Iran Report: June 17, 2002

IRAN DISCUSSES AFGHANISTAN'S LOYA JIRGA. Iranian state radio's Dari broadcast from Mashhad on 9 June said that "hope and expectation" is in the air in Kabul, as people look forward to the Loya Jirga, or grand assembly, that is scheduled to begin on 10 June. Mashhad radio said that when stability and better conditions return to Afghanistan, the international community will provide the assistance it has promised. The Loya Jirga's commencement, however, was delayed by one day. On announcing this news on 10 June, Iranian state television reported from Tehran that former monarch Mohammad Zahir had announced that he was ready to accept the most senior position in Afghanistan. Tehran TV told its viewers that, according to the Bonn accords, Zahir Shah's role would be limited to opening and presiding over the Loya Jirga. Afghan Defense Minister Mohammad Fahim had said that there is no place for a monarchy in Afghanistan, according to Tehran TV, and he stressed, "The future Afghan government will be an Islamic republic."

Indeed, a majority of the Loya Jirga's 1,501 delegates wanted Zahir Shah to lead the country and signed a petition to this effect, "The Guardian" reported on 11 June, and Zahir Shah's relatives were drumming up support for him. This development prompted U.S. special envoy Zalmay Khalilzad and Afghan interim administration chief Hamid Karzai to urge Zahir Shah to endorse Karzai publicly. Khalilzad also blamed the local services of the BBC and VOA for "sowing consternation and confusion among delegates" by broadcasting alleged statements from the former monarch about his candidacy.

Zahir Shah on 11 June renounced any ambitions to head the Afghan government. "I do not intend to restore monarchy. I just want to serve our people and our country." The former monarch went on to endorse Karzai, "I would like to extend my appreciation to the leader of the interim government, Hamid Karzai, for his services and achievements in this short period of time and personally confirm that I support his candidacy as the leader of the future transitional government."

Former President Burhanuddin Rabbani also renounced any claims to the presidency and endorsed Karzai. He said on 11 June, "I have also agreed to introduce Chairman Karzai as the sole candidate of the Loya Jirga."

The Loya Jirga on 13 June elected Karzai as Afghanistan's head of state. He won 1,295 votes out of a total of 1,575 ballots cast. The ethnic makeup of his cabinet could become a divisive issue. There is a possibility that women will play a bigger part in his cabinet, too. Karzai said on 13 June, "In this country we have to respect our sisters and mothers, and let them study and work in accordance with our Islamic rules and traditions. It is happening in other Islamic countries -- look at Iran, look at other countries."

President Mohammad Khatami telephoned Karzai and offered his congratulations, IRNA reported on 14 June. "We have always been seeking stability, security, and construction in Afghanistan and will not fail to help the Afghan government and nation in this respect," Khatami said. (Bill Samii)

TURKISH PRESIDENT TO VISIT TEHRAN. Turkish President Ahmet Necdet Sezer is to arrive in Tehran on 17 June for an official visit, IRNA reported on 10 June, and on 18 June Sezer will visit Tabriz. Just a few days before the announcement about the visit, Turkish Foreign Ministry spokesman Hussein Dirioz complained about Iran's testing of its Shihab-3 missile, according to Anatolia news agency on 5 June. "We would like to remark one more time that Iran's efforts to proliferate these missiles and increase their ranges do not contribute to regional or global security and stability," he said. Other recent tensions relate to gas supplies from Iran and Turkish concern that Tehran backs Islamists and the Kurdistan Worker's Party (PKK; also known as the Congress for Freedom and Democracy in Kurdistan, or HADEK, after a recent name change) (see "RFE/RL Iran Report," 15, 22, and 29 April 2002). (Bill Samii)

IRAN-UAE RELATIONS CONTINUE TO DEVELOP. Emirate of Ras al-Khaymah's Crown Prince (deputy ruler) Sheikh Khalid Bin-Saqr Al-Qasimi said on 9 June that the time has come for Iran and the United Arab Emirates to discuss a mutual solution on the disputed islands of Abu Musa and the Greater and Lesser Tunbs, Tehran radio's English-language service reported on 10 June. Sheikh Khalid went on to say that resolution of this issue is one of the main reasons for UAE Minister of State for Foreign Affairs Sheikh Hamdan Bin-Zayyid Al Nuhayyan's recent visit to Iran (see "RFE/RL Iran Report," 27 May 2002). At the 10 June opening ceremony of a trade fair in Tehran, furthermore, UAE Ambassador to Iran Khalifah Shahin al-Marri said that Tehran-Abu Dhabi cooperation will guarantee Persian Gulf security, IRNA reported. Al-Marri said that Sheikh Hamdan's visit to Tehran was an indication of the mutual interest in improving the two states' relations. Al-Marri added that the Emirates' businessmen are eager to invest in the Iranian market in light of Iranian legislation on foreign direct investment.

Iran and the UAE have developed a new framework to deal with the island dispute, Tajeddin Abdulhaq wrote in "Al-Sharq al-Awsat" on 10 June. It has been agreed to remove the issue from the media spotlight and return it to where it was prior to Iran's unilateral declaration of sovereignty over Abu Musa in 1991; and it has been agreed to avoid the issue in international forums so bilateral contacts can produce a mutually acceptable solution.

By agreeing to abide by a 1971 Memorandum of Understanding, "Al-Sharq al-Awsat" reported, Tehran has agreed to reverse all its unilateral steps, which means that Tehran has conceded that sovereignty over the islands is still under dispute. Moreover, Tehran must reverse its decision on appointment of a military governor to the islands, and it must transfer to joint use the military airfield it built, reduce its military presence, and stop holding military exercises on or near Abu Musa. (Bill Samii)

PALESTINIAN ISLAMIC JIHAD DENIES IRANIAN FUNDING. An "authoritative source" in the Palestinian Islamic Jihad (PIJ) rejected an earlier report in a London Arabic daily that it receives funds from Iran, "Al-Sharq al-Awsat" reported on 9 June. A PIJ statement went on to say that if U.S. and Israeli intelligence sources actually could obtain such information from PIJ files, they could have prevented the 6 June suicide bombing in Megiddo.

"Al-Sharq al-Awsat" had reported on 8 June that PIJ Secretary-General Ramadan Abdallah Shallah met with Iran's supreme leader, Ayatollah Ali Khamenei, at least two times during his visit to Iran for the early-June Intifada conference (on the conference, see "RFE/RL Iran Report," 3 June 2002). At these meetings, promises were made that the PIJ's budget would be increased by 70 percent and made distinct from Hizballah's budget. The Iranian contribution to Hizballah's budget exceeds $200 million, according to "Al-Sharq al-Awsat," whereas other estimates are much lower. Citing a source in Iran's Islamic Revolution Guards Corps, "Al-Sharq al-Awsat" reported that the IRGC's Qods Force will continue to train PIJ personnel in Iran.

Although the PIJ denies that it gets funding from Tehran, it acknowledges Iranian support. Abu Jihad, the PIJ representative in Tehran, expressed his group's appreciation of such backing in the 1 June "Jomhuri-yi Islami" newspaper. Abu "We are grateful for the support of the Muslim nation of Iran for the Palestinian Intifada," Jihad said. In other parts of the interview, he said that "martyrdom operations" will continue because the Palestinian people have chosen this means of resisting occupation.

A few days earlier, Abdallah Qasir, a Hizballah deputy in the Lebanese legislature, discussed his organization's relationship with the PIJ, Hamas, and Tehran. Regarding the PIJ and Hamas, he said, according to London's "Al-Zaman" on 29 May, "There is in fact coordination but this does not reach the point of full integration because each party has its own leadership. There are also differences in the two arenas' conditions." As for Tehran, he said, "Hizballah does not deny its good relations with Iran.... This is not the relationship between a master and a subordinate because, contrary to the U.S. propaganda's claims that Hizballah is subordinate to Iran, the party's decision is 100 percent independent and taken by the party's Shura Council, which consists of seven members." (Bill Samii)

TEHRAN BEGINS HEBREW BROADCASTS. The Islamic Republic News Agency announced on 10 June that Iran would begin a thirty-minute daily Hebrew-language short-wave radio program called the "Voice of Davud" on 11 June. IRNA explained that the program is meant to "provide accurate information to peoples and oppose the one-sided news monopoly." Tehran also supports the Voice of the Palestinian Islamic Revolution and the Voice of the Al-Aqsa Intifada from Tehran. The two radio stations use Iranian radio's external-service transmitters and broadcast on frequencies that also carry Islamic Republic of Iran Broadcasting's Arabic programs. These stations carry pro-Intifada commentary, glorify violence against Israel, and encourage future acts of "resistance."

The Voice of Davud appears to be different from these other services in some aspects. AP writer Brian Murphy reported from Tehran on 11 June that the new Iranian broadcasts mark an effort to "bypass politics and reach out to Israelis and others," and the first Voice of Davud broadcast lacked the usual anti-Israeli diatribes. Indeed, that program contained items about Israeli Prime Minister Ariel Sharon's visit to Washington, about Palestinian attacks in Israel and the West Bank, and an interview with a Jewish Iranian. The Islamic Republic of Iran Broadcasting website's (www.irib.com) outline of the Voice of Davud, on the other hand, accused Tel Aviv of "racial discrimination and cruelty to the real owners of occupied Palestine" and appealed to "freedom loving" Israelis to open discussions about "justice, friendship, and security." "By this radio we try to show the real face of the liars -- those who play a lot of tricks on the Jews in order to bring and settle them in the bloody ruins which used to be Palestinian homes," the website message said, according to AP's Murphy. (Bill Samii)

CHANGES IN LEGISLATURE COULD AFFECT EXECUTIVE'S GOALS. The election of a new parliamentary presidium on 12 June could be an indication of the dynamics of Iran's very active and competitive factional politics. The presidential cabinet has its own legislative objectives regardless of party politics and changes in the parliament, but these political developments are likely to affect the executive branch's efforts.

Hojatoleslam Mehdi Karrubi was re-elected as speaker of parliament on 12 June, according to IRNA, with 221 votes in his favor and 28 abstentions. He ran unopposed. Tehran representative Behzad Nabavi received 152 votes to become the first deputy speaker and Tehran's Mohammad Reza Khatami was elected as the second deputy speaker. In the first election to the legislature's presidium in June 2001, Khatami was chosen as the first deputy speaker, while Mohsen Armin of the Mujahedin of the Islamic Revolution Organization (MIRO) was chosen as second deputy speaker. Behzad Nabavi is associated with the MIRO, too, while Khatami is with the Islamic Iran Participation Party (IIPP). This development could indicate the MIRO's ascendancy in the reformist 2nd of Khordad movement, or the movement's radicalization. Other 2nd of Khordad members are the Executives of Construction Party, the Islamic Iran Solidarity Party, and the Militant Clerics Society.

Before this presidium election took place, Mohammad Reza Khatami discussed the factional competition in an interview with the 29 May "Iran." Khatami said that the 2nd of Khordad (the date of Khatami's 1997 election) movement is social in nature, rather than political. There is a danger that political movements can become either extremist or slow-paced, he continued, whereas social movements always remain moderate. Khatami conceded that, from a political perspective, the 2nd of Khordad movement could be criticized for its slow pace. Khatami also conceded that the slow pace of reform frustrates young people, but there are disagreements about the methods for achieving reform.

Meanwhile, there are recent rumors that the Executives of Construction Party (ECP) will part ways with the 2nd of Khordad movement. This rumor gained currency when Mohammad Hashemi-Rafsanjani criticized a number of political parties (see also the 27 May 2002 "RFE/RL Iran Report"). According to a report in the 2 June "Aftab-i Yazd," Hashemi said that the reformists and conservatives are at a deadlock and only the ECP can "manage the present disorder and chaos." But as the daily pointed out, even within the ECP there is a variety of political viewpoints.

Apparently referring to Hashemi's comments, ECP member and former Minister of Islamic Culture and Guidance Ataollah Mohajerani said in the 9 June "Entekhab" that the 2nd of Khordad front should not succumb to the "amateurishness" of some of its members. He stressed that the 2nd of Khordad is a front, not a party, and its members must "understand that if they stick together, they will be able to organize the reform movement and contribute to its advancement." Yet a third ECP member, Golpayegan parliamentary representative Morteza Shayesteh, accused the IIPP of behaving autocratically and trying to gain more power, and he warned that the 2nd of Khordad faction will disintegrate if this continues.

Asked if comments like his will undermine 2nd of Khordad's "cohesion and uniformity," Shayesteh was dismissive. "What cohesion and uniformity?! This faction no longer has the necessary cohesion and uniformity. There are many disputes, and all of those disputes have been generated as a result of the dissatisfaction of member factions with the autocratic behavior of a certain faction [a reference to the IIPP]," he said. To restore unity, Shayesteh suggested that "those gentlemen moderate their quest for monopoly to some extent.... Otherwise, the 2nd of Khordad faction will break up."

Tehran representative Jamileh Kadivar said in the 22 May "Noruz" that the political factions are trying to attract supporters -- even members of the banned Liberation Movement of Iran (a.k.a. Freedom Movement). Indeed, LMI leader Ebrahim Yazdi on 11 June met with Speaker of Parliament Mehdi Karrubi. After their meeting, Yazdi stated that they agreed on the need for solidarity among the factions, IRNA reported, and this solidarity should be promoted through dialogue. Yazdi said that negotiation is the only way out of the current political deadlock.

Meanwhile, President Mohammad Khatami's cabinet has its own legislative plans. Some members of Khatami's cabinet said on the sidelines of a joint session with the legislature that the government is formulating some of its programs and bills, "Iran" reported on 1 June. Education and Training Minister Morteza Haji said a bill regarding the specialization of teachers is under consideration, and there is another bill regarding the provision of facilities for nonprofit schools. Industries and Mines Minister Ishaq Jahangiri described a bill on renovating industries and another that could attract investment by amending the laws on taxes. Jahangiri also described laws that would affect investment in the maritime sector, especially shipbuilding. Justice Minister Mohammad Ismail Shushtari mentioned a law that would give equal blood money (diyeh) whether or not the victim of crime is a Muslim (currently, more money must be paid for killing or injuring a Muslim than for killing or injuring a minority member). Shushtari also described steps to speed up the courts, which currently have major backlogs.

These examples of regulations affecting education, industry, and religious law demonstrate the potential for controversy. The greater the factionalism and fractiousness in the parliament, the more difficulty the president and his cabinet will have in pursuing their objectives. (Bill Samii)

PERSPECTIVES ON KERMANSHAH UNREST. Two Iranian publications have reported on a 10 June event -- the disruption of speeches at Kermanshah's Motazedi mosque by reformist activist and newspaper Editor Latif Safari and parliamentarian Hussein Loqmanian -- in very different ways. According to a report in the 12 June "Iran" newspaper, 300 chanting hard-liners stormed the building and then Law Enforcement Forces (LEF) personnel arrived on the scene. In the ensuing tumult, the LEF used tear gas; a number of people were arrested; Latif Safari was injured in the neck; and at least 17 people were injured. The 12 June "Jomhuri-yi Islami," on the other hand, reported that, "A number of knife-wielding thugs have attacked and wounded several Hizbullah individuals in Kermanshah." The attack came after the victims, who already had to tolerate "sneers and smirks from Latif Safari and his supporters," started chanting, "Hussein's martyrdom is our pride." Safari's supporters, according to "Jomhuri-yi Islami," were brought to the venue so they could attack the victims with chairs and knives.

Loqmanian warned in the 12 June "Aftab-i Yazd" that Iran's pressure groups are being reorganized. In light of this most recent incident and similar ones that preceded it, Loqmanian demanded that the Ministry of Intelligence and Security and the Interior Ministry investigate the situation. He wondered why the pressure groups can get away with violent acts, while parliamentarians can be jailed for voicing their opinions. Because similar problems have occurred in other parts of the country, Loqmanian said that the forces of law and order should expose the organizers and perpetrators. (Bill Samii)

QOM OPPOSES AMERICAN VISITORS. A petition signed by 300 students from Qom University and sent to Speaker of Parliament Mehdi Karrubi calls for the legislature to ban American nationals from visiting Iran, "Resalat" reported on 11 June. The petition said that this measure would counter U.S. Congressional approval of a proposal to ban Iranians from entering the U.S. There have been other recent expressions of hostility to the U.S. from Qom. On 27 May, lecturers and students at seminaries in Qom congregated at the Fayzieh seminary to demonstrate their support for the supreme leader's ban on any kind of contacts with the U.S., according to state radio. They called for action against those who use government platforms to obstruct the system's fundamental policies. According to an earlier report from state radio on 27 May, a statement from the Association of Qom Seminary Teachers said that it will "not allow any group to negotiate with an enemy from whose clutches the blood of the youth, great commanders, and honorable clergy is dripping, and whose dirty hand is involved in every plot." (Bill Samii)

EUROBOND ISSUE TO GO AHEAD. Iranian officials and a European credit-rating agency remain confident about Iran's proposed Eurobond issue, although an American firm no longer rates the bond and Americans are banned from purchasing the bonds. An Iranian daily, however, is not so enthusiastic.

Central Bank of Iran Governor Mohsen Nurbakhsh said that Iran intends to proceed with its first international bond issue even though Moody's Investor Service has withdrawn its credit rating, Reuters reported on 8 June. Germany's Commerzbank and France's BNP Paribas are to handle the issue jointly, and a Commerzbank spokesman said on 5 June, "We confirm that we were mandated for the bonds, and as far as we are concerned it is still the case."

Although Moody's has withdrawn its rating (see "RFE/RL Iran Report," 3 June 2002), Fitch Ratings said on 5 June that its B+ rating will remain unaffected, according to Reuters. James McCormack, a senior director at Fitch, said that even if this bond issue fails, Iran's credit quality is not in danger. In McCormack's words, "Fiscally and externally Iran is in a strong position. Iran does not need to borrow. It is an exercise in trying to integrate themselves [sic] into the international community." Reuters quoted a "market source" as saying that the withdrawal of the Moody's rating would have very little impact because U.S. investors, who are the largest source of liquidity for emerging-markets debt, are prevented by sanctions from buying Iranian bonds. The U.S. Treasury Department warned Moody's that its rating of the Iranian bond violated a 1995 ban on trade and investment in Iran, the "International Herald Tribune" reported on 11 June, and Americans who violate these sanctions can face 10 years in prison and a $250,000 fine, and American corporations can be fined up to $500,000.

The English-language "Iran News" on 10 June was less optimistic. It warned that, as a consequence of the withdrawn Moody's rating, the bonds will be sold at higher rates and this will be harmful to the country's economy. "Iran News" also questioned the whole point of issuing the bonds. The newspaper wondered how the revenues will be used, where they will be invested, and which industries will benefit. Moreover, what is the point of selling bonds when Iran has an annual oil income of over $20 billion and several billion dollars in surplus oil revenues? For that matter, "Iran News" asked, what happened to all the loans Iran has taken out in the last few years? The daily said that Iran has over $40 billion in foreign debt already. (Bill Samii)

ECONOMIC GROWTH REQUIRES FOREIGN INVESTORS. Achievement of the 6 percent growth rate forecast in the Third Five-Year Development Plan hinges on access to foreign capital, Central Bank of Iran (CBI) Deputy Head for Economic Affairs Akbar Kimijani told a 10 June panel discussion at the Iranian Foreign Ministry's Institute for Political and International Studies. Steps required to increase investor confidence and attract foreign capital include unification of exchange rates, changes in tariffs and elimination of non-tariff barriers, and flexibility in employment laws, Kimijani said according to IRNA.

Two U.S.-based Iranian economists discussed these issues with RFE/RL's Persian Service on 9 June. Northeastern University's Professor Kamran Dadkhah said that among the more positive recent economic decisions of the government are unification of the exchange rate, as well as ending the foreign-currency deposits required as a guarantee of the return of export proceeds to Iran. The exchange rate should be allowed to float freely, Dadkhah added, and the government should plan ahead for the amount of foreign currency it injects into the domestic market. American University's Professor Mehrdad Valibeigi warned that Iran's main problem is the absence of a foundation to attract foreign capital.

The early-June approval of foreign-investment legislation by the Council for the Discernment of Expediency also could attract foreign capital. The new legislation, according to the "Financial Times" on 4 and 5 June, allows foreign investment in all sectors of the economy that are open to private firms, defines Iranian expatriates as foreign investors if their capital comes from outside the country, and permits repatriation of profits in hard currency exchanged at the market rate. Moreover, profits made in the domestic economy can be repatriated, whereas previously only profits from exports could be repatriated; and there would be fair compensation in cases of nationalization.

An editorial in the 12 June issue of the English-language "Iran News" said that Iran can attract foreign capital only when the economy can "offer attractive incentives and register good industrial and manufacturing performance." The daily warned that doubt about the "economic and political teams of the administration" who disagree over the role of foreign investment is the biggest obstacle to foreign investment.

Another step to make life easier for foreign businesses and businessmen was announced on 9 June by Mahmud Musavi, the Fars Province director-general of the Bureau for Alien and Foreign Immigrant Affairs, according a an IRNA dispatch the next day. Musavi announced that foreign businessmen and investors can get 72-hour Iranian entry visas at the Shiraz airport. Musavi explained that companies in Fars Province that want to host foreigners can apply for a visa 48 hours before their arrival by submitting to the Ministry of Foreign Affairs a letter and a photocopy of the guest's passport. Extensions can be applied for as necessary. (Bill Samii)