Despite Khatami landslide, conservatives still resisting change

Published June 19th, 2001 - 02:00 GMT

Some things in Iran might never change. Less than a week after the reformist president, Mohammad Khatami, was swept back into power with 77 percent of the votes cast, the Guardians Council, the conservative and clerical committee which oversees laws passed by the parliament, rejected a bill that had been approved by the reformist-dominated parliament, whose stated goal was to encourage and protect foreign investment.  

 

According to the Guardian Council, the bill in its current form provides an advantage to foreign investors over their Iranian counterparts, and would provide a means for foreign governments to encroach upon Iran’s economic independence.  

 

The law passed by the parliament would have prevented the seizure or nationalization of assets held by foreign concerns, except when the “national interest” was being served and due process of law had taken place. The law also provided foreign investors with all the rights and assistance given to Iranians, although they would be barred from creating monopolies.  

 

As is often the case, the investment law may eventually be ratified, after it has been amended to the liking of the Guardian Council. But if it is not, or if the amendments are such that fail to provide the bait that will attract the foreign investment community, the action taken by the conservative forces could cost what the economy minister, Hossein Nomazi, has estimated at $1.7 billion in foreign investment. 

 

Khatami’s landslide election victory certainly demonstrated Iran’s thirst for change. Social frustration is exploding, with unemployment approaching 25 percent, although officially it is said to be 16 percent. About half the country’s population lives below the poverty line.  

 

As it so happens, when Khatami selects his new cabinet for his second term, Nomazi is expected to be off the list. Analysts say that he will likely be the fall guy for the first Khatami administration’s weak economic record, which was characterized by its support for a strong, state-run economy. The incoming ministers are projected to oversee a shift towards free-market, liberal policies. 

 

A real fear of the government is a tendency of some of its best and brightest young citizens to flee the country in pursuit of a brighter future. To combat the problem, this year’s budget allotted an additional 36.7 percent in funding for job creation over the previous year’s budget. Moreover, the 2001 Budget Act prevents unlicensed aliens from working, allows various exemptions for investment in developed regions, and allocates appropriate credit for employment-creating small-scale industries. 

 

Khatami’s overwhelming victory at the polls indicates that the country is still prepared to give him the benefit of the doubt, despite his inability thus far to substantially improve ordinary Iranians’ economic lot in life. But if ― as was demonstrated by the collapse of the investment law six days after the election ― the conservatives continue to stymie any serious attempt at reform, economic or otherwise, the popular leader could discover himself considered impotent and ineffectual. – (MENA Report)

© 2001 Mena Report (www.menareport.com)


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