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A Return to Iran

Published by The Earth Times on 1998-10-01

During the last two decades, Iran has loomed large in my life. My only son was born in 1979, the year of the revolution that toppled the Iranian monarchy and ushered in an Islamic theocracy. Iran was my first assignment as a foreign correspondent that same year. I used to work for The New York Times in those days, and I was thoroughly enchanted by Persia's people and culture. I was hooked by its history. Persepolis, Mashad, Hamadan, Shiraz, Tabriz--I visited them all, these magical places. I was enthralled by the idea of reporting on international affairs--I still am--and Iran provided a glorious, if exhausting, introduction.

When I first went to Iran, in those early months of the Islamic revolution, I sought out ordinary people all over the country, listening to diverse voices in a textured, multi-layered land, visiting with them in hovel and hacienda alike, partaking of their hospitality--eating chello kabab made out of succulent lamb, enjoying taftoon, the clay-baked bread that melts in one's mouth, and drinking endless cups of chai, the strong tea that Iranians consume with sugar cubes held between their tongue and teeth. The soundtrack of those conversations and the aromas of those meals still linger in my mind, and I have often replayed in my private moments the warm generosity of Iranians as I explored Persia from Azerbaijan to Zahedan, stopping in obscure villages and towns, roaming through teeming cities at will, reporting on a nation in tumult and transition. Over the years I stayed in touch with many of the Iranians I met in those early months; some left their country in despair, some became casualties of a revolution that began to devour its own.

That early period in Iran was a wondrous time for me, filled with discovery of a new land and a new culture. I was, after all, a freshly minted foreign correspondent for one of the world's most prestigious newspapers, and here I was covering the biggest story around. It wasn't an auspicious time for Iran, however. There was economic chaos and political terror as the Islamic militants who seized control of this oil-rich nation dismantled the ambitious Western-style development projects of Shah Mohammed Reza Pahlavi. It was also a time of deep antagonism between Iran and the United States because of the hostage crisis: Islamic radicals had overrun the US Embassy in Teheran and taken 52 American diplomats as hostages (they were freed only after 444 days, during which the presidency of Jimmy Carter was doomed and Ronald Reagan came to occupy center stage).

It was a time when Washington was frequently and publicly denounced as the "Great Satan" by Ayatollah Ruhollah Khomeini, the spiritual "father" of the Iranian revolution. Soon there would be a eight-year war which neighboring Iraq initiated over a dispute concerning the Shatt al-Arab waterway, and I would return to Iran to cover that senseless conflict in which more than a million people perished on both sides. For ordinary Iranians, swept up first by the tide of revolution and then pushed into a wrenching war that affected every sector of society, it was a time of profound uncertainty.

It was by talking with those everyday people that I got to understand better the confusing dynamics of the Islamic revolution of 1979, which ended the monarchy and ushered in the theocracy that has controlled Iran ever since. It's doubtful, of course, that any outsider can fully grasp the complexities of Persian culture--especially not in the relatively short bursts of time that journalists are permitted in government controlled systems such as Iran; the eddies and cross currents of contemporary Iranian society have their source in antiquity, and journalistic newcomers run the risk of not only being hopeless neophytes but also naive. But on the assumption that the best interpreters of Iranian society would be Iranians themselves--as opposed to, say, foreign diplomats, the favorite sources of visiting correspondents--I turned to common people. By welcoming me into their homes and opening up on a variety of issues, ordinary Iranians provided me special insights into their extraordinary society even as it was being battered by turbulent forces both within and outside their country. Talking is the national pastime here, as in many developing countries. A young reporter could scarcely ask for more.

My fascination with Persia and its people continued after my last visit in 1980. I was frustrated at being unable to continue covering Iran's tumultous political, economic and social story. The country became a pariah in the West, especially after a fatwa--a religious death sentence- was pronounced on Salman Rushdie, the Indo-British novelist who'd allegedly blasphemed the Prophet Mohammed in "The Satanic Verses." For many outsiders, Iran conjured up visions of weapons of mass destruction, which the US said the Islamic regime was developing. What also came to mind was Iran's undercutting of the Arab-Israeli peace process, and its support for extremist Islamic movements in the Middle East and elsewhere. The mullahs were suspected of being behind terrorist attacks in Lebanon and in several European cities. There were reports of kangaroo courts and mass executions of the Islamic regime's perceived opponents in Teheran's notorious Evin Prison. Western organizations such as Amnesty International and Human Rights Watch frequently issued reports citing gross violations of human rights and persecution of religious minorities in Iran.

Not surprisingly, Teheran's theocrats felt that the world's media were biased against them. And so Iran became inaccessible to most journalists as its Islamic revolution unfolded. Even a journalist of Indian origin was presumably suspect, notwithstanding the traditional friendship between Iran and India, and I found that a visa was impossible to obtain.

From the outside, I often wondered: Had the Iranian revolution become as malevolent as portrayed in the West? What had happened to the social justice that the Islamic militants had promised to their brethren who had lived under the tyranny of the Shah? Now that the Shah's big-ticket development projects had been mothballed, what were the mullahs doing with Iran's annual oil revenues of $15 billion? I wanted to see for myself the changes in the country. With 70 million people, Iran was too big to ignore; with the world's second largest natural-gas and fourth largest crude oil reserves, it was too important not to cover from inside. But how?

I had heard that there was "another" revolution going on in Iran, one that promoted family planning, literacy and health-care. According to United Nations statistics, there was now 100 percent enrollment of primary school-age students in the country's 25 provinces. Shortly before his death on June 4, 1989, Ayatollah Khomeini had authorized a national "dialogue" on population after he was persuaded that the country's population growth rate was galloping out of control and straining the economic and social fabric. "Dialogue" was code for authorizing a renewed family planning movement; the ayatollah may have been an autocrat but he understood the politics of demography: no country, however wealthy, could accommodate a rapidly growing cohort of young, restless and unemployed people without endangering longterm domestic stability.

In the years since Khomeini's death, Iran's theocracy pushed family planning so extensively that the country's population-growth rate had been almost halved to under 2 percent annually. Condoms, birth-control pills and intra-uterine devices are freely available. With the blessings of the clergy, there were now pre-marriage counselling classes for both men and women--these, in fact, were compulsory before couples could be legally married. In Teheran and elsewhere, physicians like Dr. Fereidoon Forouhary offered vasectomy services; clients included even the most observant of Muslim men. Infant-mortality rates--usually a telling sign of the state of sustainable development--had also fallen dramatically, as had maternal-mortality rates. Basic health care was widely available because the number of physicians graduating from medical schools each year had increased from 667 in 1979--the year of the Revolution--to 4,500 now; in 1979, there were just 9 medical schools in Iran, and now there were 39. A vast network of community health workers, known as behvarz, had also been mobilized around the country.

I had heard about the Literacy Movement Organization, aimed at adults and run largely by volunteers. Its campaign had been astonishingly successful, raising Iran's literacy rate to nearly 90 percent--certainly among the highest in the developing world. In Isfahan province, for instance, more than 70,000 adults--mostly women--were enrolled in free literacy classes in which they received up to 500 hours of instruction from community volunteers. More than two million Iranians were signed up in such classes nationally. Barely 20 years ago, the literacy rate was under 40 percent.

So when an opportunity presented itself to cover an international conference in Teheran, I rushed to apply for a visa. I was no longer with The New York Times; I was editor and publisher of The Earth Times, whose journalistic universe encompassed environment, development and current affairs. Iran's "social revolution" would be right up the newspaper's alley. Much to my surprise, the Iranian Foreign Ministry granted my visa within 24 hours. I was off to Persia. So what if my visa was valid for only a week? After 17 years of doing time elsewhere, eight days in Iran seemed time enough. It would be a different Iran that I would be visiting, of course, and quite possibly a different society. But I would be in Persia again.

It is impossible for any visiting reporter to adequately comprehend rapid changes in a society as complex as Iran, with its 17 different nationalities and ethnic groups, its 66,000 villages, its mix of social gentility and political volatility, its traditions of hospitality and deep-rooted tribal feuds. But for the reporter who is willing to invest time and effort in traveling and meeting everyday people, Iran can offer intriguing insights into how an ancient nation is struggling with the demands of modernization. It was a different Iran I encountered, but it was the same Persia.

* * *

Ziba Abbasi remembers the last time she saw her husband. She had a terrifying feeling that she would not see him alive again. It was a sunny September day in Isfahan, and her husband Mehdi Sharifian, a 34-year old Iranian army colonel, was leaving home for Khoramshahr, the region where his country and Iraq had fought an eight-year war. "I told him not to go," Ziba said, "I told him that he had already been in battle eight years. Why now? Why go back again?" But Colonel Sharifian said, "I must go because it is my duty."

By most conventional standards, the colonel would already have been deemed to have discharged his duty well. He had served on the front for the entire duration of the Iran-Iraq war, which ended inconclusively in 1988 after more than a million casualties on both sides. He had been decorated many times for bravery. He had risen in the ranks. He was considered a model officer by his superiors not only on account of his military record but also because of the long hours he put in as a community-service volunteer. But Colonel Sharifian had a personal obsession: he would frequently return to the battle zone to search for the missing remains of Iranian soldiers. The latest trip, this past September 19, was undertaken because of appeals by mothers of Isfahan-area soldiers he had known. The women had beseeched him to look for their sons. "He told me that he had no choice but to oblige," his wife said.

Two days after Colonel Sharifian left home, Ziba Abbasi was informed by the Iranian military that her husband was killed by a land mine.

I met Ziba at the martyrs' cemetery in Isfahan a few weeks after her husband's death. It was a Friday afternoon, and thousands of people had come to pay their respects to their departed ones. There were women in black chadors, the tent-like outer robes that Iranian women wear in public; children scurried about; old men wandered through gravestones that were neatly arranged on a succession of slopes of a craggy hill known as Seyed Mohammad. The shouts of children at play, the wailing of bereaved women and the passage of a mild breeze through the tree-dotted cemetery--the mix of all these seemed strange and disorienting.

Beyond the cemetery was the sprawling campus of Isfahan Technology University, and in the distance I could see a huge hoarding with a painting of the late Ayatollah Khomeini, the cleric who masterminded Iran's Islamic revolution in 1979 and who vowed to fight Iraq to the finish after Saddam Hussein, the Iraqi strongman, invaded Iran in 1980. At the base of Seyed Mohammad Hill was a mosque, its blue-and-gold exterior glistening in the sunlight. Photographs of dead soldiers--called shahids, or martyrs--were placed before many graves. Red flags were strung on kadj, stubby pine trees. Families sat on intricately woven carpets; on the carpets were bowls containing apples, dates and bananas, which passersby were invited to partake in the Iranian custom of hospitality.

I felt like an intruder bursting into the private grief of people I hadn't known. But as I spoke with Ziba Abbasi and her family, it became clear that I wasn't being treated as a stranger. She sat on a brown carpet next to her husband's grave, surrounded by her three children, Zahera, a 6-year old daughter; Ahmad Sharifi, a 3-year-old son; and a 13-month-old girl, Marzieh. "I remember my husband as a kind and gentle man," Ziba said, in translated Farsi. "I have nothing to complain about. Life was good with him. But I always warned him about going to the battlefield. He never listened. And now he is gone forever."

What now? "I cannot do anything except be patient," Ziba said. "I have his children. I must raise them with what he has left behind." As she spoke, little Ahmad Sharifi raised a water bottle to his father's photograph, placing its mouth on the colonel's lips. Did the boy know that his father was dead? "He only knows that his father has gone away," Ziba said. The picture of the colonel was in black-and-white, and it showed a strong face with deep-set eyes and curly black hair. And a neatly trimmed beard, and a uniform, and just a hint of a smile on those lips that Ahmad Sharifi had tried to touch with his water bottle.

Ziba's father-in-law, Ali Sharifian, was present at the cemetery, as was his wife, Ezad Mirdamadi. "He was a man of strong character," the dead colonel's father said of his son. "He was always kind. I have three other sons, and they all looked to their brother for strength. He was always to the one to solve problems in the family. All families have problems, you understand." His wife was sobbing loudly. Ziba's brother, a tall young man named Rasool Abbasi, took me aside. "She is only 27 years old," he said of his sister. "What kind of a life is she now going to have, with three small children and a husband who is dead?"

As I left the cemetery, I thought about the time I had last visited Iran. I was taken to Behesht Zahara, a cemetery outside Teheran, the capital city, by an elderly couple I'd met. They had lost their two sons in the initial stages of the Iraq-Iran war. All around me were gravestones of young men who had died in the war, and of many other Iranians who had died in earlier years at the hands of the Shah's dreaded secret police, the Savak. That was 17 years ago. I had then come to this Middle East country as a correspondent to cover the very war in which Colonel Sharifian had fought. Ziba Abbasi told me that her husband had spent most of his tours of duty in the southwest part of the country--a region that I knew well. Had I ever met the colonel? It seemed unlikely--he must have been just 17 then, and probably a foot soldier--it was so long ago and I wouldn't have remembered even if I had run into him in the battle zone. Now I was in Iran as a peacetime visitor, but the war still touched lives of everyday people nearly a decade after it had formally ended. The guns had ceased blazing, but men like Colonel Mehdi Sharifian were still dying. Iran would honor them as shahids, of course, but what consolation was that for a 27 year-old woman who was left with three small children to raise on her own?

* * *

The turbaned man in a flowing brown cloak went up to shoppers in a food store in Teheran. "How do you find prices these days?" he asked. The shoppers vied with one another to respond, but they all had one clear message for the questioner: Inflation was hurting urban Iranians. Why, said one woman, a small chicken--barely enough for her husband and two children--cost almost 12,000 rials, the equivalent of $4. The bespectacled turbaned man took notes, and moved on to another shopper much in the manner of an American retail politician working a crowd. "When are things going to improve?" a woman asked him, echoing the sentiment of her fellow shoppers.

"Soon, I promise," the turbaned man said, with a soft smile. The man happened to be the new president of the Islamic Republic of Iran, Syed Mohammed Khatami, a moderate 54-year-old cleric. He was elected in May 1997 in a stunning landslide over Parliament Speaker Ali Akbar Nateq-Nouri, who had been favored by the hardline theocracy controlling most public institutions in this country; to everyone's surprise, including his own, Khatami received 20 million of the 29 million votes cast.

Hojjatoleslam Khatami took office in August and at once signalled his willingness to soften the harsh public face of Iran's government--making such dramatic moves as appointing a US-educated immunologist, Dr. Masoumeh Ebtekar, as Iran's first-ever woman vice president. Among the Western-oriented intelligentsia here, there was hope that the new president would be able to end the two-decade-long hostility against the US and, if not restore diplomatic ties, at least soften the poisonous rhetoric aimed at Washington, which many clerics here still ridicule as the "Great Satan." There was even hope that Iran would be able to renew trade ties with America in order to purchase computers, Boeing aircraft, and much needed oil technology.

It is obviously too early to say whether these hopes are misplaced. Politics may make strange bedfellows, but politics doesn't change overnight--not in a place like Iran where no political parties are formally permitted to exist. There is, after all, a two-decade-long history of poor relations between Iran and the US, dating back to the 1979 storming by Iranian militants of the US Embassy in Teheran and the incarceration of the hostages. There is the contention of the Clinton Administration that Iran finances international terrorism, particularly aimed against Israel--an accusation that Iranian officials predictably deny. Human rights groups in West charge that Iran continues to persecute its religious minorities and also perceived opponents of the Teheran regime.

And now there is the rift between Washington and the European Union over the new $2 billion deal under which Total, the French energy company, will develop the South Pars natural gas field in Iran, which- with 21 trillion cubic meters--has the world's second biggest gas reserves after Russia. Total's partners in the venture are Gazprom, Russia's gas conglomerate, and Petronas, Malaysia's state oil company. The consortium is taking advantage of a 1994 US ban that prohibits American firms from doing business with Iran, the biggest buyer of foreign goods and technology in the Middle East. Too bad for the Americans, because the Iranians are actively scouting for builders of oil and gas pipelines, contracts that could exceed $25 billion over the next few years.

It is also premature to speculate whether Khatami will be able to deliver on his election promises to improve the domestic economy, permit freedom of expression, allow greater economic opportunities for women, legalize political parties and introduce elections for local governments and municipalities. Although Khatami is opposed to the hardline policies of the ayatollahs, his main challenge will be goverance--whether, even as a popularly elected president, the theocratic establishment will allow him to chart more liberal policies in foreign-affairs, economics and trade.

Khatami may represent the human face of Iran's government, but not for a moment does anyone here believe that the real authority doesn't rest with shadowy Shiite ayatollahs who see themselves as the heirs of the late Ayatollah Ruhollah Khomeini, the spiritual founder of revolutionary Iran. One sign of the continuing preeminence of the theocracy: buildings all over Iran are festooned with huge paintings of Khomeini and his successor, Ayatollah Ali Khamenei. Khatami's face is visible only on campaign posters that are still plastered on walls.

Still, to a foreign correspondent returning to Iran 17 years after having covered the hostage crisis and the Iran-Iraq war, it is clear that in Teheran, in small towns and in villages across this land the size of Alaska, people are increasingly hopeful about the prospects for change. Gone from the streets are the scowling pasdaran, the Kalashnikov-toting "revolutionary guards" who often arrested women simply because hair showed on their forehead under the traditional head-to-toe chadors and hijabs that all women are required to wear. Gone, too, are the gaudy slogans on streets condemning the US. Here and there one spots satellite dishes, which are officially banned. And even though no public dancing is permitted, Iranian homes often resonate with private gaiety.

Teheran, and other places such as Isfahan, are, to be sure, crowded and often chaotic. But they can no longer be called drab, a word that came to mind most frequently during my previous visits to Iran in 1979 and 1980. Boutiques are stocked with the latest fashion from Paris and Milan; electronic stores carry Sony television sets, even IBM and Apple computers (smuggled from Dubai); confectionaries feature Swiss chocolates and some bakeries pride themselves on offering bread as savory as what could be found in France (although the overwhelming favorite remains the taftoon); Swatch and Rolex watches are available in large stores; and the tree-lined streets of Teheran are clogged with cars and vans made by Peugeot and Mitsubishi. Businessmen and top clergymen ride in Mercedes sedans. Gas costs barely 25 cents a gallon. Evin Prison on the slopes of Alborz Mountain in North Teheran--where so many executions took place during the Shah's time and certainly after the revolution--is being torn down; a park is being planned on the site. (An Iranian companion told me: "I'll never go into that park--just think of how many ghosts will be floating there.")

The 42-year-old mayor of Teheran, Gholamhussein Karbaschi, is wryly referred to some Teheran residents as the "Giuliani of Teheran"--after New York's mayor Rudolph Giuliani. Why? Because, like his American counterpart, the mayor is an activist, emphasizing the lowering of crime and the greening of urban areas. New parks are being created, and there are signs everywhere urging residents to mind their civic manners; in fact, Teheran has become one of the cleanest cities you might see anywhere. There is a construction boom in Teheran and other cities, especially in pricey high-rise apartment blocks. And even if rents are high in cities such as Teheran, housing is affordable in small towns where municipally subsidized residential developments seem to be sprouting every day.

Hotels in Teheran no longer carry a foreign imprint--which is to say that the old Grand Hyatt is now the Grand Azadi, the Intercontinental (which was a favorite of journalists during the 1979 revolution) is now the Laleh, and so on. Foreigners continue to be welcomed at these establishments, but the management often calibrates prices. For example, single rooms at the Grand Azadi ordinarily go for $70; when I came to Teheran in October, the rates had been jacked up to $140. Why? Because the Grand Azadi was where the World Health Organization was hosting an international conference and visiting participants found it convenient to stay at the hotel. The liveliest place was the lobby, of course, where you could buy a slice of delicious chocolate cake and rich coffee for under $2 (but still twice the price charged at cafes elsewhere in Teheran).

President Khatami turned up to inaugurate the WHO meeting and urged the international community to freshly study Iran's domestic efforts in promoting health, education and literacy. Some in the audience read into his speech a subtext: that Iran was inviting greater foreign participation in its efforts to push sustainable human development. I was struck by how much at ease Khatami seemed and how accessible he was to delegates.

Khatami's presence at events such as UN meetings, trade conventions and on television, partly explains the relaxed mood in Iran these days. After long years of economic hardship spawned by the early throes of the Islamic revolution that deposed Shah Mohammed Reza Pahlavi in 1979 and by the Iran-Iraq war that lasted from 1980 to 1988, there is even good economic news: Iran has registered a $7.5 billion trade surplus for 1996. That, of course, is mainly due to the fact that Iran is the largest exporter of crude oil in the Middle East after Saudi Arabia, with an average sale of 2.5 million barrels a day. Iran exported $22 million in oil last year to Japan and Europe for the most part, and imported about $15 billion worth of goods. Moreover, according to the Iranian Central Bank, the country's foreign debt has fallen from $22 billion in 1996 to $16 billion now.

Not far from my hotel was the site of the 23rd Teheran International Trade Fair. It attracted 1,100 companies from 78 countries, and nearly 3,000 Iranian ones. The trade fair was held on a sprawling site on the slopes of the Alborz hills of northern Teheran. There was a bewildering assortment of displays for electrical household appliances, furniture, computers, automobiles, video equipment, movie cameras, textile machines, teas, coffees, printing presses, paints, refrigerators, edible oils. Nothing from America, everything from Europe and various third world nations such as India and Pakistan.

"Iran is a growing market for us," Erik Hojbjerg, deputy director of Hempel Marine Paints of Denmark, told me. "Politics aside, this is too important a market to ignore. Seventy million people is a big market by any standards." His company, one of the world's biggest manufacturers of paints for ships and tankers, has a virtual lock on the Iranian market. Too bad for the Americans, he seemed to suggest, with a smile, of course.

President Khatami showed up for the opening ceremonies at the trade fair. Speaking in Farsi, the national language, he called for fresh foreign investment in Iran and for technology transfers. "If we are able to develop our scientific, economic and technical ties with other countries and bond the interests of nations, then politicians will also be forced to adapt their own demands to the people's interests," he said. Again, words that suggested an interest in opening up Iran's market to more countries.

I got the impression that Iranians would like the United States to be among those countries. The US remains, as one Iranian told me, "the invisible guest" here. The Europeans are way ahead in the selling game here, even though they cluck their tongues sympathetically whenever Washington raises the question of Iran's alleged financing of international terrorism. As it was during the Shah's time, Germany is the chief supplier of industrial and communications products to Iran, with Siemens AG, Daimler-Benz and Alcatel all doing robust business. Italy has a steel mill in Isfahan; France sells food and the French automobile maker, PSA Peugeot Citroen last year resumed sales of Peugeot 405 kits to its Iranian partner Iran Khodro for local assembly after a one-year break over debt disputes.

The Asians are also flourishing in Iran. Japan helps build power stations and dams. Top Japanese companies such as Nissan, Mitsubishi and Ishikawajima are here in full force, and Japanese cars compete with French and German ones for supremacy in the streets. South Korea's Daewoo Corporations assembles cars in Iran.

Europe's growing trade with Iran is especially intriguing in view of the fact that none of the European Union countries currently has an ambassador in Teheran. The EU asked its envoys home after a dispute last year that was sparked with Bonn accused Iran of being behind a bombing in Germany. The EU says it is willing to dispatch ambassadors again but that the German envoy must be the first to be re-enter Iran; the Iranians say he must be the last in line.

Despite the US trade embargo, Iran is doing just fine with the help of the Europeans who don't mind a bit tweaking Washington's nose. Iran, however, continues to be watched warily by much of the international community. A recent report to the United Nations General Assembly by Maurice Danby Copithorne, a special investigator, said that the number of people executed in Iran doubled between 1995 and 1996 and may double again in 1997. But he provided no figures other than quoting reports in the Iranian media that 137 people had been executed between January and September this year. In Iran, crimes such as adultery, murder and robbery are punishable by death; Iran has consistently denied that its Islamic judicial system is capricious, and Iranian officials have often blamed human-rights allegations on the cultural biases of Western observers.

* * *

My visit to Iran coincided with that of Nafis Sadik, then Executive Director of the United Nations Population Fund. The Iranians were obviously pleased that she had come: the UNFPA is about the only multilateral organization offering any sort of meaningful assistance to the Iranians for population and development work. It's not much money--barely $5 million each year for about 15 projects--and it certainly comes nowhere near the $500 million of its own funds that Iran spends annually on health, education and social development. But at least the UNFPA money is a sign that the outside world hasn't entirely shut out Iran when it comes to development aid. (More than half of the $45 million or so that Iran receives annually from UN and its international agencies goes toward the 2 million refugees from neighboring Afghanistan and Iraq who have camped in Iran.)

Dr. Sadik, a Pakistani physician who was now running for the top job at the World Health Organization, had come to Teheran to attend the same health conference which I'd planned to cover. But clearly, the highlight of her trip was her meeting with newly elected President Mohammed Khatami.

When she met with the president in Teheran, the soft-spoken Iranian said to her: "I am hoping that Iran will be able to channel 10 percent of our arms expenditure into family planning and population projects." Ten percent? That could easily translate into $400 million annually. Dr. Sadik told me that she was startled because this wasn't just a newly elected political figure speaking; Khatami was, after all, a cleric, a representative of fundamentalist Shiite Islam, a religion widely perceived to have other priorities than birth control.

"I mean, he said that a few times," Dr. Sadik told me. "He talked about the importance of population programs, of reproductive health. He also said he hoped more and more women would occupy public positions in Iran--and positions of importance at that."

One woman whom Khatami elevated to the position of vice president- making her the highest ranking woman in Iran--Dr. Masoumeh Ebtekar. She is a US-educated immunologist and one of 14 women elected to the 270-member majlis, the national parliament. As one of six vice presidents in Khatami's cabinet, Dr. Ebtekar is also in charge of environmental protection. I met the vice president in her modest office in the environmental ministry.

There was a computer at her desk, a healthy ficus on one side, and a well polished conference table made out of oak. An aide offered tea and delicious grapes and apples. When I pointed to the fruit, the chador-clad vice president said: "Do you know that more than 40 percent of our agricultural products are directly produced by women?" In rural areas, she said, growing literacy had contributed to increased employment opportunities for women.

I asked Dr. Ebtekar if she saw herself as a role model for contemporary Iranian women. After all, she was the first woman to rise so high in government. Even during the Shah's time--supposedly a more liberal era- there was no woman in a comparable position.

"This has come as a natural event," the vice president said, speaking so softly that I had to strain to hear her well. "There is a basic development in our society where women are coming up in terms of education, in terms of political and social participation in general. So my becoming vice president is a result of both a natural consequence of developments and of a request on behalf of women that they want to have a more determining role in decision-making in our society. And in that sense, I feel that, well, there's a lot of responsibility on my shoulders right now in terms of being the first woman appointed to a major decision-making position in the country.

"Also, my portfolio is environment, a very serious issue in Iran right now," Dr. Ebtekar continued. "Environmental issues are considered as basic infrastructural issues. They involve many complexities. So I feel that's a heavy responsibility." Among the things she is emphasizing is a campaign to ban smoking in public buildings, and another campaign to persuade women--especially young women--to quit smoking.

Was she receiving adequate political support from her colleagues in government? The vice president said: "Sometimes we see in different countries where women are coming into decision-making positions that there's no backing, no genuine development in that line. But in Iran, thank God, we can say that a genuine commitment exists to support women. That in turn makes things much better in decision-making circles. I feel that there is a great deal of support among both the political elite and my colleagues in the ministry and outside. There is genuine support for women's participation and presence in decision-making."

As Iranian politics go, Dr. Ebtekar and President Khatami are considered moderates. Both are undoubtedly sincere in their desire to improve the lot of everyday Iranians whose percapita income--notwithstanding Iran's oil wealth--remains below $2,000. Cities such as Teheran may be bustling with commerce, but they also contain slums. And rural poverty has by no means been fully eradicated. In view of Iran's emphasis on social development, what did the vice president feel the outside world should be paying more attention to?

"You must judge Iran by what we are accomplishing in social development--in education, in family planning, in dealing with the environment," Dr. Ebtekar told me. "What we're searching for is not ideology but sustainable solutions to social and economic problems. It's not enough to have laws--we've got to implement them better."

Then she became critical of the foreign media. "The media never came to terms with the realities in Iran," the vice president said. "They always took a very biased stance in the face of the developments that occurred here. They could have made efforts to better understand the position of Ayatollah Khomeini as a religious and political leader--that he had made it clear that religion and Islam were no obstacle to women's advancement. The only difference between Islam and maybe other ways of thought and lifestyles is that Islam provides a framework where the woman's dignity is not compromised by her social activity. She is not abused, she is not exploited, but she is considered as a human being with human dignity. Also, her role in the family is not degraded. In Islam, the family itself is not undermined as a cornerstone of human development and education for the future generations. In the model we've tried to follow in Iran, the family is considered a very basic issue, it's the sacred center for human growth and development. And these are maybe the basic aspects of our social development in terms women's issues."

"What happens in East is not well understood in the West," Vice President Ebtekar continued. "Maybe the foreign media should take a more careful look at what we're trying to do in Iran in human development. Maybe the outside world is fixated on political developments, and doesn't care much about our efforts to promote human development. And we feel that it's time to change that. I think that after people get an opportunity to see what we've accomplished here, they can decide for themselves what really has happened--what the values and developments have really been in Iran."

* * *

Implicit in what Vice President Ebtekar said to me was the fact much of Iran's contemporary ethos has been shaped by Shia theology. The opposition to Shah Mohammed Reza Pahlavi was spearheaded by Ayatollah Ruhollah al-Musavi al-Khomeini, who lived in exile first in Najaf, Iraq--the burial place of Shiite Islam's first Imam, Ali-- and then in Neauphle-le Chateau, France. Khomeini had been banished by the Shah because of his intractable opposition to Westernization and his hatred of the monarchy. From abroad Khomeini and his minions steadily mobilized Iranians through clandestine cassettes that were smuggled into Iran, through pamphlets and books, and through messages injected into homilies delivered by the ulema--the Muslim priesthood--during Friday services at mosques all across the country. While Iran's westernized elite may still insist that the Shah's "liberal" regime wasn't that unpopular, ordinary Iranians did not want the monarchy to continue.

What is now widely called the Iranian "revolution" was actually a 13 month phenomenon that started on February 7, 1978, when the Shah's troops fired on rioters in the holy city of Qom, Khomeini's spiritual home. About 100 people were killed in what started as a protest against a scurrilous article that the Shah's supporters planted exactly a month earlier in the newspaper Ettelaat. It charged, not so subtly, that the septugenarian Ayatollah Khomeini enjoyed deviant sexual practices and that he was also a British agent. Most of the dead were seminary students, and soon the anti-Shah sentiment spread across the country. The monarch's soldiers were being increasingly ordered to fire into crowds at pro-Khomeini rallies. But the demonstrations escalated, as did the violence. By various estimates, more than 15,000 people--mostly innocent civilians -were killed in the 12 months preceding January 16, 1979, when the Shah and his wife, Empress Farah, fled Iran for Egypt.

Khomeini returned to Iran on February 1, 1979. He set about re establishing the twin pillars which had dominated Iranian society for hundreds of years: the Shia Muslim hierarchy and the bazaar merchants. It was the bazaaris who bankrolled much of Khomeini's revolution; they had resented the Western-style development schemes of the Shah and as natural conservatives they welcomed the arrival of a more conservative state under Khomeini. Just how rigidly conservative Iran would soon become was something that the bazaaris--or anyone else--could hardly have anticipated.

There are few reminders in Iran these days of the 1978-79 revolution. The billboards along the six-lane highway from Teheran to Qom once denounced the United States as the "Great Satan"; now they caution drivers against speeding and urge motorists to fasten their seat belts. Qom itself seems like just another dusty, chaotic Iranian city, with a plethora of mosques and a warren of bazaars where vendors offer sohan--a chewy nougat filled with pistachio--trinkets and color pictures of Iranian leaders. The main street, Kheyabun-e Imam Khomeini, is usually packed with mullahs, and seminary students, in their flowing brown and black tunics, and neat white shirts and turbans. Near some of the mosques are rows of bookstores offering scholarly tomes in Persian on every aspect of Islamic theology. Fatemeh, sister of Emam Reza (whose shrine is in another holy city, Mashad), is buried here; the golden cuppola of her 9th century tomb is dazzling. The nearby Majid-e-Jame, with its intricate mosaic and blue tiles reflects the high style of the Safavid period, when architecture and the fine arts flourished in Persia.

Qom is the seat of Iran's powerful clergy, a center of theology and political intrigue.To the outside world, Iran's Shiite Islam clergy often seems like an homogenous establishment, unified in its opposition to the United States and determined to root out Westernization within Iran. But the clergy are far from united on most major issues of governance and development, and increasingly their leadership during the post-Revolution years is being questioned by ordinary Iranians who accuse them of incompetence and corruption. As a result, a key debate that is shaping up in Iran today revolves around whether Islamic values should be further imposed--by force, if necessary--or whether Iranians should be afforded more civic rights and freedoms spelled out in the 1979 Constitution.

Iran's power structure and the role of the ayatollahs is still evolving. Few outsiders have access to theocratic decision-making, and the occasional interview that is granted by a religious figure here scarcely sheds light on the mullahs' thinking. I was impressed, however, by a recent paper by Bijan Khajehpour of the Petroleum Finance Company of Washington, DC, in which he carefully outlined how the Islamic theocracy rose to pre eminence in Iran.

During the revolutionary period leading up to the toppling of Shah Mohammed Reza Pahlevi in 1979, the main clergy association was the Jame-e-Rohaniyat-e Mobarez, the Society of Combatant Clergy. It mobilized a vast network of religious figures within Iran, and also tapped Iranian exiles who financed the anti-monarchy movement.

Following the fall of the Shah in 1979, the clergy and their supporters split into what can be characterized as three factions: conservative, moderate and leftist. The conservatives sought to forcefully impose Islamic values on all sections of Iranian society, and pushed the notion of the "divine right" of the clergy to rule without any questioning of their leadership.

The main organizations in the conservative camp are: Jame-e Rohaniyat-e Mobarez (the Society of Combatant Clergy); Jamiyat-e Motakefeh Eslami (Society of Islamic Coalition); and various organizations who call themselves Tashakkolhay-e Hamsou (United Institutions). The moderates rallied around Hashemi Rafsanjani, former speaker of the 270-member Majlis, or Parliament, and later president of the country. They advocated an open and liberal domestic cultural policy and the pursuit of economic liberalization, including greater trade with the West.

The chief organization of this faction, consisting of clerics and technocrats, is Kargozaran-e Sazandegi (Executives of Construction). And the leftists in Iran are actually the most hardline faction among the clerics, calling for continued hostility toward the US and Britain--although their harsh rhetoric seems to have softened since 1992, when they lost badly to the conservatives in the parliamentary election. The main organizations of the leftists is Majma-e Rouhaniyoun-e Mobarez (Association of Combatant Clergy) and the Organization of of Mujahedin of Islamic Revolution.

Although President Mohammed Khatami--a cleric himself and a founder member of the Majma-e Rouhaniyoun-e Mobarez (Association of Combatant Clergy)--is the highest publicly elected official in Iran, there are four religious centers of powers he must deal with, and whose cooperation he needs.

The highest authority in Iran is Ayatollah Ali Khamenei, who became the country's "Leader of the Revolution" upon the death of Ayatollah Khomeini in June 1989. (The Iranian Constitution requires that the nation's "Leader" have the rank of an ayatollah.) Then there is the Assembly of Experts, the highest leadership organ in the Islamic regime, which consists of 83 top clerics--elected by public vote--who have the right to ratify government appointments.

The 12-member Guardian Council is the religious supreme court in Iran, entrusted with approving all laws passed by the parliament. Finally, there is the Majma-e Tashkhiss-e Maslahat-e Nezam, the 26-member Expediency Council which is headed by former president Rafsanjani; it mediates between the Guardian Council and the disputatious parliament. Because of Rafsanjani's enormous clout and popularity, the Expediency Council is widely thought to be growing in power--and its members seem inclined toward greater liberalization of the economy, greater freedoms of ordinary Iranians, and overtures to the US.

Although President Khatami is clearly seeking to diversify his power base by encouraging civil-society organizations to contribute toward policy making, in the short run the Iranian clergy will continue to enjoy high influence. Shia Islam clergy has four ranks: Hojjatoleslam, or student of preliminary theological studies; Hojjatoleslam val Moslemin, student of advanced theological studies; Ayatollah, who has completed the most advanced theological studies; and Grand Ayatollah, who has presented his Resaleh, or thesis, in theological studies and who has followers of his own thesis and ideas. It is estimated that there are more than 2 million clergy in Iran of all ranks.

In addition to the clergy, President Khatami must deal with other centers of power. They are: the judiciary; the army; the Pasdaran, or Revolutionary Guards; the National Security Council; the hugely wealthy public foundations, such as Bonyad-e Mostazafin va Janbazan (Foundation of the Deprived and the War Veterans), and the Bonyad-e 15 Khordad, which placed a bounty of $2.5 million on the Indo-British writer, Salman Rushdie, because he allegedly blasphemed the Prophet Mohammed in "The Satanic Verses." There is also the constituency of the rich bazaaris, the traders and merchants who helped finance Khomeini's revolution.

And there is the Astan-e Ghods-e Razawi, the most important Shia shrine in Iran, the mausoleum of Imam Reza in Mashad in eastern Iran. The institution runs Iran's largest province, Khorassan, and has great political clout around the country.

It was in Mashad that a landmark population seminar was organized by the Ministry of Health and Medical Education in 1988. A ceasefire had just been reached with Iraq, bringing eight years of a debilitating war to an inconclusive end. The Ministry had been concerned over the findings of the 1986 national census which showed that between 1977 and 1986, Iran had added 16 million people; annual population growth was at an unsustainable rate of 3.2 percent. After the ceasefire, the Ministry quietly initiated a series of discussions on Iran's population problem. Ayatollah Khomeini then approved a national "dialogue" on the subject--code for approval of an accelerated family planning program.

Dr. Kamel Shadpour of the Ministry of Health and Medical Education recalls that the Mashad seminar was the first national gathering at which sensitive population issues were discussed after the 1979 revolution. "It was a breakthrough," Dr. Shadpour told me in his Teheran office, which was lined with books and reports and had a long blackboard in the fashion of a classroom. "The seminar enabled the government to renew a national family planning program after a hiatus of nearly a decade."

The Mashad seminar was attended by top government officials, including many cabinet members. Participants recommended that the government should come up with a comprehensive family planning program in order to slow down the country's population growth rate. A United Nations document notes that the first indication of the government's "firm commitment to recognize family planning and fertility regulation as an official policy" was theincorporation of a strong population component in the First Five-Year Development Plan of 1989-1993. The plan contained demographic goals of lowering the annual population growth rate to 2.9 percent.

A senior UN official based in Teheran told me: "Let me tell you that back in 1990, when the UN got involved seriously in family planning here, if you would say to somebody that you were running a population program in Iran, they would laugh at you. They would say that you would never succeed within an Islamic setting because this is very much a controversial issue. The Prophet had sayings to the effect that it was better to have more children. But we began telling the government that if they wanted to reduce some of the economic difficulties facing the country then they simply had to do something about the population situation. And they agreed."

If the Mashad seminar in 1988 was a watershed in Iran's family planning history, the UN's "World Population Day" in 1992 was no less significant. On that day, various cabinet ministers attended a ceremony in Teheran during which they spoke about the need to widen health-care and population services. But the speech that everyone particularly took notice of was made by Ayatollah Makaran, then the head of the Qom Theological Seminary.

He said that what was attributed to the Prophet and the Koran about large families was not quite relevant instruction for contemporary times. "There should be flexibility and we should be able to make some interpretation of our own," the ayatollah said. While it was commendable that Iran should be a big nation, he went on, it was hardly advisable that Iran be populated by poor and illiterate citizens. "I believe that Islam is very right to say that it's good to have more children because children are assets," the theologian said. "But what kind of a life are we going to give our children? We must think of that. If you pay attention to the teachings of Islam, you will see that our religion calls for the betterment of people's lives."

The Iranian government proceeded carefully. It persuaded various ministries to develop new programs emphasizing health care, education, housing and food-security. A family planning component was worked into each of these programs. Special priority was given to establishing medical schools and widening basic health care. The number of doctors graduating from medical schools each year increased from 667 in 1979--the year of the revolution--to 4,500 in 1996; in 1979, there were just 9 medical schools in Iran, by 1996 there were 39.

"The Iranians have learned how to build partnerships among different communities and constituencies," UNFPA's Nafis Sadik told me. "That combined with the rapid development of health services and the blessings of the religious leaders has accounted for the success of family planning here." By 1996, Iran had lowered its annual population growth rate to under 2 percent. The Second Five-Year Development Plan (1995-1999) emphasizes coordination among various ministries in the social sector and among various nongovernmental organizations. Such coordination is aimed at firmly establishing population as a key element in Iran's sustainable development programs.

"In Iran," Dr. Shadpour of the Ministry of Health and Medical Education, told me. "Development isn't just a nice catchy slogan. We have understood that in order to be meaningful, development must translate into social justice."

Dr. Shadpour's concern is underscored by the fact that, notwithstanding the relative calm of Iran today, the years ahead are likely to impose fresh pressures on the country's ability to cope with the demands for jobs, housing and better health-care. That is because 50 percent of the country's population is under 20 years of age--which means that a huge cohort of men and women are about to enter the child-bearing age. In Iran, girls are legally permitted to marry at 15, and while the authorities are encouraging people to marry later, old customs aren't easily eradicated. This means that the number of people being added to Iran's population each year will grow from 1 million today to nearly twice that figure in another five years. Though almost 50 percent of the current annual budget of $63 billion is allocated to social services--with $100 million for family-planning and reproductive-health--population growth will almost surely render even this formidable expenditure wholly inadequate.

* * *

I was intrigued by the fact that the country's religious leaders had come around to supporting family planning. After all, wasn't family planning against Islamic traditions?

I posed that question one morning in Isfahan to Seyed Ali Fouladi, a local mullah in Isfahan. He was visiting the Sajad Health Center, a neatly organized facility that offered services such as contraception instruction, vasectomies and Norplant implants for women. For some reason I was startled by the mullah's youth; he couldn't have been much more than 30. He wore a white turban, brown cape, white shirt and an olive-green tunic. His white-stockinged feet were enveloped by brown slippers.

"We favor small families because we simply couldn't adequately educate large families," the mullah said. "And our religion calls for an educated public." Certainly a practical approach in a country where the percapita income is still under $2,000 and the inflation rate is 30 percent.

Did he encounter resistance from his parishioners? Not at all, the mullah said. "I often quote from the Koran," he said, "and I say that people should only have as many children as they can afford to properly take care of. Children are a precious treasure, and parents are obligated to enhance the value of every birth."

I asked Fouladi if his youth was an advantage when he discussed population issues. "Certainly," he said. "The older mullahs often experience a generation gap." He was alluding to the fact that 50 percent of Iran's population is under 20 years of age.

We were talking in a room that was filled with a number of women volunteers. They all wore chadors or the hijab, also a black cloak. I asked the mullah about the role of women in promoting development.

"There's no difference in the role assigned to men and women," the mullah said. "Both have a responsibility to serve the community."

I asked one of the volunteers, Zahra Taherian, about what she saw as her "responsibility." She was just 19, possessed a high school diploma, and worked three days a week with families in the Isfahan area. She focused on promoting better hygiene, better nutrition for children, and on persuading women to have small families.

"I like health issues," Zahra said. "This work enables me to stay within our culture and religion. The Koran says that we must help our neighbors. What I'm doing is something very concrete and specific." Fouladi, the mullah, said: "The mosques encourage young people to serve the community."

Zahra told me that her mother worked as a volunteer during the Iraq-Iran war and that this "was an inspiration for me." Her father, a worker at a sugar factory, supported her decision to become a community volunteer. Was the fact that Zahra was young and single a disadvantage when dealing with married women? "Not at all," Zahra said, "this way I can also relate to these mothers' daughters."

Zahra has been a volunteer for about two years now. Shahla Nazenan, a mother of two children, has been a behvarz for more than five years. "I always like to be out there to help," she said. "When I see a family struggling to support 10 children, I instinctively think, 'How are these kids going to be properly raised?'" Her work involves explaining contraceptive methods to local mothers, and persuading them to come for regular checkups at facilities such as the Sajad Health Center, which is run by the local municipality.

Another community volunteer, Susan Jozdani, told me of a recent encounter with a 17-year-old woman. "This woman already had five children," Susan said. "I decided that I was going to speak to her husband about the situation." Now both husband and wife come to the Sajad Health Center for regular counseling on family planning--and for contraceptives. "I'm glad to have played a role in their decision not to have more children. Five was enough."

Despite all the talk of Islamization, the fact remains that it helps ordinary Iranians to be fluent in English and in Western knowhow in obtaining good jobs. Morteza Hassani is a case in point.

He is 28 years old, stocky, and single. He just graduated from the University of Tehran ("Daneshgahe Tehran") with honors in mechanical engineering. Just getting into university in Iran is a huge challenge, Hassani explained, because some 2 million students graduate from Iranian high schools each year and there are places for only 300,000.

In order to obtain a bachelor's degree, Hassani had to earn 140 credits over four years. Of these, 32 credits were required to be in Islamic Studies. He opted to learn English. Why English? Because it proved useful to him as he moonlighted as a night receptionist at the Raamdin Hotel in Teheran, earning money that would supplement his two brothers' income and pay the rent for the small apartment they shared. Because many guests at the hotel were visiting diplomats and aid workers, Hassani soon found himself in demand not only for his knowledge of local conditions: an entrepreneur at heart, he decided that he would give informal tours around Teheran to visitors. Cost: the equivalent of $5 per hour, but a nice sum in Iranian rials.

English also proved useful when it came to getting a job. A consortium of European construction companies needed a mechanical engineer specializing in pipes and circuits. Hassani proved to be the man. But it was his fluency in English, he says, that nailed down the job.

"People outside sometimes think that we live insulated lives in Iran," Hassani said. "Not true. The revolution is settling down, and young people are giving more and more thought to their careers, what role they can play in national development."

One of his brothers, Mostapha, is among those who decided to play his own special role in another sector of Iran's economy. An agricultural engineer, he returned home to Hamadan--about 300 miles from Teheran--to help his father, Abdei, run the family's 40-hectare farm. The farm, which produced wheat and beans, had been languishing on account of outmoded equipment and growing techniques. Mostapaha helped turn things around, securing bank loans for new equipment and reorganizing farm production. Now the farm yields more than 50 tons of wheat each year, and the Hassani family is prosperous.

Some things, of course, never change. "My parents are putting pressure on me to get married," said Morteza. A proposal was recently received from an eligible girl's family, Morteza met her, and now they plan to get married in a couple of months.

"I know that unemployment is high among young people," he said, referring to the 30 percent unemployment rate nationally. "But I've been fortunate. I just wish others were as fortunate as I am."

* * *

Certainly among the things the Iranians are trying to do in a big way is to eradicate illiteracy. One morning in Shahin Shahr, a small community outside the historical city of Isfahan, Forbes visited several adult literacy centers run by the Literacy Movement Organization. The LMO is a deeply conservative group, and its local head, Abdullah Akbarzadeh, is a stout, bearded man who favors the typical post-Revolution light-blue suit with no tie.

He came armed with statistics about the increasing literacy among the non-schoolgoing public: in Isfahan province, which contains 4.5 million people, there was 87 percent literacy. More than 66,000 people, mostly women who had not had the chance to be formally educated, were now enrolled in his organization's free program. Barely 10 years ago, he said, the literacy rate was just 40 percent.

At one literacy center, which this correspondent spotted at random in Shahin Shahr, an elderly woman named Fatemah Khousari was among two dozen women attending a class taught by a woman at least 50 years her junior, Irandocht Sourani, a volunteer like other teachers in the literacy project.

At her age, why did Fatemah bother with the literacy program? "This way I can finally read the Koran," Fatemah said, referring to Islam's Holy Book. "This way I don't need any mullah to interpret the Koran. I can also help my grandchildren with their homework. I feel much more useful this way."

Abdullah Akbarzadeh had also come armed with questions for his visitor. "Why do Americans hate us?" he asked. "What can be done to make Americans understand us better?"

Americans don't necessarily hate Iranians, his visitor said, it was just that there were major differences in political ideas that were probably irreconciliable.

"Nothing is irreconciliable," Akbarzadeh said, not entirely with conviction.

* * *

At the heart of Iran's economic worries are two key factors: the fact that 50 percent of its population of 70 million is under 20 years of age; and the rapid urbanization that has afflicted already large cities such as Teheran, the capital, Isfahan, Hamadan and Mashad. What this means is that Iran is going to have to come up with more and more funds to promote economic growth--to generate jobs, create new housing and provide social infrastructure.

Where will the funds come from? Oil and natural-gas revenues, which currently amount to $18 billion annually, account for more than 80 percent of Iran's overall foreign-exchange earnings. (In 1996, Iran's oil exports amounted to $15.4 billion out of a total export figure of $20 billion, the balance being revenues from mostly agricultural products.) So, in the foreseeable future, the petroleum and energy sector will continue to be the mainstay of the country's economy.

But Iran's oil sector is in pressing need of investment and technology. Julia Nanay, director of the Washington-based Petroleum Finance Company, says that if Iran doesn't invest around $7 billion annually in upgrading its oil and natural-gas sector, it seriously risks losing its export capability.

"As OPEC's largest producer after Saudi Arabia, Iran has a special role to play but it's in the context of a largely irrelevant organization," says Nanay. Of the 74 million barrels a day of total estimated world oil demand for 1997, OPEC producers will satisfy less than 40 percent. World demand for oil is expected to rise to nearly 105 million barrels a day by 2015, according to the Energy Information Agency.

Will Iran (and other OPEC countries) be able to meet such demand without "busting quotas"? As a growing list of non-OPEC producers continues to flood the market, OPEC is feeling the squeeze.

Iran's oil production was around 6 million barrels a day prior to the the fall of Shah Mohammed Reza Pahlevi in 1979. The current figure is around 3.7 million barrels a day, most of it from onshore fields that are badly in need of upgrading; the government wants to increase daily oil production to 4.5 million barrels by 2000. Offshore production has increased in the last two years by 200,000 barrels a day to 550,000 barrels. Iran's current oil reserves are 88 billion barrels, and its goal is to increase offshore production to a million barrels a day by 2000--but that is going to require foreign investment.

Iran's new Oil Minister Bijan Namdar Zanganeh may be strengthening ties with his Gulf neighbors and fellow OPEC members Saudi Arabia, Kuwait and the UAE but they already belong to the camp of "quota adherers." It may be too late to bring OPEC's "quota busters" (such as Venezuela) to heel. In the end, Zanganeh may find it even in his own interest to let the revenue imperative govern and toss quota adherence out the window, says Nanay.

Iran also has the world's second largest natural gas reserves, after Russia, or 740 trillion cubic feet; it accounts for 47 percent of the gas reserves in the Middle East and for about 14 percent of the world's total gas reserves, says Nanay. It finds that gas is increasingly important to its neighbors, which lack reserves and production facilities--and therefore need to import. So it is positioning itself as a prime supplier.

According to the Petroleum Finance Company, Iran's plans call for an increase in gas production from 2.7 trillion cubic feet in 1995 to 4.7 trillion cubic feet by 2000. The government wants to reduce the growth in oil consumption so as to free up more oil for export--and is therefore committed to gas substitution. However, gas needs pipelines for transportation not only for exports but also to connect into the existing (and aging) national grid- and here again, Iran needs foreign investment.

Since US policy forbids American firms from entering into contracts involving Iranian gas, it's the Europeans who'

Pranay Gupte,
Senior Writer and Global-Affairs Columnist

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