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Iran Report: July 14, 2003

14 July 2003, Volume 6, Number 29

IRANIAN GOVERNMENT SUPPRESSES NEWS ON '18 TIR' EVENTS. The Tehran Governorate-General's director-general for political-security affairs, Ebrahim Rezai-Babadi, said on 10 July that on the previous day a few dozen people were involved in limited disturbances in Kargar Avenue and Tehran Pars, and he claimed that some media had exaggerated the extent of the unrest, the Iranian Students News Agency reported (ISNA). If true, then the Iranian government is responsible for the lack of reliable information about the events of "18 Tir" (9 July), the anniversary of the day in 1999 when Iranian security forces and vigilantes stormed the Tehran University campus.

"The Wall Street Journal" reported on 10 July that "thousands of protesters clashed with police and Islamic vigilantes near Tehran University." "The Washington Post" described "leaderless, expectant crowds" outside Tehran University that were facing "riot police, plainclothes security officers on motorbikes, and helicopters circling overhead," and it said police broke up clashes between hard-line vigilantes and bystanders and dispersed other groups with tear gas. In other parts of the city, members of the Basij militia established checkpoints and searched automobiles.

The "Financial Times" reported that "hundreds of people" clashed with about 2,000 riot police and vigilantes, with witnesses saying "police beat and arrested dozens of youths." People chanted against the regime and President Hojatoleslam Mohammad Khatami, threw stones and explosives at the police, and honked their car horns. Reuters on 9 July cited an anonymous witness who described sporadic street battles between vigilantes, police, and "pro-democracy youths." The witness claimed the police fought the vigilantes to prevent them from fighting the youths.

Iranian exile media presented a different perspective of events. Channel 1 TV from Los Angeles took calls from Tehran that described clashes between the public and the Basij at Inqilab Square and at Tehran University, concussion grenades, and the use of fire hoses and tear gas. Callers from other parts of Tehran claimed that some demonstrators and Basijis were killed. A rather enthusiastic caller claimed that people would storm a prison to free detained protesters if they are not released by 13 July. Opposition websites described clashes at Laleh Square in Tehran. The websites and television stations described clashes in Ahvaz, Isfahan, and Kurdistan, and in Mashhad Ansar-i Hizbullah vigilantes allegedly used mustard gas against demonstrators, The mustard gas claim, while very unlikely, shows the extremes to which websites will go in making claims against the regime.

The Baztab website on 10 July described "sporadic demonstrations" at Daneshju Park, Inqilab Square, Kargar Avenue, Keshavarz Boulevard, Laleh Park, and Square One in Tehran Pars. The website also described "sporadic demonstrations" in Bandar Abbas, Bandar Lengeh, Bojnurd, Falavarjan, Karaj, Mahabad, Masjid-i Suleiman, Shiraz, and Zarqan.

These inconsistencies can to some extent be ascribed to Western journalists' reliance on witnesses who seem incapable of making accurate crowd estimates, rather than getting the story themselves. Given the difficulty in getting and keeping press accreditation, it is possible that the journalists are reluctant to risk irritating the Iranian government. The situation for journalists of Iranian origin, even if they are citizens of other countries and are working for foreign news organizations, is particularly dangerous (see the case of Canadian photojournalist Zahra Kazemi, below). Some observers may feel that the journalistic standards of the exile media are open to debate, and that some exile media organizations could be pursuing an agenda that is served by spreading stories of mayhem in Iranian streets.

The ultimate responsibility for the absence of reliable and accurate information, however, lies with the Iranian regime, which imposed a news blackout. As of 7:30 a.m. Tehran time on 10 July, domestic Iranian broadcasting carried no news of the previous night's events. This continued to be the case into the evening of the same day.

Jamming of Persian-language satellite-television stations intensified on 6 July, when VOA Television began broadcasting a new program to Iran. The broadcasts of Los Angeles-based Persian-language satellite-television stations, such as Pars TV, Channel 1 TV, NITV, and Azadi TV, were also jammed and could not be received in Iran (the jamming, which involves the direction of interfering signals at the Telstar-12 satellite used by these stations to reach Iran, appears to originate in Cuba, MSNBC reported on 11 July; Mobile-telephone service in parts of Tehran allegedly was shut down, too. The websites of the news agencies ISNA, Baztab, Mehr, and Fars were not updated during the night, and although it was updated regularly the official Islamic Republic News Agency (IRNA) carried no news about the unrest.

The reformist Iranian print media complained that it was acting on a government directive that forbade reporting about the events of the previous day. A 10 July editorial in "Yas-i No" apologized because it could not mention "a single word about the 9 July anniversary of that regrettable and criminal event." It said, "Every reference to 9 July, except the date of publication, had to be removed because of the imposed restrictions." "Yas-i No" added that the other reformist newspapers had acted similarly on 9 July, whereas hard-line dailies like "Kayhan" and Resalat" had ignored the government directive.

As if in confirmation of the regime's dissimulation about its actions earlier, Ali Talai, an official from the Tehran Governorate-General's political-security affairs directorate, said on 12 July that 250 people were arrested on 18 Tir, ISNA reported. More than 80 of these people have been released, he said, and more detainees would be released soon. This would seem to contradict Rezai-Babadi's 10 July statement about the involvement of a few dozen people in limited disturbances. (Bill Samii)

MAINSTREAM IRANIAN STUDENT ORGANIZATION CANCELS SIT-IN. Reza Ameri-Nasab, of the majority Allameh wing of the Office for Strengthening Unity student organization, said on 9 July that it cancelled its sit-in at the UN office in Tehran, ISNA reported. "We shall hold a news conference later to explain our reasons for canceling the sit-in," he said. Ameri-Nasab had announced on 5 July that all 30 members of the Allameh wing's central council would participate in the sit-in, and in June he declared that his group is determined to act on 9 July (see "RFE/RL Iran Report," 7 July 2003).

In a letter to the Office for Strengthening Unity, parliamentarians Fatimeh Haqiqatju, Meisam Saidi, Ali Akbar Musavi-Khoeni, Reza Yusefian, and Ali Tajernia asked the students to refrain from demonstrating or staging a sit-in on 9 July so the students' demands could be addressed in a calm atmosphere, ISNA reported. The letter sought to reassure the students by telling them that their parliamentary representatives would do everything in their power to follow up on issues such as securing the release of detained students.

The wisdom of heeding that advice was revealed when armed vigilantes seized the three student representatives -- Ameri-Nasab, Arash Hashemi, and Ali Muqtadari -- after their press conference, the Iranian Labor News Agency (ILNA) and Reuters reported. As police stood by, the vigilantes pushed the three into waiting cars and sped away. Other students took shelter and said that they would not come out until parliamentarians arrived to guarantee their safety. Witnesses cited by Reuters said that security forces posted outside the UN headquarters prevented photographers and camera crews from filming the scene.

Ali Akbar Mohseni, the Ministry of Science, Research & Technology official in charge of security, said on 11 July that, as far as he knew, prosecutor's office personnel arrested the student representatives, ISNA reported. (Bill Samii)

STUDENT ASSOCIATIONS CALL FOR TRANSPARENT TRIALS. Some 306 student associations from Iranian universities issued a statement on the eve of the 18 Tir anniversary, ISNA reported on 8 July. The statement noted that in addition to the police, the "principal masterminds" responsible for the 9 July 1999 attack on the Tehran University campus are "a group of [foreign] affiliated graduates and students from a certain student association" (in other words, reformists and members of the Office for Strengthening Unity). The statement charged that these individuals -- the reformists -- played on public anger over the sham trial of the individuals who attacked the university dormitory to get themselves elected to the parliament (for more on the trial, see "RFE/RL Iran Report," 6 March, 5 June, and 17 July 2000).

The statement went on to criticize the politicization of the campus: "Unfortunately, a number of political currents affiliated to America and certain politicized elements see the university as a place for political games and students as a ladder up to power." To avoid the repetition of this pattern, the statement urged the judiciary to deal with the results of the June 2003 unrest in a transparent manner and with a public trial. The associations that issued the statement were not identified by ISNA.

Mr. Ahmadi, the deputy interior minister for security affairs, announced on 8 July that all the rioters and law-breakers involved with the June unrest had been "identified, rounded up, and brought under control," as reported on state television.

Tehran chief prosecutor Said Mortazavi had announced on 7 July that an indictment for 65 people who allegedly were involved in the unrest in the country in June has been submitted to the Revolutionary Court, Iranian state radio reported. The cases of 317 people who were arrested have been dealt with already, he said. Mortazavi met earlier that day with student representatives who called for the speedy release of their colleagues, ISNA reported. He promised to release some students as soon as possible. The student groups' headquarters of the supreme leader's representative office at the universities organized this meeting.

Seyyed Kazem Musavi-Nejad, the head of the Shahid Beheshti University's Islamic Students Association, said on 7 July that the court summons for the university's students has been revoked, ISNA reported. The status of one student, Peyman Sharifi, is unknown, he added. (Bill Samii)

MILLIONS OF IRANIANS ABUSE DRUGS. Mohammad Hussein Khademi, director of the Public Relations and International Affairs Department of Iran's Drug Control Headquarters (DCHQ), announced on 7 July that 3 million Iranians out of a population of approximately 67 million "have addiction problems," IRNA reported. This marks a significant increase, because Iranian officials had been saying that the country is home to some 1.2 million drug addicts and 600,000 drug abusers, although former DCHQ chief Mohammad Fallah had suggested that the real figures could be much higher because most drug abusers try not to be identified as addicts in order to avoid stigmatization.

The injection of narcotics is seen as a major cause of HIV/AIDS in Iran.

Bijan Faramarzi, the deputy chief for Health and Medical Treatment Affairs at the Iranian Prisons Organization, said during a 6 July seminar that more than 70 HIV monitoring facilities are operating in Iranian correctional facilities, IRNA reported. A sample of 200-450 inmates is tested at every institution with a population of 1,000 or more. HIV is usually spread in the prisons through the sharing of contaminated needles for intravenous drug use. According to IRNA, more than 30,000 Iranians are HIV-positive.

Health Ministry official Mohammad Mehdi Guya said in February that 4,424 people in Iran have AIDS, but in May he said that fewer than 1,900 people have the disease (see "RFE/RL Iran Report," 3 March and 26 May 2003). (Bill Samii)

U.S. STATE DEPARTMENT EXPLAINS IRANIAN 'DEMOCRACY.' U.S. State Department spokesman Richard Boucher was called on during a 7 July press briefing to explain U.S. officials' statements about the Iranian political system and the democratic status thereof, according to the Bureau of International Information Programs website ( Boucher said: "We certainly have seen elements of democracy. We've certainly seen some democratic voting, democratic processes in Iran. But we also know that the Iranian people are calling for much more democracy and for real democracy and open democracy. So that remains the area where we express our support."

The press inquiry resulted from comments made in February by Deputy Secretary of State Richard Armitage, who described Iran as a "democracy," and by Secretary of State Colin Powell's description of President Mohammad Khatami as "freely elected" during a 2 July radio interview (see "RFE/RL Iran Report," 24 February and 7 July 2003).

A reporter asked Boucher if he had a message for the students who do not think that Khatami is freely elected and who are likely to demonstrate on 9 July. Boucher responded: "Our message has been and remains that we support democracy in Iran, like we support it everywhere; that we believe that the calls of the Iranian people, including the students who are demonstrating, need to be listened to, need to be heeded; and that the kind of change that they are asking for would be good for Iran and good for Iran's place in the world." (Bill Samii)

'DAY OF GLOBAL ARROGANCE' TO BECOME DAY OF DIALOGUE. Iran's Supreme Council of Cultural Revolution decided at a recent session that the annual commemoration of the 1979 seizure of the U.S. Embassy, known as the "Day of Global Arrogance," will be known as the "Day of Dialogue Among Civilizations," the Baztab website reported on 3 July. But the issue is not that simple and is turning into another dispute between the executive and legislative branches.

Conservative Hashtrud parliamentary representative Mohammad Shahi-Arablu said on 5 July that this is the right response to what he sees as America's warmongering policy, ILNA reported. "In order to fight world arrogance today it is necessary to use a language of dialogue and not military equipment," he added.

Yadollah Islami, who is a member of the Association of Present and Former Representatives of the Parliament, said on 5 July that changing a day's title is up to the legislature, ILNA reported. "Changing the name of the 'day of struggle against world arrogance' to the 'day of dialogue among civilizations' by the Supreme Council of Cultural Revolution is illegal," he said. Nor is the U.S. the only arrogant country, according to Islami. "If this world arrogance changes we should not think that America is now rational or that the Satan has turned into an angel, [but] it is possible that certain elements within it have improved." (Bill Samii)

IRANIAN PRESIDENT MENTIONS QUITTING, AGAIN. President Hojatoleslam Mohammad Khatami said during a 10 July speech in the city of Karaj that if the public is displeased with his government it would step aside, IRNA reported on 11 July. "If the nation says we do not like [you], we will quit. A society should be so," he said. Khatami said that the government serves the people, not the other way around. Khatami criticized exploitation of revolutionary and religious values for factional purposes, urged people to vote in the Spring 2004 parliamentary election, and vowed that the government is campaigning against economic problems such as rising prices, inflation, and unemployment. (Bill Samii)

TEHRAN RESPONSIBLE FOR DEATH OF CANADIAN JOURNALIST. Canadian photojournalist Zahra Kazemi died of a cerebral hemorrhage in the evening of 11 July, Ministry of Islamic Culture and Guidance official Mohammad-Hussein Khoshvaqt announced the next day, according to IRNA. Reporters Without Borders (RSF) Secretary-General Robert Menard said, "We hold the Iranian authorities responsible for the death of Zahra Kazemi," and he said that the authorities did not furnish her with adequate medical attention after arresting her.

Kazemi's family said she was taken into custody on 23 June after photographing Evin Prison, "The Toronto Star" reported on 10 July. Kazemi's son said at the time that his mother was in a coma and showed signs of having been severely beaten after being taken into custody and accused of espionage.

Canadian Department of Foreign Affairs spokesman Reynald Doiron said that as of 9 July the Iranian government had not responded to an official demand for an explanation for the arrest. Canadian officials who went to Baghiatollah Hospital in Tehran were only allowed to view Kazemi through a plate-glass window, "The Globe and Mail" reported on 9 July. "We couldn't tell whether she was just plain unconscious, or in a coma, or sleeping," Doiron said. (Bill Samii)

ABDUCTED IRANIAN JOURNALIST REAPPEARS. Payman Pakmehr, formerly a correspondent for the banned daily "Nasim-i Sabah" and the banned weekly "Ahrar-i Tabriz," returned to his home on 4 July, 48 hours after being attacked and kidnapped by unidentified individuals, according to a 10 July Reporters Without Borders (RSF) announcement. His disappearance occurred shortly after he reported on a gathering at the Babak Castle near the East Azerbaijan Province town of Kelidar for the annual commemoration of Babak Khorramdin, one of the first popular Persian leaders to oppose the imposition of Islam and Arab rule (see "RFE/RL Iran Report," 7 July 2003).

Meanwhile, Tabriz journalist Ensafali Hedayat returned home on 12 July, RSF reported. He was detained by vigilantes while reporting on disturbances at the campus of Tabriz University in mid-June and had not been heard from since that time (see "RFE/RL Iran Report," 23 June 2003). (Bill Samii)

IRANIANS RESENT IAEA VISIT, PRESSURE. International Atomic Energy Agency (IAEA) Director-General Muhammad el-Baradei arrived in Iran on 9 July for a one-day visit, Iranian state radio reported. Prior to his departure from Frankfurt, el-Baradei said that he intends to encourage Tehran to sign the Additional Protocol of the Nuclear Non-Proliferation Treaty (NPT), which permits more intrusive inspections of nuclear facilities. The international pressure on Iran to sign the additional protocol is creating resentment over what is perceived as an attack on Iranian sovereignty and the right to self-defense.

El-Baradei met with Iranian Foreign Minister Kamal Kharrazi and afterwards described their talks as "positive and constructive," IRNA reported. "We believe it is only through this framework that Iran has a right to use nuclear energy and related technology for peaceful purposes," he said.

Kharrazi also commented positively on the discussion and told reporters that el-Baradei's visit promoted Iranian cooperation with the IAEA, IRNA reported. Kharrazi wondered aloud why Israel is not being pressured to sign the NPT, whereas Iran, which already is an NPT signatory, is being pressured to sign the additional protocol.

President Mohammad Khatami said when he met with el-Baradei that there is no place for weapons of mass destruction in Iran's defensive strategy and Iran does not need such weapons, IRNA reported. Khatami said the criticism of Iran is based on its pursuit of independence, and any knowledge in the use of nuclear energy is home grown.

There seems to be little enthusiasm in Iran for signing the additional protocol. Iranian government spokesman Abdullah Ramezanzadeh on 6 July attempted to explain Iranian reluctance to sign it, saying that although Iran is a signatory of the NPT it has lost confidence in it because developed countries have not fulfilled the treaty's provision to supply nuclear technology to other countries, IRNA reported. He said it is therefore up to the developed countries to rectify the situation. "Since the states possessing nuclear technology failed to gain Iran's confidence, Iran needs to hold detailed talks about the Additional Protocol to make sure that Iran will receive technology to go ahead with its program to generate electricity from nuclear energy," Ramezanzadeh said.

Ahmad Azimi, the Shiraz parliamentary representative and a member of the legislature's Energy Committee, said on 6 July that it is too late to demand concessions in exchange for signing the additional protocol, ILNA reported. "If Iran had thought of signing the Additional Protocol earlier it could have asked for certain concessions from the international community," he said. "But now it is not the time to get any serious concession -- although it is possible to remove the danger that is threatening the country by signing the protocol."

Akbar Alami, a parliamentary representative from Tabriz who serves on the National Security and Foreign Relations Committee, said on 8 July that signing the protocol would serve countries such as Israel and deprive Iran of its right to self-defense, the Fars News Agency reported. Alami said that Iran should not sign the agreement if it does not gain anything. Iran should sign only if other countries do so and if a weapons of mass destruction-free Middle East is created. Furthermore, Alami said, "those countries that possess nuclear weapons must provide the necessary technology for the construction of nuclear reactors to us so that we can use such technology for peaceful purposes."

Hassan Almasi, who represents Parsabad in the legislature, charged that the IAEA is acting under U.S. pressure and is actually helping the U.S. pursue its (unidentified) objectives, ISNA reported. Speaking about el-Baradei's visit, Almasi said, "Such visits are not undertaken for the purpose of serving the interests of countries like Iran. In fact, they are aimed at serving the interests of America and a number of other countries and they are within the limits of the pre-condition or pre-conditions set by America."

Taha Hashemi, the managing editor of the "Entekhab" daily newspaper, told ISNA on 8 July that el-Baradei's visit is the result of American pressure. Hashemi said that Iran's allies have backed away from assisting Iran because of U.S. pressure on them, so Iran should not give them a pretext for doing so. Hashemi said, "We should assure [el-Baradei] that Iran's nuclear activities are peaceful."

Hashemi said that by signing the protocol Iran would be in a position to present its own views about Israeli nuclear activities. This issue is the Achilles heel of the IAEA and the U.S., Hashemi said. "One of America's weaknesses is that a terrorist regime such as that of Israel, which is totally expansionist and racist, has the capability to manufacture nuclear weapons," Hashemi added.

An IAEA delegation of experts is due to arrive in Tehran next week for technical discussions, Iranian state radio reported on 9 July. (Bill Samii)

TEHRAN, RIYADH DISCUSS AL-QAEDA EXTRADITIONS. Iranian judiciary head Ayatollah Mahmud Hashemi-Shahrudi arrived in Jeddah on 5 July and then headed to Riyadh to hold discussions on terrorism and the presence of U.S. forces in the region, and to sign a memorandum of understanding on judicial cooperation, IRNA reported. IRNA also cited "Saudi media" as saying that Hashemi-Shahrudi's trip is connected with Saudi efforts to secure information on Al-Qaeda personnel who are allegedly imprisoned in Iran. The Baztab website on 6 July also cited the Internet portal "Hi Pakistan" ( and the "Bahrain Tribune" newspaper as reporting that Shahrudi's trip is connected with discussions on extraditing those Al-Qaeda personnel. Saudi Interior Minister Prince Nayif bin Abd al-'Aziz al-Sa'ud confirmed in the 4 July issue of "Al-Sharq al-Awsat" that the extraditions would dominate the discussions. ISNA reported on 28 June that the two sides have signed an extradition agreement.

Hashemi-Shahrudi met with King Fahd bin Abd al-'Aziz al-Sa'ud on 6 July, according to Iranian state radio, and at a meeting with Crown Prince Abdullah he discussed Tehran-Riyadh relations, Iraq, Israel/Palestine, and strengthening the two sides' "common positions in the face of the onslaught launched by the enemies of Islam."

Foreign Ministry spokesman Hamid Reza Assefi said on 7 July that Hashemi-Shahrudi is expected to discuss many topics during his trip to Saudi Arabia, but the extradition of Al-Qaeda personnel is not on the agenda, IRNA reported. (Bill Samii)

KHATAMI DEFENDS ECONOMIC RECORD AMIDST QUESTIONS ABOUT BANKING SYSTEM. Iranian conservatives have attempted to shift the focus from disquiet over political and legislative issues to public dissatisfaction with the Iranian economy, and President Hojatoleslam Mohammad Khatami and his reformist backers are fighting back. Indeed, the country's banking system and the economy's regulatory apparatus have undergone changes in the last couple of years, yet many Iranians are worse off now than they were before the 1979 revolution. As one Tehran resident said recently, "Before the revolution, I ate meat every day. Today, I eat it only once a week," "The Washington Post" reported on 8 July.

The conservatives' economic criticisms were attacked in an 8 July report in the "Yas-i No" newspaper. The reformist daily opened by saying that complaints about recent hikes in the prices of bread, sugar, train tickets, potatoes, milk, chicken, and others ignore the fact that "most of those price rises were within the framework of the five-year [development] plan that had been approved by all the leading figures of the system, and not only by Khatami's government." The "Yas-i No" report noted that the right-wing press first brought up the issue in late May, and this trend continued through June in publications such as "Entekhab," "Jam-i Jam," "Jomhuri-yi Islami," "Kayhan," "Resalat," and "Siyasat-i Ruz." False rumors about the "privatization" of the universities led to the clashes and unrest of June, according to "Yas-i No."

(The term "privatization" is inaccurate; Science and Technology Minister Mustafa Moin had explained that under a proposed plan some master's degree programs would be opened to fee-paying students; see "RFE/RL Iran Report, 16 June 2003.)

In a speech on 7 July, President Mohammad Khatami said that his political rivals are portraying the economic situation in Iran inaccurately and the level of foreign investment indicates economic development, IRNA reported. "Some dignitaries are taking the tribune of sacred Friday prayers to voice bitter criticism against the government. They speak in the name of religion to accuse the government system in the worst possible manner."

Khatami was referring to Ayatollah Mohammad Taqi Mesbah-Yazdi's pre-sermon speech on 4 July. Mesbah-Yazdi had said in that 4 July speech that the economy is unhealthy and the state is usurious, ILNA reported. Mesbah-Yazdi dismissed positive foreign reports about Iran's economy as being motivated by profit and the pursuit of domination, "Yas-i No" reported on 6 July.

Reformist journalist Mashallah Shamsolvaezin summarized the thoughts of many observers when he remarked, "The best and greatest service he [Mesbah-Yazdi] can render to Islam, Muslims, the Islamic Republic system, the theological seminaries, and Twelver Imam jurisprudence is to choose the policy of silence," "Yas-i No" reported on 6 July. Shamsolvaezin added, "History will consider Mesbah Yazdi's silence a service to Islam."

Tehran parliamentary representative Hojatoleslam Majid Ansari offered a less insightful but more analytical and fact-based commentary on Mesbah-Yazdi's observations. Ansari said that Iran has achieved 8 percent growth over the last three years and investment has increased by 13 percent during the same period, "Yas-i No" reported on 6 July. He described a series of government actions that may have facilitated this growth, including exchange-rate unification, tax-law reform, encouragement of foreign investment, privatization, simplification of customs regulations, and other measures. Ansari described Mesbah-Yazdi as uninformed. Ansari said that Iran has never sought nor received a loan from the International Monetary Fund (IMF), but even if it had, IMF loans are among the world's least expensive.

Government spokesman Abdullah Ramezanzadeh, meanwhile, addressed the accusation of usury during his 6 July press conference, ISNA reported. "The Islamic banking law was approved during the era of the Imam [Ayatollah Khomeini], may his noble soul be sanctified in paradise. All the Guardian Council jurisconsults approved it as well."

Economist Jahangir Amuzegar discussed developments in the Iranian banking sector in the 18 February 2002 issue of "Middle East Economic Survey." Before the 1979 revolution some 36 state, private, joint venture, and foreign banks operated in Iran. In May 1979 these institutions were nationalized and reorganized into six commercial and three specialized banks. A Usury-Free Banking Act was ratified in August 1983 and went into effect in March 1984. This measure reflected the influence of Islamic Marxists in the government, with the result that interest paid to bank depositors became known as the "provision rate of profit" and the interest paid by borrowers became known as the "minimum expected rate of profit on granted facilities." Amuzegar termed such practices an "Islamic charade."

The state's ownership of the banking system brought on other problems, according to Amuzegar. For example, individuals selected on ideological grounds more than for professional qualifications ran the banks. Banks became overstaffed and were run by inexperienced and risk-averse managers. The Central Bank, furthermore, controlled even the routine operations of the banks. This situation led to the creation of a parallel system of moneylenders and speculators in the bazaar. The December 2001 licensing of the first full-service private bank -- Bank Karafarin -- profoundly changed this state-dominated system, Amuzegar writes.

Changes like this may seem impressive to economists and international lenders, but it appears that their impact has yet to trickle down to the Iranian public. Ali, who is forced to work two jobs, told "The Washington Post" reporter Afshin Molavi, "Our economy is a mess. The prices of meat, housing, cars, everything, is overwhelming. I have given 27 years of my life to serving the army, and I am reduced to misery. I barely eat meat once a week, but our government officials are eating the finest kebabs day and night. This is outrageous." It is people like Ali who joined student demonstrators last month in Tehran and drove around honking his car horn in sympathy with their grievances. (Bill Samii)

OPPRESSED AND DISABLED FOUNDATION MAKES DEAL IN MOSCOW. Mohammad Foruzandeh, the head of the Oppressed and Disabled Foundation (Bonyad-i Mostazafan va Janbazan, [MJF]), and Aleksei Miller, the CEO of Russia's Gazprom, met in Moscow on 7 July, IRNA reported. The main topics of discussion included joint activities in the South Pars gas field, the formation of joint companies to export gas, and the review of a 10-year agreement on cooperation in the construction of gas rigs and the excavation of gas wells.

Foruzandeh last visited Russia in April, and in a meeting with Russian Energy Minister Igor Yusufov expressed an interest in bilateral cooperation in the energy sector, Interfax reported on 9 April. Foruzandeh proposed Russian participation in the building and modernization of regular-cycle thermal-power plants and gas-operated combined-cycle plants, the supply of Russian oil and oil products to northern Iran, and activities in South Pars. Foruzandeh also met with Russian State Duma Deputy speaker Vladimir Zhirinovskii and Union of Oil and Gas Producers Chairman Yurii Shafranik, according to IRNA on 9 April.

A parastatal organization, the MJF's value is estimated to exceed $10 billion and it is Iran's second largest commercial enterprise after the National Iranian Oil Company. The MJF specifically has been connected with the vigilante group known as the Ansar-i Hizbullah and some of its business enterprises serve as fronts for the Iranian government's efforts to acquire prohibited military goods. Such foundations and similar businesses have come to dominate the Iranian economy, according to a report on "Millionaire Mullahs" in the 21 July issue of "Forbes" magazine ( (Bill Samii)

TOKYO STILL KEEN ON IRANIAN OIL-FIELD PROJECT. Japanese Trade and Industry Minister Takeo Hiranuma denied on 11 July that Moscow has proposed that it and Tokyo jointly develop Iran's Azadegan oil field, Kyodo World Service reported. Citing anonymous "industry sources," the 10 July "Financial Times" reported that as part of the joint development deal, Russia would build a pipeline from Siberia to the Sea of Japan. The "Financial Times" also reported that Russia and China are offering to develop the Azadegan oil field.

Under pressure from Washington, Tokyo announced on 1 July that it will not sign a contract for the Azadegan oil-development project if Tehran fails to address international concern about its nuclear activities (see "RFE/RL Iran Report," 7 July 2003).

Tehran reacted to Tokyo's stance by announcing on 7 July that it reserved the right to enter negotiations with other parties. Iranian Foreign Ministry spokesman Hamid Reza Assefi said that Iran could look elsewhere because the preferential deadline of 30 June had expired without Japan finalizing the deal, but, "Japan has not been ruled out yet and Japanese are still continuing negotiations," IRNA reported on 7 July.

It is probably not a coincidence that the Japanese Embassy in Tehran announced on the same day that a delegation led by Yukia Amano, the Japanese Foreign Ministry's director-general for arms control and scientific affairs, will arrive in Tehran on 12 July to discuss disarmament and nonproliferation, according to IRNA on 7 July. According to the Kyodo news agency on 7 July, Amano will try to persuade Iran to eliminate suspicions about its possible nuclear-weapon development program, and he will reiterate Tokyo's desire that Tehran sign the Additional Protocol of the Nuclear Non-Proliferation Treaty. An anonymous "senior Japanese Foreign Ministry official" said, "If we can gain transparency regarding the nuclear suspicions, we want to move forward with the negotiations [for the Azadegan project]." (Bill Samii)

WASHINGTON ACTS AGAINST FIRMS SUSPECTED OF INVOLVEMENT WITH IRANIAN MILITARY. The Defense Criminal Investigative Service (DCIS) and the Department of Homeland Security's Bureau of Immigration and Customs Enforcement (ICE) on 10 July executed search warrants on 18 U.S. companies in 10 states in connection with an investigation regarding the illegal transfer of military components to Iran, the Defense Department announced ( The companies are suspected of exporting -- without obtaining the appropriate licenses from the State Department -- components for the F-4 Phantom, F-5 Tiger, and F-14 Tomcat aircraft, and for the Hawk missile system. The components allegedly were shipped to the London-based Multicore Limited, which has ties to the Iranian armed forces.

Two Multicore shareholders, Said Homayouni, an Iranian-born Canadian, and Yew Leng Fung, a Malaysian, pleaded guilty in June 2001 to conspiring to ship restricted parts for military aircraft to Iran (see "RFE/RL Iran Report," 18 June 2001). Information provided by the British authorities in August 2002 to DCIS and ICE revealed which U.S. companies continued to do business with Multicore London even after raids on Homayouni and Fung's facilities in Bakersfield, California. Officials at the some of the companies denied involvement with the shipment of goods to Iran and officials at other companies denied doing business with Multicore, AP reported on 11 July.

The U.S. State Department announced on 3 July that five Chinese firms and one North Korean firm have been sanctioned for violating the Iran Nonproliferation Act of 2000 and other laws on missile nonproliferation, the Bureau of International Information programs reported ( All but one of the companies has been sanctioned before. It is not clear what the companies in this case allegedly sold to Iran. (Bill Samii)

TEHRAN TESTS MISSILE BEFORE DELIVERY TO CUSTOMER. Israeli Foreign Minister Silvan Shalom said on 4 July that "The radical regime in Iran is threatening the stability not only of the state of Israel, but the European countries also," "Ha'aretz" reported on the same day. His comments were connected with the Israeli newspaper's earlier publication of a report that in the previous week Iran had its most successful test of the Shihab-3 missile. (On earlier and less successful tests, see "RFE/RL Iran Report," 28 October 2002.)

The Shihab-3 medium-range ballistic missile is said to have a range of 1,300 kilometers and to be based on reverse engineering of the North Korean No Dong missile, according to a December 2001 National Intelligence Estimate titled "Foreign Missile Developments and the Ballistic Missile Threat Through 2015."

Iranian Foreign Ministry spokesman Hamid Reza Assefi was nonchalant when asked about the missile on 7 July, saying that the missile has been tested before and the new test preceded its delivery to the military, state radio reported. Moreover, according to AFP, he said, "This is nothing new. Apparently the Israelis are a bit late with their information."

Iranian Minister of Defense and Armed Forces Logistics Admiral Ali Shamkhani said on 9 July that the test was conducted in the presence of a customer prior to delivery, the Baztab website reported, citing ILNA. Shamkhani said that this is a normal practice. (Bill Samii)

IRAN BECOMING A BANANA REPUBLIC. Agriculture Jihad Minister Mahmud Hojjati said on 6 July that Iran produced 80,000 tons of bananas, a 50 percent increase in yield over the previous year, IRNA reported. The bananas are grown outdoors and in greenhouses, and the country's main banana cultivation areas are Gilan, Hormozgan, Kerman, and Sistan va Baluchistan Provinces. (Bill Samii)

PROTESTORS STORM IRANIAN EMBASSY IN OSLO. Hussein Shirazi, the Iranian ambassador to Norway, was rushed to the hospital with chest pains on 9 July after demonstrators attempted to storm the embassy and his residence with sticks and weapons, AFP reported on 10 July. An anonymous Iranian diplomat was quoted by AFP as saying, "It seems as though he has heart problems." The source said protestors from the Mujahedin Khalq Organization (MKO) "came with sticks and weapons and tried to storm the building, banging on the door and trying to get in." The embassy alerted local police, who dispersed the protestors. An MKO representative told AFP that his group was not involved in the protest and that the Iranian diplomat's claims were "absolutely false."

The Iranian Foreign Ministry summoned the anonymous Norwegian charge d'affaires on 12 July and protested to him, IRNA reported. An anonymous Iranian official demanded compensation for the damage and called on Oslo to prevent similar incidents in the future. (Bill Samii)