Iran's Foreign Policy and Internal Crises

By Lamote, Laurent | McNair Papers, April 1994 | Go to article overview

Iran's Foreign Policy and Internal Crises

Lamote, Laurent, McNair Papers

For a long time, exporting the Islamic revolution was the Iranian government's ideological priority and, also, a political means of countering Iraq's allies. Nowadays, Iran lacks the political, economic and military means of achieving this ambition. The only fight the 15 year-old Islamic Republic of Iran can undertake is for its own survival.

Iran is isolated on the international scene. It has been defeated, or is facing new problems, in the international conflicts which it has faced on almost all its borders, as an actor, victim or witness. It can no longer cope with a staggering debt at the very time when, belatedly, proposals for cultural, social and economic reforms are being carded out. In addition to the internal socio-economical crises, Iran faces the failure of its politico-religious legitimacy. For the first time since 1979, the political elite and the Iranian clergy is openly split between the supporters of the national religious Guide (now Ali Khamene'i) and the traditionnal religious leaders.

The Islamic Republic is now concerned about the survival of the national government. With the regime's survival at stake, Iran's foreign policy is now dependant on these internal crises. Nationalism seems today the last way to keep Iran united and traditional Islam safe. Nationalism, as well as the current Islamic ideology, explains the Iranian military build up and Iran's reassertion of its position as a major regional power.


Although the public administration, services and institutions work relatively well, the Islamic Republic is facing a domestic crisis so widespread and serious that it risks bringing down the regime. Popular discontent became evident for the first time in 1992, when spontaneous riots broke out in Meshed, Arak and Shiraz. During the June 1993 presidential elections, discontent led to a high rate of abstention and a strong vote for the opposition in big cities and non-Persian provinces, later in the begining of 1994 terrorist actions were conducted in Tehran and popular riots broke out in Zahedan (Baluchistan).

Since the summer of 1993, Iran can no longer keep up on payments for its short-term debt of $30 billion, despite renegotiations on a bilateral basis with Japanese, German and French banks. Following several years when its doors were relatively wide open and programs were launched for economic recovery, the country must now drastically curb imports. Per capita income was cut in half from 1979 to 1989; and President Rafsanjani's policies have not improved things. Basic commodities and spare parts are scarce once again, after five years of artificial abundance. Inflation is rising under the impact of the rial's enormous devaluation. Inadequacies in public housing, health and education are no longer bearable, given the high rate of population growth (1.7 million more people every year): half of Iranians have had no direct experience of Iran under the Shah.

Paralyzed by ideological principles, which keep it from taking out medium- or long-term loans, Rafsanjani did little more in his first term as President (1989-1993) than to lift restrictions on imports and begin construction on investment the projects that had been adopted but not yet financed. Just as settlements had been reached with Western firms and nations regarding the economic disputes that had arisen out of the 1979 Islamic Revolution, Iran plunged into economic crisis. The Iranian government knows that there is no economic future if it does not accept becoming part of the international financial system via an agreement with the IMF which is a prerequisite for a comprehensive rescheduling of its loans, going beyond the partial reschedulings with banks. Such a change implies normalizing relations with the United States, but tampering with this founding dogma of the Islamic Republic spurs the opposition of both the Khomeinist clergy and Ali Khamene'i, the Guide of the Revolution. …

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