Trade and freedom go hand in hand. In the 15th century the Muslim Middle East was not only as economically developed as Europe but was also a vigorous liberal society which allowed the Christian church and the Jewish faith to practise and whose scholars introduced Greek philosophy and Indian mathematics into Europe. However, as European merchants pulled ahead of Muslim merchants for reasons to do with differences in theological laws of inheritance, and short-circuited the Mediterranean in their trade with China and Asia, then Muslim society began its long decline into the reactionary, illiberal society that characterises so many Islamic countries today.

The cultural chasm between western society and Islamic countries seems to me to be so wide that it can never be bridged by political methods -- or at least it will take generations. It seems to me that the only possible solution will be to encourage trade by all means possible. The next round of talks of the World Trade Organisation in Cancun, Mexico, could do more for peace between the west and the Islamic countries than all the efforts of politicians -- not that they meet very often. Until then, it looks as though the Islamic countries will be locked in reactionary mode -- as Iran and Saudi Arabia are today. They both trade oil with the west but this is about the only product and involves too little interface. Many more products need to be traded so that innovations and liberal ideas can more easily diffuse across borders.

The following article describes the situation in Iran where millions of young people are without jobs and yearning for freedom. It is not as tragic a situation as in Iraq (not yet anyway) but in this case it is a home-grown tragedy -- as it is in Saudi Arabia.

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'REFORM HAS FAILED'

Faith in Khatami is waning and international pressure may toughen the resollv e of the hardliners

Roula Khalaf and Najmeh Bozorgmehr

On a recent evening at Laleh Park in Tehran, three women draped in black chadors covering every inch of their bodies are trying to sell booklets that extol the virtues of the strict Islamic garb. But there is little interest. Most young women at the park sport much less conservative dress: their headscarves slide backwards off their hair; their trousers reveal their ankles; and the jackets they wear are short and tightly wrapped round the body.

Nearby, on the edge of a fountain, a group of young men whistle and sing when young women walk by. "The youth want all kinds of freedom but the situation is not getting better. You vote and vote in Iran but it does not make any difference," says one of the young men, a policeman off duty.

Iran's youth -- more than 60 per cent of the population is under the age of 30 -- describe a growing sense of despair and a thirst for change that even the most reformist among their leaders are unable to satisfy. In a proud and nationalistic country, some admit that they now look to the outside world -- even to the vilified US -- to help them.

In Laleh Park, as in the rest of Tehran, there is no hint of the anti-Americanism prevalent in the Arab world. Iranians have so little faith in what they hear from their leaders that the radical anti-American rhetoric of the mullahs increases their fascination with the US. "No one really wants an outsider to intervene in his country but when people get desperate they emotionally start holding on to anything they can," says the policeman.

Iran's hardline clerics are not interested in the aspirations of Iran's youth, which they deem to be misguided idealism that threatens their hold on power. Nor are they responding to the massive pressure the US has exerted on Iran by hinting that they are willing to reform. Instead, over the past year, the conservatives who control powerful unelected institutions -- such as the Guardian Council, which rules on whether bills passed by the majlis, the parliament, conform to Iran's Islamic constitution -- and the unaccountable security apparatus have waged a systematic campaign to crush their reformist rivals and dim Iranians' hopes in the reformists' ability to bring change.

With fewer people than in previous years expected to turn out for February's parliamentary elections, supporters of hardline clerics say their camp has a chance to win back control over the majlis, dominated by reformists.

Laleh Park was a flashpoint in early June for student demonstrations that turned into violent clashes with vigilantes allied to hardliners. Sparked by a protest over university privatisation, the rallies erupted into a more general expression of outrage against the clerical establishment. Yet the protesters' chanted slogans attacked reformists, now seen as ineffectual, as much as the conservative clerics who have blocked reforms. Mohammad Khatami, the moderate president who has struggled to reconcile the Islamic system with concepts of freedom and democracy, was called upon to resign.

"You can rarely find any class of society happy [but] this unhappiness is unprecedented. The system has never been so emptied of public support," says a student who was involved in the protests. "In theory the reformists were in line with the people. But their performance was not different from that of the conservatives. Reforms as a state-sponsored mechanism have failed."

That the protests were not massive in scale and were quickly put down discouraged the display of popular anger that was expected in July on the anniversary of the 1999 Dorm riots in Tehran. Political analysts there say the containment was considered a political victory by the conservatives. Nevertheless the protests strengthened the conservatives' suspicion that reformists were willing to ally themselves with the US to fight the domestic political battle.

The sweeping victories of reformists in two presidential and one parliamentary election since 1997 raised expectations beyond what the reformists could deliver. It is true Mr Khatami's emphasis on respecting human rights has constrained his rivals, while his attachment to individual freedom has encouraged Iranians to fight for their beliefs. Reformist newspapers have sprung back to life after repeatedly being shut down. "If I look outside I see that the population does what it wants culturally, even in the way they dress," says Mohammad All Abtahi, the vice-president and a close aide to Mr Khatami. "There are so many newsletters now on the internet -- as many as 120,000 young Iranians write in them every day. To have done this much is enough for us."

But in a country where every elected institution has a parallel and more powerful unelected body in the hands of hardliners, the conservatives' have easily been able to obstruct reforms.

Ayatollah Ali Khamenei, Iran's supreme leader, has sometimes intervened in Mr Khatami's favour. But analysts say he has recently been forced to bow to the immense pressure of the radical clerics to whom he owes his position.

Although the conservative camp includes "realists" who have wanted to maintain support for Mr Khatami and for gradual reforms, more radical conservatives have recently stepped up the confrontation with reformists. "We try to make people hopeful but the strategy of the conservatives is and has been to disappoint people and keep them at home [at election time]," says Elaheh Koolaee, a reformist member of parliament.

Since June's unrest, the Guardian Council has thrown out a series of parliamentary decisions. Most important for the internal political struggle was the rejection of a bill that would have restrained the council's ability to vet candidates taking part in elections. Instead the council has opened offices across the country to keep watch on candidates preparing to run in February's election.

On the international front, too, Mr Khatami's achievements in rehabilitating Iran have been severely threatened. As the US has stepped up the pressure on Iran, the European Union has joined Washington in demanding that Tehran allay the growing suspicions over its nuclear programme. On Tuesday, the board of governors of the International Atomic Energy Agency, the United Nations' nuclear watchdog, will consider a report by inspectors who have found weapons-grade material in some nuclear sites that Iran insists are strictly for energy production.

The US wants the board to declare Iran in non-compliance with the so-called safeguards agreement to the nuclear non-proliferation treaty. If the US has its way -- and it is far from clear that it will -- the controversy will be referred to the UN Security Council.

In the hope of easing international pressure, Iran last week said it was ready to negotiate an agreement with the IAEA that would permit intrusive inspections of nuclear sites. It insists the highly enriched uranium found by inspectors comes from contaminated equipment that has been imported.

At least so far, however, the international demands on Iran appear to have toughened the hardliners' resolve to weaken the reformists and consolidate their power at home. "When the US applies pressure, it gives further excuses to hardliners to intensify their pressures rather than loosening up the atmosphere," says the student activist, who asks to remain anonymous. International tensions have also been increased by a dispute with Britain over the arrest in the UK of a former Iranian diplomat, wanted in Argentina in connection with the 1994 bombing of a Jewish community centre.

Reformists advocating a more flexible attitude in dealing with US requirements for transparency on the nuclear programme and for the handover of senior members of al-Qaeda detained in Iran -- another source of tension with Washington -- are accused by hard-liners of being pawns of the US. Officials in Tehran believe hardliners will delay signing the so-called additional protocol to the non-proliferation treaty, in part because they want to deny the reformists political victories that could revive voters' hope in them. "If Iran gives in on the NPT and on al-Qaeda now, the reformists will reap the fruits," one reformist official recognises.

Despite the repeated setbacks, Mr Khatami has not yet followed through with his threat to resign. His recent statements, however, have sounded increasingly desperate, repeatedly apologising for his failure to keep his promises of freedom and respect for the rule of law.

"Stepping down would shake society. Knowing him I think he would never do anything that would disturb stability. Any beginnings of unrest would not be finished quickly and would push the country towards war," says Taha Hashemi, editor of Entekhab, a newspaper that represents the moderate side of the conservative camp. "But I'm worried about his health because of all the pressures. He is under a lot of psychological and physical stress."

Having weathered the storm of the June unrest, the conservative camp is now preparing to deal a heavier blow to the reformists by weakening their hold on parliament. Although most political analysts believe an outright conservative victory in next year's parliamentary elections is unlikely, many fear the popular disillusionment could produce such a low turnout that the conservatives -- with a small but dedicated following -- could severely weaken the reformists.

Analysts point to the results of last February's local elections, which saw a return of conservatives to power in cities such as Tehran, where just over 11 per cent of people voted. The conservatives' strategy is to project a centrist agenda, more concerned with economic issues that they claim have been ignored by the reformists. Amir Mohebian, a columnist for Resalat, a conservative publication, insists that Iranian voters, disenchanted by unfulfilled promises, have become more mature. Their priority today, he says, is economic well-being rather than political freedom.

"Our population has become pessimistic so it would not trust anyone easily any more. This was needed for our people to get away from idealism and become more pragmatic," he says.

Reformists admit that Mr Khatami's project for change has appeared to give less priority to the restructuring of Iran's dysfunctional economy. They also acknowledge that divisions within the reformist camp -- whether on the pace of political reforms or the virtues of a market economy -- have undermined its cause. "In the last years, in all society, politics were at the top of the agenda, the weight of politics was too heavy and it cast a shadow on everything," says Mrs Koolaee. "We must focus on the problems of everyday life of people, not only on the political field."

Yet Mr Khatami's central argument has been that respect for human rights and for the rule of law are the essential ingredients to all reforms, including on the economic front. The hold on the economy of the bonyad -- the charitable foundations run by powerful clerics and answering to no government institution -- can be broken only when the system of government becomes more transparent. The lack of accountability has also frustrated Iran's efforts to attract the foreign direct investment that could help ease unemployment.

"We've tried the conservatives once before and we know the results. They don't have a chance to run the economic side," says a leading businessman. "The situation we're in now is the result of what they did 10 years ago."

Despite growing tensions with the US, Iran's hardliners apparently believe that they can still initiate a dialogue with Washington. While accusing reformists of secretly seeking to restore relations with the US, officials with ties to Akbar Hashemi Rafsanjani, the former president, who continues to wield vast power within the conservative camp, are said to have had contacts with US officials.

Analysts close to the Rafsanjani camp argue that the US is bound to realise that it needs Iran on three important fronts. They believe al-Qaeda operatives in detention in Iran will become valuable bargaining chips, particularly during a US presidential election campaign in which President George W. Bush will want to show clear victories in the war on terror. Western diplomats in Tehran, however, warn that the longer Tehran resists handing over the suspects to other countries, the less valuable any intelligence information they could provide will be.

The "moderate" conservatives also argue that the chaos in Iraq could worsen without Iranian help. So far Iran has largely kept its hands off post-Saddam Hussein Iraq. It has been more welcoming than Iraq's Arab neighbours of the new governing council, the interim body appointed by the US. And it has not sought to stir wp anti-US sentiment among the Iraqi Shia majority. But Iran has also hinted that it could provoke mischief.

"Iran has a 900km border with Iraq and security in Iraq depends on security on the border. Whenever we decided to make Iraq insecure in Saddam Hussein's times, we could do that," says a political analyst close to the conservative establishment.

Iran, he adds, is also the key to preventing the emergence of a Shia version of the Sunni al-Qaeda network. "When al-Qaeda decided to shift the fight to the US, fundamentalist Sunnis were carried away by this. In the Shia world, the key figure is Iran. Radicals would be directed from Iran, not Iraq."

Western diplomats say Iran's conservatives are overestimating their ability to affect US policy. When the Bush administration has yet to formulate a coherent strategy for dealing with Iran, threats to undermine US interests in the Middle East will play into the hands of officials in Washington advocating more hardline policies, they say. "There's this strange idea in Iran about which faction will open up first to the US, without an appreciation that there is no interest in the US in doing business with them," says a western diplomat.

Reformists meanwhile warn that conservatives are also misguided in thinking they could regain domestic legitimacy. "They [the conservatives] don't mind winning an election with a low turnout and they think the US problem will be resolved. They are optimistic that the US will co-operate with them," says a government official. "But Iran's future is either lack of legitimacy at home and abroad, or the success of reformists. Many people are disappointed with Khatami; but it does not mean they are now supporting the conservatives."

The greatest risk facing the conservatives is that the disillusionment of Iraq's youth could turn into more chaotic and violent unrest. In the short term students may be afraid to initiate new protests; many young Iranians admit that the cost of demonstrations is too high. But diplomats say that Mr Khatami's reform movement has dramatically changed the conscience of Iranians and the awareness of their rights to .ask for democracy -- a trend that will be only temporarily subdued.

"Violent and non-peaceful protests are not expedient now when the other side doesn't hesitate to brutally suppress," says a student activist. "But the weakening of the political parties that were created by the reform movement has led to the formation of social groups that don't have any clear identities. In the short term this might benefit the system, but not in the long run."

Political analysts in Tehran point to a worrying trend: protests are erupting spontaneously in different parts of the country over sometimes minor issues, unrelated to the political power struggle. Last month, for example, a dispute over redrawing district boundaries in the province of Isfahan provoked riots that left several people dead.

Even Mr Mohebian, the conservative columnist, says the economic frustrations of the poor could become a greater concern than student unrest. "We are seeing those dangers now. If there is no management of the problems faced by the lower classes, very quickly the problems will change into anarchist unrest," he says.
>>>>


Financial Times 5 September 2003


Keith Hudson, 6 Upper Camden Place, Bath, England, <www.evolutionary-economics.org>


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