahani continued, "Is it possible to come to an agreement that energy subsidies are reduced, and a way to maintain individual incomes to help the poor is through a more effective income maintenance program and through more effective unemployment insurance?"

Moving Target

The fourth five-year development plan is now under way, but it got off to a shaky start. Marv-Dasht representative Ali Akbar Qobadi complained at the 18 May legislative session: "Two months after the beginning of the Fourth Development Plan, related bylaws and instructions required for the execution of the plan have not yet been prepared," "Jomhuri-yi Islami" reported on 19 May. Another legislator, Asadabad's Mohammad Baqer Bahrami, said at the 13 July session that the current administrative system is unable to implement the fourth plan, "Jomhuri-yi Islami" reported on 14 July. To make the plan work, he said, "The administrative system requires brave structural reforms and immediate, accurate, and scientific planning."

As recently as September, Tehran representative Hussein Nejabat was calling for changes in the five-year plan. He said, "In order to achieve justice and Islamic fundamentalism in the Fourth Development Plan, the government, by submitting bills, and the parliament, by presenting fundamental plans, must necessarily make some revisions in line with justice in the Fourth Development Plan," "Jomhuri-yi Islami" reported on 26 September.

And in late October, the plan was changed. Legislators authorized enforcement of a law on public insurance fees by passing a bill that amends the fourth plan, "Jomhuri-yi Islami" reported on 20 October.

It is too early to tell if the Fourth Five-Year Development Plan will have greater success than its predecessor in meeting its targets. If amending it is a continuous process, then it is more likely to fulfill its objectives by 2010. But if it remains unchanged then it will probably have the same mixed record as the Third Five-Year Development Plan. (Bill Samii, Fatemeh Aman)