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Iran Report: March 20, 2000

20 March 2000, Volume 3, Number 12

SOME STICK AND SOME CARROT. U.S. President Bill Clinton signed the Iran Non-Proliferation Act into law on 14 March. "I fully share the Congress' objective of promoting nonproliferation and combating Iran's efforts to acquire weapons of mass destruction and missile delivery systems," Clinton stated, according to Reuters. One day earlier, Clinton extended the national emergency declared with respect to Iran on 15 March 1995 to continue beyond 15 March 2000, per the International Emergency Economic Powers Act (50 U.S.C. 1701-1706).

In a 13 March letter to Speaker of the House of Representatives J. Dennis Hastert and President of the Senate (President pro tempore) Senator Strom Thurmond, Clinton wrote that "The factors that led me to declare a national emergency with respect to Iran on March 15, 1995, have not been resolved. The actions and policies of the Government of Iran, including support for international terrorism, its efforts to undermine the Middle East peace process, and its acquisition of weapons of mass destruction and the means to deliver them, continue to threaten the national security, foreign policy, and economy of the United States."

Iranian Foreign Ministry spokesman Hamid Reza Assefi said "the decision was in contradiction to recent remarks of those officials and proved a lack of sincerity on the part of the U.S. government towards Iran," IRNA reported on 14 March.

Iranian state radio reacted to the President's renewal of sanctions on 14 March. It accused the administration and Congress of supporting the Iraq-based Mujahedin Khalq Organization, which had just launched a terrorist attack in Tehran. State radio said that "Iran's moral support for Lebanese and Palestinian Muslim combatants" is legitimate support for organizations fighting occupation. Regarding Weapons of Mass Destruction, Tehran claimed that "its defensive activities are merely aimed at deterring [its enemies] and maintaining and strengthening its peaceful relations" If the U.S. is concerned about WMD, state radio asked, why was it silent about Israel's possession of WMD? This is because, according to the broadcast, "as President Khatami has stressed: America's real capital is Tel Aviv, not Washington."

Secretary of State Madeline Albright said that despite the renewal of sanctions, the U.S. still wants to pursue a dialogue with Iran. "We are interested in having a government-to-government dialogue on issues of concern to us -- the acquisition of weapons of mass destruction, support for terrorism and lack of support for the Middle East peace process."

To this end, Albright announced on 17 March that the U.S. will permit the import of Iranian carpets, caviar, nuts, and dried fruits. More significantly, she announced that the U.S. is "prepared to increase efforts" to settle "outstanding legal claims between out two countries." This refers to claims before the U.S.-Iran Claims Tribunal in the Hague that are estimated to be worth several billion dollars.

Albright added that "we have no illusions that the United States and Iran will be able to overcome decades of estrangement overnight. We can't build a mature relationship on carpets and grain alone. But the direction of our relations is more important than the pace. The United States is willing either to proceed patiently, on a step-by-step basis, or to move very rapidly if Iran indicates a desire and commitment to do so." (Bill Samii)

DESPITE PROBLEMS, ANKARA BAKU KEEP TIES WITH IRAN. The coincidence of claims by Ankara and Baku about Iranian espionage, subversion, and repression of ethnic minorities, coming almost at the same that these countries exchange high-level official visits, demonstrates the complexities of relations between neighboring states. But what they also indicate is that both Turkey and Azerbaijan are willing to overlook some of the more unpleasant aspects of Iranian behavior to promote their longer-term economic and security interests.

Turkish State Minister Tunca Toskay was in Tehran to address the first Economic Cooperation Organization (ECO) Trade Ministers meeting on 6 March. ECO, the successor to the Regional Cooperation for Development (RCD), was founded by Iran, Pakistan and Turkey. In 1992, the organization was expanded to include Afghanistan, Azerbaijan, Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan. In his speech, Toskay urged all ECO members to have common customs and foreign trade laws in order to facilitate the free flow of goods and services between members, Anatolia news agency reported.

But only a few days earlier, an Istanbul daily cited documents seized from Turkish Hizballah that connected the organization with Iran. On 3 March, "Hurriyet" published photographs of Hizballah leader Hussein Velioglu in Tehran during a parade and meeting government officials, as well as a copy of an Iranian identification card describing him as a "foreign staff officer." The 160,000 pages of documents called for Hizballah to start a holy war in October 2001. The next day, "Hurriyet" cited documents from 1992-1998, which described the organizational and military training Hizballah would receive in Iran. Liaison officers were to be based in Tehran and Ankara. Also, Hizballah was to provide Iran with maps and intelligence on military deployments in eastern Turkey. Finally, Hizballah was instructed to threaten journalists who criticized Iran.

Azerbaijan's Foreign Minister Vilayat Guliev arrived in Tehran on 13 March. He met with President Mohammad Khatami, Foreign Minister Kamal Kharrazi, and a number of other officials. President Heidar Aliyev and National Security Minister Namig Abbasov of the Republic of Azerbaijan are scheduled to visit Tehran in the near future, and the two countries are working on improving their relationship (see "RFE/RL Iran Report," 24 January 2000).

Baku and Tehran have continuing trade relations, and they are trying to reach an agreement on division of the Caspian Sea's resources, although Tehran is opposed to the Trans-Caspian Pipeline. Furthermore, they started the exchange of prisoners, per a December 1998 extradition agreement, when 59 Iranians and 18 Azerbaijanis were transferred at Astara on 6 March. Iranian consul Mojtaba Vali said 61 more Iranians are in Azerbaijani prisons, Xinhua reported. (A Foreign Ministry source said that four Iranian prisoners had died "due tot he improper conditions of Azerbaijan's jails," Tehran Times" reported on 8 March.)

But Iran is accused of anti-Azerbaijani subversion, too. Four channels of Iranian state television can be seen in the southern part of the Republic of Azerbaijan, and some of the programs are in the Azeri language. Azerbaijani broadcasts are interfered with when Iran's Sahar-TV has its half-hour Azeri news broadcast, according to Baku's "Zerkalo" on 29 February. Sahar-TV's news tells Azerbaijanis to worry about their own country, rather than the fate of Azeris living in Iran. And when Azerbaijani parliamentarian Reza Ibadov toured the Middle East, Sahar TV described it as "Ibadov's protection of Zionist interests," according to "Zerkalo."

Azerbaijan's former ambassador in Tehran, Aliyar Safarli, who is linked with the United Azerbaijan Movement, also complained about Iranian subversion. He said that Persian-language schools in Azerbaijan are increasing, with the aim of "southerniz[ing] northern Azerbaijan," "Yeni Musavat" reported on 14 February. A member of the 21 Azar separatist organization told the 11 January Baku "Ekspress" that Ministry of Intelligence and Security officers in Astara, Julfa, Rasht, Tabriz, Maragheh, Urumiyeh, and Anzali are recruiting Azerbaijani citizens to go home and act as spies. The unnamed source added that Iranians in Baku were being recruited for the same purpose.

Meanwhile, there is still concern in Azerbaijan about the status of Tabriz nationalist figure Mahmudali Chehragani. His attempt to register for the 18 February parliamentary election allegedly was prevented by the authorities (see "RFE/RL Iran Report," 10 January 2000 and 17 January 2000). He then was imprisoned on smuggling charges, "Azadlyg" reported on 8 February. According to the National Liberation Movement of Southern Azerbaijan, Chehragani was fined 220 million rials (about $125,000 at the official rate) and is in solitary confinement, "Yeni Musavat" reported on 14 February. Chehragani is now on a hunger strike, ANS television reported on 7 March.

Also, 300 activists of the National Liberation Movement of Southern Azerbaijan were tried by the Revolutionary Court in Tabriz in the second week of March, Azernews-Azerkhabar reported. Three of them received three-year sentences, two received 3 1/2 year sentences, and one got a four-year sentence. (Bill Samii)

TEHRAN'S OFFERS OF CHECHEN MEDIATION UNSATISFACTORY. The conflict in Chechnya, while overshadowed by other aspects of Iran's domestic and foreign affairs, continues to attract attention in Tehran. And Tehran's relatively muted stance on the conflict continues to receive some criticism at home and abroad (see "RFE/RL Iran Report," 7 February 2000).

Foreign Minister Kamal Kharrazi told Qatar's Al-Jazeera television on 10 March that Tehran expected that guerrilla warfare would continue even after Grozny was recaptured by Russian armed forces. If Russia permits it, Iran, through the Organization of the Islamic Conference, is ready to broker a peace agreement. Kharrazi said that "The OIC is ready to continue its efforts and believes it is its duty to find a political solution to this crisis. If the Russians accept, we are ready to make moves toward that end."

Deputy Foreign Minister Sadeq Kharrazi told Russian Federation Council vice-speaker Vladimir Platonov that Iran is concerned about the fate of Chechen civilians, Interfax reported on 17 February. He urged Moscow to take note of international opinion and not to overlook Iran's potential as a mediator.

Moscow recognizes Iran's importance in Islamic public opinion, but it is not interested in its offers to mediate. Russian Minister for the Federation and Nationality Affairs Alexander Blokhin went to Tehran in the third week of March to meet with Foreign Minister Kharrazi, Deputy Foreign Minister Morteza Sarmadi and Interior Minister Abdolvahed Musavi-Lari. In a 14 March interview with RIA state news agency, Blokhin said Iran's understanding of the Caucasus situation is "essential." Iran's offer to mediate the conflict, however, never came up. Blokhin said "Iran's mediation was not under review since it is Tehran's firm position that the events in Chechnya is Russia's internal affair."

Yet Tehran's approach is not satisfactory for other foreign observers. Usamah al-Baz, Egyptian President Hosni Mubarak's political adviser, "emphasized that the method of deploring and condemning aggression was not the ideal treatment of the tragedy of the Chechen people," Cairo's "al-Ahram" reported on 7 March. "Therefore," al-Baz said, "Egypt is conducting a serious dialogue with Russia."

The Lahore High Court Bar Association urged Pakistan's government to recognize Chechnya as an independent state, Islamabad's "Pakistan" daily reported on 18 February. The daily added that "It is not justifiable for the Islamic countries to turn their back on the Chechen nation in the name of their international expediencies. � Pakistan, Afghanistan, Iran, Saudi Arabia, and the United Arab Emirates should launch a combined campaign to convince other Muslim countries to recognize Chechnya's independence."

Representatives of seven Muslim organizations in Azerbaijan issued a statement on 13 March calling on progressive forces in Russia and the international community to protest the genocide of the Chechen people, Turan news agency reported. And Allahshukur Pashazade, head of the Spiritual Board of Muslims of the Caucasus, complained to "Bakinskiy Rabochiy" that the Russian government and media are equating Islam and the Chechen nation to terrorism.

Some observers in Iran are also voicing dissatisfaction. "Kayhan International" � an English-language daily connected with Supreme Leader Ayatollah Ali Khamenei's office � rejected Moscow's pretext for the conflict � the bombings of several Moscow apartment blocks last summer. The daily said on 20 February that "the United Nations and other world bodies, including the Organization of the Islamic Conference, are being questioned over their seemingly [sic] indifference on the human catastrophe in Chechnya." "Moscow has to end the war. It should realize the truth that the world, particularly the Muslim world, cannot afford to remain indifferent to the atrocities of Russian troops against the defenseless and innocent civilians in Chechnya."

Meanwhile, suspicions that some Iranians are trying to join the Chechen combatants persist. An Iranian national (whose name does not sound very Iranian), Badr Nejad Mahmud Safar-ogli, was detained at the Yarag-Kazmalyar checkpoint for trying to leave Russia with false documents, and "his possible affiliation to Chechen rebels is now being checked up," ITAR-TASS reported on 12 March. And Tehran continues to provide humanitarian assistance for Chechens displaced by the conflict. Trucks carrying Iranian aid arrived in Tbilisi on 8 March, ITAR-TASS reported. (Bill Samii)

WIDE NET CAST FOR HAJJARIAN SHOOTERS. The 12 March shooting of Tehran City Council member Said Hajjarian continues to reverberate in Iran. Hajjarian was shot at close range in the face and shoulders. He was taken to the hospital and placed on a respirator, with a bullet lodged near his spinal cord. Dr. Zafarqandi, a member of the team treating Hajjarian, said on 16 March that the patient's status was stable but showed signs of improvement. Hajjarian's son, Mohsen, said that his father opened his eyes briefly on 17 March and responded to his relatives.

One of the "students" who occupied the U.S. Embassy and held U.S. officials hostage, Hajjarian went on to serve in the Ministry of Intelligence and Security. Now, he is considered a leading reformist and is the editor of "Sobh-i Imruz" daily and a leader in the pro-Khatami Islamic Iran Participation Party. The list of possible assassins, therefore, is not a short one. Almost nobody has avoided suspicion in this incident, as the authorities search for the culprits.

Colonel Hussein Mostofi, the lead investigator, said on 13 March that a profile of the assailant had been compiled, and later, there were reports that a bystander had photographed the incident. But because the assailant was riding a 1000-1300 cc motorcycle -- a type only the police and security forces are allowed to have -- the investigation focused on finding the vehicle. Mostofi asked the public to call the police on a special number if they had any information about the case. On 15 March the motorcycle was found, "Sobh-i Imruz" reported, and the next day, Ahmadi, a man who had phoned a death threat to Hajjarian, was arrested, according to "Kar va Kargar."

The hardline daily "Kayhan" blamed the U.S. for the incident. Deputy Islamic Revolution Guard Corps commander Brigadier General Mohammad Baqer Zolqadr said the incident was part of "Washington's scheme" to make Iran look "crisis-ridden," according to IRNA. Ayatollah Mohammad Emami-Kashani said that the incident was part of the "psychological war" against Iran that is "orchestrated by the arrogant power and global Zionism," IRNA reported on 17 March.

But because access to such high-power motorcycles is fairly limited, most assumed that hardliners with links to the security forces were behind the assassination attempt. An editorial in the 13 March "Iran Vij" argued that such an event demonstrates why the security forces must be under the president's control. An editorial in the 13 March "Bayan" argued that because Hajjarian is so well-known, it was symbolically an attack on all Iranian reformists, and another editorial in the same daily wondered if the hardliners think there is only one Hajjarian.

The results of the 18 February parliamentary election made it quite clear that the Iranian public's effort to reassert control over its future will be reversed only with great difficulty. But statements by senior figures like Ayatollah Mohammad Taqi Mesbah-Yazdi, who last year advocated violence against "outsiders," have helped create an atmosphere in which some people see murder of their political opponents as acceptable. The fact that Mesbah-Yazdi is a leading religious official and can make such statements in official fora like the Friday Prayers makes such violence seem even more tolerable.

President Mohammad Khatami's failure to vigorously protect his allies in the past also may have emboldened the proponents of violence. This may be the proverbial "crows coming home to roost," since the president did not condemn the violent suppression of student unrest last July, nor did he act on behalf of individuals who ran into trouble with the courts, such as Gholamhussein Karbaschi, Mohsen Kadivar, or Abdullah Nuri. An editorial in "Asr-i Azadegan" asked, "When the government cannot protect top figures of the reform movement, how could the administration undertake reforms and make promises as far as their implementation are concerned?"

Figures throughout the Iranian political establishment, whether seen as reformists or hardliners, were very critical of the assassination attempt. Khatami said on 12 March that "terrorists resort to such acts because they have no place among the people and because the people hate them," IRNA reported. Supreme Leader Ayatollah Ali Khamenei condemned the "dastardly assassination attempt" on 15 March. He added that "I express my deepest regret over the assassination attempt against Mr. Hajjarian; I pray for him and extend my sympathies to his faithful and honorable family."

State radio called for unity to thwart the terrorists' efforts. This is exactly what happened. The Interior Ministry, the Tehran City Council, the Islamic Iran Solidarity Party, the Executives of Construction Party, the Society of the Self-Sacrificers of the Islamic Revolution, the Militant Clerics Association, the Islamic Coalition Society, the Hizbullah Council of the Islamic Republic, the Islamic Iran Partnership Party, the University Basij, and the Ministry of Islamic Culture and Guidance issued condemnatory statements, too. According to state television, their statements said: "The enemies who are against the resistance and glory of Islamic Iran have become despondent because of the enthusiastic and massive participation of the people in the various arenas of the Islamic revolution. Once again, they resorted to terrorist acts in order to make this country insecure."

This unity in the face of adversity is a common Iranian feature, and one of Iran's strengths. But murders may lead to the radicalization of reformists who, until now, have been trying to operate within a legal framework and by adhering to the rule of law. If that happens, there may be more violence. (Bill Samii)

FLIPPER WON'T KILL. Iran has purchased the contents of the Sevastopol aquarium, including a whale, dolphins, seals, walruses, and sea-lions, raising concerns that they will be put to military use. Statements by the Ukrainian navy and marine biologists, however, make such concerns seem exaggerated.

Aquarium director Boris Zhuryd said the animals had to be sold because he no longer had money to feed them. But these are not average dolphins, Moscow's "Komsomolskaya Pravda" warned on 3 March, because they formerly served in the Soviet military. And Zhuryd and his wife established the Soviet Ministry of Defense's military dolphinarium, where the pinnepeds were trained to guard military facilities and attach mines to ships or submarines. Zhuryd said that Iran has constructed a "special supermodern oceanarium" which is superior to the facilities he has seen before.

But Captain Mykola Savchenko, Ukrainian naval spokesman in Crimea, dismissed concerns that the dolphins are aquatic warriors. He told RFE/RL that "These are dolphins that put on a show, an attraction. There are no more naval dolphins and these were not trained in military tasks. They were for a circus. It's a circus on water." He added that the dolphins are retirees: "They are not carrying out military tasks and have been transferred to civilian duties."

The combative utility of dolphins is questionable, too. Marine biologist Anatoly Bezushko, who works at the military oceanarium in Crimea, told RFE/RL that the military researchers did not have great success with dolphins. In his words, "Kamikaze dolphins work in movies, but not in real life." This is because dolphins do not like the shallow, murky water where ships moor. On the other hand, dolphins have had some success locating sunken ships or broken oil pipelines and have even saved downed aviators. (Bill Samii)

RISKY BUSINESS, I. Shakespeare warned in "Hamlet" that one should "Neither a borrower nor a lender be," because it could discourage industriousness and result in lost friends. The Bard of Avon obviously did not have Iran in mind. Iran's borrowing practices enabled its reconstruction after the Iran-Iraq War, and its substantial debts have given it leverage over its creditors, effectively forcing them into "friendship" and renegotiation of repayment schedules. Iran's international borrowing will be discussed in this week's "RFE/RL Iran Report," and credit risk and foreign investment in Iran will be discussed in the 20 March "RFE/RL Iran Report."

The Islamic Republic started to accumulate short-term loans as it tried to rebuild after the eight year war with Iraq. As oil prices dropped in the early-1990s, Iran found that it was having trouble meeting its payment obligations, and some analysts believe that by 1996 Iranian debt amounted to about $23 billion. Iran reached bilateral agreements with creditors, outside the Paris Club framework, to restructure arrears on short-term debt and maturing letters of credit in 1995-1996. (The Paris Club is an ad hoc meeting of Western creditor governments that renegotiates debt owed to official creditors or guaranteed by them.) When oil prices dropped in 1998, Iran was forced to renegotiate its debts again.

By February 1999, 40 German banks had renegotiated $1 billion in financing, and Japanese businesses and the Japan Export Import Bank rescheduled all of Iran's debt of almost $500 million. Repayment on these debts must start in Spring 2000. In March 1999, the Italian export credit agency (SACE) agreed to reschedule $370 million in Iranian debt, and Japan agreed to provide approximately $820 million in low-interest loans to finance the construction of a hydro-electric power station. The Islamic Development Bank lent Iran $105 million to finance several industrial projects in September 1999. And the EU reported that Iran rescheduled a further $2-3 billion in loans and secured an equivalent amount in refinancing.

Determining precise figures on Iranian debt is problematic. Both Iran and its creditors have been close-mouthed on this issue. The Central Bank (Bank Markazi), furthermore, regularly publishes figures that represent its intentions, rather than the minimum expectations of creditors, according to the Economist Intelligence Unit. One should bear this caveat in mind when hearing the Central Bank's December 1999 announcement that total foreign debts and commitments, excluding conditional debts like Letters of Credit and future interest payments, amounted to $22 billion.

Iranian officials also play down Iran's foreign debt situation. President Mohammad Khatami said in an 11 February speech that "Despite the alarming fall in the oil prices, we have paid our scheduled foreign debts in time, � our foreign debt has reached its lowest level in the last 10 years." Former president Ali-Akbar Hashemi-Rafsanjani said in a January speech that during the period following the Iran-Iraq War ("the reconstruction era") Iran's foreign debt was only $12 billion. Allegations that foreign debt amounts to $30 billion are, he said, "a big lie."

Be that as it may, the recent increase in oil prices has strengthened Iran's position. Barring fluctuations in oil prices, Iran is expected to make principal repayments of "some $4 billion over the current fiscal year, $3.5 billion in 2000/01 and $2 billion in the following year," the Economist Intelligence Unit reported in February 2000.

Iran's reliance on such a volatile commodity, however, makes lenders hesitant. Raquel Ajona, the Deutsche Bank Research Unit's expert on Iran and the Mideast, told RFE/RL that "If we were to see more stability in oil prices then [Iran] could have access to medium to long-term loans but not right now [when oil prices are considered to be volatile]."

Still, these factors, combined with positive expectations about Iran's Third Five Year Development Plan, which calls for greater privatization and reduced state involvement in the economy, have led international lenders to take a more positive view towards Iran. In January 2000 it was reported that the World Bank was reconsidering loans to Iran of $86 million for primary health care and $145 for a sewage treatment project. World Bank President James Wolfensohn said on 14 March that such loans are under discussion, but "There is a split of opinion on the board... That split of opinion is that the new regime in Iran is one to whom we should reach out and there are others who have the view that the new regime is one to whom we should not reach out. I am getting pressure from both sides"

The U.S. has opposed such World Bank loans. Therefore, Simon Williams, the Middle East expert at the Economist Intelligence Unit, told RFE/RL, "I tend to think [the World Bank] won't do it this year. The [Iranians] seem to have a couple of bids in but really the World Bank is always quite keen to avoid political controversy where it can and I can't imagine them pushing the US on it at the moment."

In theory, Iran can get loans from the International Monetary Fund, where its Special Drawing Rights quota is 1.5 billion (about $1.95 billion), but this amount has remained untouched. There is speculation that Iran is unwilling to accept the IMF's structural-adjustment requirements, but it is also possible that Washington, which holds about an 18 percent stake in the IMF, would not permit loans to Iran. (Bill Samii)