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BACKGROUND NOTES:  IRAN
PUBLISHED BY THE BUREAU OF PUBLIC AFFAIRS
U.S. DEPARTMENT OF STATE

JULY 1994
Official Name:  Islamic Republic of Iran

PROFILE

Geography
Area:  1.6 million sq. km. (636, 294 sq. mi.); slightly larger
than Alaska.

Cities:  Capital--Tehran. Other cities--Isfahan, Tabriz, Mashhad,
Shiraz.

Terrain:  Desert and mountains.

Climate:  Semiarid; subtropical along the Caspian coast.


People

Nationality:  Noun and adjective--Iranian(s).

Population (1992):  61 million.

Annual growth rate (1992):  3.5%.

Ethnic groups (1992):  Persian; Azeri Turks; Kurds; Arabs;
Turkomans and Baluchis; and Lur, Bakhtiari, and Qashqai tribes.

Religions:  Shi'a Muslim 95%; Sunni Muslim 4%; Zoroastrian,
Jewish, Christian, and Baha'i 1%.

Languages:  Persian, Turkish dialects, Kurdish, Luri, Gilaki,
Arabic.

Education (1992):  Literacy--50%.

Health (1992):  Infant mortality rate--64/1,000.  Life
expectancy--65 years.

Work force:  Agriculture--33%.  Manufacturing--21%.  There is a
shortage of skilled labor.


Government

Type:  Islamic republic.

Constitution:  Ratified December 1979, revised 1989.

Branches:  Executive--"Leader of the Islamic Revolution" (head of
state); president and Council of Ministers.
Legislative--270-member National Consultative Assembly (Majles).
Judicial--Supreme Court.

Political parties:  None.

Suffrage:  Universal at 15.

Administrative subdivisions:  25 provinces.

Flag:  Three horizontal bands of green, white, and red, with the
national emblem, a stylized representation of the word Allah, in
the center.


Economy

GDP (est.):  $90 billion.

Annual growth rate (est.):  5%.

Per capita income (est.):  $1,500.

Natural resources:  Petroleum, natural gas, and some mineral
deposits.

Agriculture:  Principal products--wheat, rice, other grains,
sugar beets, fruits, nuts, cotton, dairy products, wool, caviar;
not self-sufficient in food.

Industry:  Types--petroleum, petrochemicals, textiles, cement and
building materials, food processing (particularly sugar refining
and vegetable oil production), metal fabricating (steel and
copper).

Trade:  Exports--$18 billion:  petroleum 90%, carpets, fruits,
nuts, hides.  Imports--$28 billion:  food, machinery, and medical
products.  Major markets/suppliers:  Germany, Japan, Italy, U.K.,
France.

Exchange rate (1994, unofficial):  2,600 rials=U.S. $1.





PEOPLE
Almost two-thirds of Iran's people are of Aryan origin--their
ancestors migrated from Central Asia.  The major groups in this
category include Persians, Kurds, Lurs, and Baluchi.  The
remainder are primarily Turkic but also include Arabs, Armenians,
Jews, and Assyrians.

The 1979 Islamic revolution and the war with Iraq transformed
Iran's class structure politically, socially, and economically.
In general, however, Iranian society remains divided into urban,
market-town, village, and tribal groups.  Clerics, called
mullahs,  dominate politics and nearly all aspects of Iranian
life, both urban and rural.  After the fall of the Pahlavi regime
in 1979, much of the urban upper class of prominent merchants,
industrialists, and professionals, favored by the former Shah,
lost standing and influence to the senior clergy and their
supporters.  Bazaar merchants, who were allied with the clergy
against the Pahlavi shahs, have also gained political and
economic power since the revolution.  The urban working class has
enjoyed somewhat enhanced status and economic mobility, spurred
in part by opportunities provided by revolutionary organizations
and the government bureaucracy.

Unemployment, a major problem even before the revolution, has
many causes, including population growth, the war with Iraq, and
shortages of raw materials and trained managers.  Farmers and
peasants received a psychological boost from the attention given
them by the Islamic regime but appear to be hardly better off in
economic terms.   The government has made progress on rural
development, including electrification and road building but has
not yet made a commitment to land redistribution.

Most Iranians are Muslims; 95% belong to the Shi'a branch of
Islam, the official state religion, and about 4% belong to the
Sunni branch, which predominates in neighboring Muslim countries.
Non-Muslim minorities include Zoroastrians, Jews, Baha'is, and
Christians.


HISTORY
The ancient nation of Iran, historically known to the West as
Persia and once a major empire in its own right, has been overrun
frequently and has had its territory altered throughout the
centuries.  Invaded by Arabs, Seljuk Turks, Mongols, and
others--and often caught up in the affairs of larger powers--Iran
has always reasserted its national identity and has developed as
a distinct political and cultural entity.

Archeological findings have placed knowledge of Iranian
prehistory at middle paleolithic times (100,000 years ago).  The
earliest sedentary cultures date from 18,000-14,000 years ago.
The sixth millennium B.C. saw a fairly sophisticated agricultural
society and proto-urban population centers.  Many dynasties have
ruled Iran, the first of which was under the Achaemenians
(559-330 B.C.), a dynasty founded by Cyrus the Great.  After the
Hellenistic period (300-250 B.C.) came the Parthian (250 B.C.-226
A.D.) and the Sassanian (226-651) dynasties.

The seventh-century Arab-Muslim conquest of Iran was followed by
conquests by the Seljuk Turks, the Mongols, and Tamerlane.  Iran
underwent a revival under the Safavid dynasty (1502-1736), the
most prominent figure of which was Shah Abbas.  The conqueror
Nadir Shah and his successors were followed by the Zand dynasty,
founded by Karim Kahn, and later the Qajar (1795-1925) and the
Pahlavi dynasties (1925-1979).

Modern Iranian history began with a nationalist uprising against
the Shah (who remained in power) in 1905, the granting of a
limited constitution in 1906, and the discovery of oil in 1908.
In 1921, Reza Khan, an Iranian officer of the Persian Cossack
Brigade, seized control of the government.  In 1925, he made
himself Shah, ruling as Reza Shah Pahlavi for almost 16 years and
installing the new Pahlavi dynasty.

Under his reign, Iran began to modernize and to secularize
politics, and the central government reasserted its authority
over the tribes and provinces.  In September 1941, following the
Allies' (U.K.-Soviet Union) occupation of western Iran, Reza Shah
was forced to abdicate.  His son, Mohammad Reza Pahlavi, became
Shah and ruled until 1979.

During World War II, Iran was a vital link in the Allied supply
line for lend-lease supplies to the Soviet Union.  After the war,
Soviet troops stationed in northwestern Iran not only refused to
withdraw but backed revolts that established short-lived,
pro-Soviet separatist regimes in the northern regions of
Azerbaijan and Kurdistan.  These were ended in 1946.  The
Azerbaijan revolt crumbled after U.S. and UN pressure forced a
Soviet withdrawal and Iranian forces suppressed the Kurdish
revolt.

In 1951, Premier Mohammed Mossadeq, a militant nationalist,
forced the parliament to nationalize the British-owned oil
industry.  Mossadeq was opposed by the Shah and was removed, but
he quickly returned to power.  The Shah fled Iran but returned
when supporters staged a coup against Mossadeq in August 1953.
Mossadeq was then arrested by pro-Shah army forces.

In 1961, Iran initiated a series of economic, social, and
administrative reforms that became known as the Shah's White
Revolution.  The core of this program was land reform.
Modernization and economic growth proceeded at an unprecedented
rate, fueled by Iran's vast petroleum reserves, the third-largest
in the world.

In 1978, domestic turmoil swept the country as a result of
religious and political opposition to the Shah's rule and
programs--especially SAVAK, the hated internal security and
intelligence service.  In January 1979, the Shah left Iran; he
died abroad several years after.

On February 1, 1979, exiled religious leader Ayatollah Ruhollah
Khomeini returned from France to direct a revolution resulting in
a new, theocratic republic guided by Islamic principles.  Back in
Iran after 15 years in exile in Turkey, Iraq, and France, he
became Iran's national religious leader.  Following Khomeini's
death on June 3, 1989, the Assembly of Experts--an elected body
of senior clerics--chose the outgoing president of the republic,
Ali Khamenei, to be his successor as national religious leader in
what proved to be a smooth transition.

In August 1989, Ali Akbar Hashemi-Rafsanjani, the speaker of the
National Assembly, was elected President by an overwhelming
majority.  He was re-elected June 11, 1993, with a more modest
majority of about 63%; some Western observers attributed the
reduced voter turnout to disenchantment with the deteriorating
economy.


GOVERNMENT
The December 1979 Iranian constitution defines the political,
economic, and social order of the Islamic republic.  It declares
that Shi'a Islam of the Twelver (Jaafari) sect is Iran's official
religion.  The country is governed by secular and religious
leaders and governing bodies, and duties often overlap.  The
chief ruler is a religious leader or, in the absence of a single
leader, a council of religious leaders.  The constitution
stipulates that this national religious leader or members of the
council of leaders are to be chosen from the clerical
establishment on the basis of their qualifications and the high
esteem in which they are held by Iran's Muslim population.  This
leader or council appoints the six religious members of the
Council of Guardians (the six lay members--lawyers--are named by
the National Consultative Assembly, or Majles); appoints the
highest judicial authorities, who must be religious jurists; and
is commander-in-chief of the armed forces.  The Counc!
il of Guardians, in turn, certifie
s the competence of candidates for the presidency and the
National Assembly.

The president of the republic is elected by universal suffrage to
a four-year term by an absolute majority of votes and supervises
the affairs of the executive branch.  The president appoints and
supervises the Council of Ministers (members of the cabinet),
coordinates government decisions, and selects government policies
to be placed before the National Assembly.

The National Assembly consists of 270 members elected to a
four-year term.  The members are elected by direct and secret
ballot.  All legislation from the assembly must be reviewed by
the Council of Guardians.  The Council's six lawyers vote only on
limited questions of the constitutionality of legislation; the
religious members consider all bills for conformity to Islamic
principles.

In 1988, Ayatollah Khomeini created the Council for Expediency,
which resolves legislative issues on which the Majles and the
Council of Guardians fail to reach an agreement.  Since 1989, it
has been used to advise the national religious leader on matters
of national policy as well.  It is composed of the heads of the
three branches of government, the clerical members of the Council
of Guardians, and members appointed by the national religious
leader for three-year terms.  Cabinet members and Majles
committee chairs also serve as temporary members when issues
under their jurisdictions are considered.

Judicial authority is constitutionally vested in the Supreme
Court and the four-member High Council of the Judiciary; these
are two separate groups with overlapping responsibilities and one
head.  Together, they are responsible for supervising the
enforcement of all laws and for establishing judicial and legal
policies.

The military is charged with defending Iran's borders, while the
Revolutionary Guard Corps is charged mainly with maintaining
internal security.  Iran has 25 provinces, each headed by a
governor general.  The provinces are further divided into
counties, districts, and villages.

Principal Government Officials
Leader of the Islamic Revolution--Ali Hoseini-Khamenei
President--Ali Akbar Hashemi-Rafsanjani
First Vice President--Dr. Hasan Ebrahim Habibi
Foreign Minister--Ali Akbar Velayati
Ambassador to the United Nations--Dr. Kamal Ali Naqi Kharazi


POLITICAL CONDITIONS
Iran's post-revolution difficulties have included an eight-year
war with Iraq, internal political struggles and unrest, and
economic disorder.  The early days of the regime were
characterized by severe human rights violations and political
turmoil, including the seizure of the U.S. embassy compound and
its occupants on November 4, 1979, by Iranian militants.

By mid-1982, a succession of power struggles eliminated first the
center of the political spectrum and then the leftists, leaving
only the clergy.  There has been some moderation of excesses both
internally and internationally, although Iran remains a
significant sponsor of terrorism.

The Islamic Republican Party (IRP) was Iran's dominant political
party until its dissolution in 1987; Iran now has no functioning
political parties.  The Iranian Government is opposed by a few
armed political groups including the Mojahedin-e-Khalq (People's
Mojahedin of Iran), the People's Fedayeen, and the Kurdish
Democratic Party.


ECONOMY
Pre-revolutionary Iran's economic development was rapid.
Traditionally an agricultural society, by the 1970s, Iran had
achieved significant industrialization and economic
modernization.  However, the pace of growth had slowed
dramatically by 1978, just before the Islamic revolution.

Since the revolution, increased government involvement in the
economy has further stunted growth.  Iran's current difficulties
can be traced to a combination of factors.  Economic activity,
severely disrupted by the revolution, was further depressed by
the war with Iraq and by the decline of oil prices beginning in
late 1985.  After the war with Iraq ended, the situation began to
improve:  Iran's GDP grew for two years running, partly from an
oil windfall in 1990, and there was a substantial increase in
imports.

A decrease in oil revenues in 1991 and growing external debt,
though, dampened optimism.  In March 1989, Khomeini had approved
Rafsanjani's five-year plan for economic development, which
allowed Iran to seek foreign loans.  But mismanagement and
inefficient bureaucracy, as well as political and ideological
infighting, have hampered the formulation and execution of
coherent economic policies.

All major business and industrial growth indicators are
significantly below pre-revolutionary levels; unemployment was
estimated to be 30% for 1993.  Although Islam guarantees the
right to private ownership, banks and some industries--including
the petroleum, transportation, utilities, and mining
sectors--have been nationalized.  The import-dependent industrial
sector is further plagued by low labor productivity, lack of
foreign exchange, and shortages of raw materials and spare parts.

Agriculture also has suffered from shortages of capital, raw
materials, and equipment, as well as from the war with Iraq; in
addition, a major area of dissension within the regime has been
how to proceed with land reform.

Oil revenues have been affected by the decline of oil prices.
Oil accounts for about 90% of Iran's exports; because of reduced
revenues, the government has imposed austerity measures, adding
to the hardships of the Iranian people.  In 1993, Iran's OPEC
quota was about 3.4 million barrels per day, and estimated
production was 3.5 million barrels per day.

Iran was unable to meet its obligations on short-term debt in
1993; by the end of the year, it was more than $9 billion in
arrears on payments.  Early in 1994, estimates of Iran's debt
ranged from $16 billion to $30 billion.


FOREIGN RELATIONS
Khomeini's revolutionary regime initiated sharp changes from the
foreign policy pursued by the Shah, particularly in reversing the
country's orientation toward the West.  In the Middle East,
Iran's only significant ally has been Syria.  Iran's regional
goals are dominated by wanting to establish a leadership role,
curtail the presence of the U.S. and other outside powers, and
build trade ties.

In broad terms, Iran's "Islamic foreign policy" emphasizes:

--  Vehement anti-U.S. and anti-Israel stances;
--  Eliminating outside influence in the region;
--  Exporting the Islamic revolution;
--  Support for Muslim political movements abroad; and
--  A great increase in diplomatic contacts with developing
countries.

Despite these guidelines, however, bilateral relations are
frequently confused and contradictory due to Iran's oscillation
between pragmatic and ideological concerns.

The country's foreign relations since the revolution have been
tumultuous.  In addition to the U.S. hostage crisis, tension
between Iran and Iraq escalated in September 1980, when Iraq
invaded Iran.  Much of the dispute centered around sovereignty
over the waterway between the two countries, the Shatt al-Arab,
although underlying causes included each nation's overt desire
for the overthrow of the other's government.  Iran demanded the
withdrawal of Iraqi troops from Iranian territory and the return
to the status quo ante for the Shatt al-Arab as established under
the 1975 Algiers Agreement signed by Iraq and Iran.  After eight
punishing years of war, in July 1988, Iran agreed to UN Security
Council Resolution 598, which called for a cease-fire.  The
cease-fire was implemented on August 20, 1988; neither nation had
made any real gains in the war.

Iran's relations with many of its Arab neighbors have been
strained by Iranian attempts to spread its Islamic revolution.
In 1981, Iran supported a plot to overthrow the Bahraini
Government.  In 1983, Iran expressed support for Shi'ites who
bombed Western embassies in Kuwait, and in 1987, Iranian pilgrims
rioted during the Hajj (pilgrimage) in Mecca, Saudi Arabia.
Nations with strong fundamentalist movements, such as Egypt and
Algeria, also mistrust Iran.  Iran backs Hizballah, Hamas, the
Palestinian Islamic Jihad, and the Popular Front for the
Liberation of Palestine-General Command--all groups violently
opposed to the Arab-Israeli peace process.

Relations with Western European nations have alternated between
improvements and setbacks.  French-Iranian relations were badly
strained by the sale of French arms to Iraq.  Since the war,
relations have improved commercially but periodically are
worsened by Iranian-sponsored terrorist acts committed in France.


Another source of tension has been Ayatollah Khomeini's 1989 call
for all Muslims to kill Salman Rushdie, British author of The
Satanic Verses, a novel many Muslims consider blasphemous.  The
United Kingdom has sheltered Rushdie, and strains over this issue
persist.

Iran maintains regular diplomatic and commercial relations with
Russia and the other Newly Independent States of the former
Soviet Union.  Both Iran and Russia feel they have important
national interests at stake in developments in Central Asia and
the Transcaucasus. Russian and other sales of military equipment
and technology concern Iran's neighbors and the United States.

Iran spends about 14%-15% of its GDP on its military.  Branches
of its military include ground forces, a navy, an air force, and
Revolutionary Guard Corps.  The Iran-Iraq war took a heavy toll
on these military forces.  Iran is trying to modernize its
military and acquire weapons of mass destruction; it does not yet
have, but continues to seek, nuclear capabilities.


U.S.-IRANIAN RELATIONS
On November 4, 1979, militant Iranian students occupied the
American embassy in Tehran with the support of Ayatollah
Khomeini.  Fifty-two Americans were held hostage for 444 days.
On April 7, 1980, the United States broke diplomatic relations
with Iran, and on April 24, 1981, the Swiss Government assumed
representation of U.S. interests in Tehran.  Iranian interests in
the United States are represented by the Pakistani Government.

In accordance with the Algiers declaration of January 20, 1981,
the Iran-U.S. Claims Tribunal (located in The Hague, Netherlands)
was established for the purpose of handling claims of U.S.
nationals against Iran and of Iranian nationals against the
United States.  U.S. contact with Iran through The Hague covers
only legal matters.

Commercial relations between Iran and the United States consist
mainly of Iranian purchases of food and manufactured products.
The U.S. Government prohibits the export of military and dual-use
items to Iran as well as items forbidden under anti-terrorism
legislation; it prohibits all imports from Iran.

There are serious obstacles to improved relations between the two
countries.  The U.S. Government defines five areas of
objectionable Iranian behavior:  Iranian efforts to acquire
nuclear weapons and other weapons of mass destruction, its
involvement in international terrorism, its support for violent
opposition to the Arab-Israeli peace process, its threats and
subversive activities against its neighbors, and its dismal human
rights record.  The U.S. believes that normal relations are
impossible until Iran's behavior changes.  However, the United
States has offered to enter into dialogue with authorized
representatives of the Iranian Government without preconditions.
The Iranian Government has not accepted this offer.  The United
States has made clear that it does not seek to overthrow the
Iranian Government but will continue to pressure Iran to change
its behavior.





TRAVEL ADVISORY
The Department of State warns all U.S. citizens against travel to
Iran, where danger continues for Americans because of the
generally anti-American atmosphere and Iranian Government
hostility to the U.S. Government.  U.S. citizens traveling to
Iran have been detained without charge, arrested, and harassed by
Iranian authorities.  The U.S. Government does not have
diplomatic or consular relations with the Islamic Republic of
Iran and prohibits imports of goods from Iran as well as exports
of some goods to Iran.





Published by the United States Department of State  --  Bureau of
Public Affairs  --  Office of  Public Communication  --
Washington, DC  July 1994  --  Managing Editor:  Peter A. Knecht

Department of State Publication 7760  --  Background Notes Series

For sale by the Superintendent of Documents, U.S. Government
Printing Office, Washington, DC  20402.