MIDDLE EAST PROGRAM OCCASIONAL PAPER SERIES WINTER 2011 MIDDLE EAST PROGRAM WINTER OCCASIONAL PAPER SERIES 2011 Introduction 1 The Security State and its Fractured Elites 4 The Impacts of Internal and External Tensions on the Iranian Economy 7 Education in Iran: National Pride, Regime Prejudice 19 Iran and the Persian Gulf Iran: Turmoil at Home, States: From Conflict to Détente to Assertiveness Abroad? Conflict Again? 22 Introduction ruling elite has narrowed. The Revolutionary Perspective from the Guards and the security agencies have Haleh Esfandiari, Director, Middle East Arab World 28 emerged as major players in the economic Program, Woodrow Wilson International and political decision-making process. At the Center for Scholars That Other Track, same time, he noted, serious divisions have That Other Partner: The EU In September 2011, the Middle East emerged within this ruling elite: between the and Iran 30 Program of the Woodrow Wilson Center supporters of President Ahmadinejad and the brought together six leading Iran experts to conservative establishment, between the pres- Stubborn Nuclear Program, consider the current state of Iran’s domestic ident and parliament, between Ahmadinejad Stubborn Foreign Policy: politics and the major foreign policy issues and the Supreme Leader, and between com- Iran’s Face-Off with the it is facing. This was the first in a series of peting camps among the conservatives. United States 33 meetings the Middle East Program will host Bijan Khajehpour provided an overview as Iran heads for parliamentary elections in of the economy. He analyzed the impact of March 2012 and presidential elections the international sanctions on the economy, the following year. costs and fallout of the removal of subsidies Shaul Bakhash opened the meeting with on fuel, electricity and other utilities, the an overview of the domestic situation. He significance of the recently uncovered $2.6 argued that since the contested 2009 presi- billion banking scandal, oil revenues, and dential elections and the suppression of the general economic prospects. He predicted Green Movement the regime has grown that inflation will reach 25 percent by the 1 more repressive and the composition of the end of March 2012, lower purchasing power MIDDLE EAST PROGRAM OCCASIONAL PAPER SERIES WINTER 2011 Director The Middle East Program was launched in February 1998 in light of Dr. Haleh Esfandiari increased U.S. engagement in the region and the profound changes sweeping across many Middle Eastern states. In addition to spotlighting Assistants day-to-day issues, the Program concentrates on long-term economic, social, Kendra Heideman and political developments, as well as relations with the United States. Mona Youssef The Middle East Program draws on domestic and foreign regional experts for its meetings, conferences, and occasional papers. Conferences and Special thanks meetings assess the policy implications of all aspects of developments Special thanks to within the region and individual states; the Middle East’s role in the interna- Kendra Heideman and tional arena; American interests in the region; the threat of terrorism; arms Mona Youssef for proliferation; and strategic threats to and from the regional states. coordinating and editing this The Program pays special attention to the role of women, youth, civil publication; Mona Moussavi society institutions, Islam, and democratic and autocratic tendencies. In for her transcription assistance; addition, the Middle East Program hosts meetings on cultural issues, includ- Tara Dewan-Czarnecki for ing contemporary art and literature in the region. her editing assistance; the Design staff for designing the • Current Affairs: The Middle East Program emphasizes analysis of cur- Occasional Paper Series; and rent issues and their implications for long-term developments in the region, David Hawxhurst for including: the events surrounding the uprisings of 2011 in the Middle taking the photographs. East and its effect on economic, political and social life in countries in the region, the increased use of social media, the role of youth, Palestinian- Israeli diplomacy, Iran’s political and nuclear ambitions, the drawdown of American troops in Afghanistan and Iraq and their effect on the region, human rights violations, globalization, economic and political partnerships, and U.S. foreign policy in the region. • Gender Issues: The Middle East Program devotes considerable atten- tion to the role of women in advancing civil society and to the attitudes of governments and the clerical community toward women’s rights in the family and society at large. The Program examines employment patterns, education, legal rights, and political participation of women in the region. The Program also has a keen interest in exploring women’s increasing roles in conflict prevention and post-conflict reconstruction activities. • Islam, Democracy and Civil Society: The Middle East Program moni- tors the growing demand of people in the region for the transition to democ- ratization, political participation, accountable government, the rule of law, and adherence by their governments to international conventions, human rights, and women’s rights. It continues to examine the role of Islamic movements and the role of Islamic parties in shaping political and social developments and the variety of factors that favor or obstruct the expansion of civil society. The following papers are based on the authors’ presentations at the Woodrow Wilson International Center for Scholars on September 30, 2011. The opinions expressed 2 herein are those of the authors and do not reflect those of the Woodrow Wilson Center. for the people, a slow-down in the housing market, Parsi noted that the EU’s relationship with Iran and continued budget deficits. has always depended on the Iran-U.S. relationship. Iran is currently undergoing a second cultural At the same time, reaching a consensus on foreign revolution, according to Roberto Toscano. He noted that four ideological pillars of the Islamic Republic have greatly shaped education: the insepa- rability of religion and politics, Islamic revival, cul- tural revolution, and the creation of the new Islamic person. The regime never resolved the contradiction between the desire of high-quality technological and scientific education and the individual as pas- sive consumer of official (authoritarian or totali- tarian) culture. The reformists under President Khatami attempted to close the gap between these two approaches to education but had only limited success. Under President Ahmadinejad, education policy is attempting a return to the original project of “advanced science and medieval religion,” but this is an educational counter-reformation destined to fail, according to Toscano. policy between 27 members of the union, whether Afshin Molavi discussed Iran’s relations with the on Iran or other issues, is not an easy task. While countries of the Gulf Cooperation Council and par- there is a history of engagement by the EU countries ticularly with Saudi Arabia. Reviewing the ebb and with Iran, according to Parsi, in the current politi- flow of Iran-Saudi relations since the establishment cal and financial crisis faced by a number of EU of the Islamic Republic, Molavi recalled the tense countries, there is not much interest in mending relationship between the two countries in the early relations with Iran. The EU has, in general, joined years of the revolution, the improvement witnessed the U.S. in pursuing a policy of increasing sanctions under presidents Rafsanjani and Khatami, and on Iran due to its nuclear program, but relations can the deterioration of relations under Ahmadinejad. improve only through diplomatic means. Molavi examined the rivalry between the two coun- Michael Adler discussed the role of the tries for regional influence and the impact of the International Atomic Energy Agency (IAEA) in Arab Spring on this rivalry. Iran, he said, has lost its inspections of and reports on Iran’s nuclear pro- standing with Arabs since the upheavals that have gram. (He was speaking before the November swept the Arab world in the past year—a point on release of the IAEA’s most recent report on Iran’s which the Lebanese analyst and journalist, Rami nuclear activities). He noted that Iran’s claim it Khouri, who was in the audience, also commented. is cooperating with the IAEA notwithstanding— Khouri emphasized the significance of the Arab and despite the two rounds of talks between Iran Spring. For the first time, Arabs see themselves as and the P5+1 in Vienna in 2009 and in Geneva players and shapers of their own affairs. They are in 2010—the level of Iran’s cooperation with taking matters into their own hands. He, too, noted the IAEA has shrunk, and it is limiting access to that, in contrast to the last few years, when Iran was its nuclear facilities to IAEA inspectors. At their riding high in the Arab world, Iran’s pull today is November meeting, the IAEA Board of Governors dwindling, and the Iranians don’t have a role to play may take a hard line and say Iran is seeking nuclear in the future of the Arab world. weapons; it may absolve the Islamic Republic from Rouzbeh Parsi dealt with another important play- such an intention; or it may continue to cultivate an er in Iran’s foreign policy—the European Union. ambiguous position. 3 MIDDLE EAST PROGRAM OCCASIONAL PAPER SERIES WINTER 2011 The Security State and its Fractured Elites Shaul Bakhash, Clarence J. Robinson Professor of History, George Mason University; and former Fellow and Scholar, Woodrow Wilson International Center for Scholars Iran has moved in a decidedly more authoritarian and godly values. This theme of right and wrong direction since the contested presidential elec- thinking was picked up by the leader, Ayatollah tions of 2009. Indeed, with its insistence on ideo- Ali Khamenei, in a series of speeches follow- logical conformity, adherence to the official line, ing the election. He made clear that members and the use of show trials and public confessions, of the ruling group could remain as part of the the regime has assumed many of the traits of the system only if they adhered to regime ideology.