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Historical profile
1906 Persia, ruled by the Qajar dynasty with a Shah (emperor) as head of state, adopted its first imperial constitution.

1921 A Cossack officer, Reza Khan, carried out a military coup, becoming prime minister in 1923.
1925 The Shah was deposed by the National Assembly and Reza Khan was subsequently elected Shah.

1935 Persia was renamed Iran.

1941 After the Shah sided with the Nazis, British and Soviet forces entered Iran and removed the Shah from power, replacing him with his son, Mohammed Reza Pahlavi.

1951 Iran's Assembly approved the nationalisation of the oil industry.

1954 Agreement was reached which granted drilling concessions to eight foreign oil companies.

1963 The Shah assumed complete control of government.

1979 Following several years of growing opposition the Shah was overthrown by forces loyal to the exiled religious leader, Ayatollah Khomeini, who took power on 11 February. The Islamic Republic of Iran was established.

1980-90 War with Iraq broke out after Iraq invaded Iran over a disputed border area. After a cease-fire was signed in 1988, 10 years of destructive and attritional war ended with a peace agreement signed in August 1990.

1996 At the general election in April, the Combatant Clergy Society (CCS) retained its position as the largest single group with some 120 deputies, down from 150-160 in the previous Assembly. The CCS lost around 20 seats to independents and the newly-formed reformist group, the Servants of Construction, which took 80 and was allied with President Ali Akbar Hashemi Rafsanjani.

Mohammed Khatami won the presidential election in May 1947, and re-appointed Hassan Habibi as vice president.

2000 In February parliamentary elections, supporters of President Khatami and their reformist allies won a convincing majority.

Political structure

Constitution

Iran became an Islamic Republic in April 1979, having previously been a monarchy under the Shah. The constitution of the Islamic Republic was formally adopted in December 1979. The constitution also provides for representation in the Majlis of non-Islamic minorities, Zoroastrians, Jews and Christians. However, power is wielded mainly by the Shi'a clergy.

Form of state

Islamic Republic

The executive

The Wali Faqih (Supreme Leader of the Islamic Revolution) retains overall control of all branches of government, including the judiciary and the revolutionary guard. He declares war and peace and can veto presidential nominations. His role combines spiritual leader, theological protector and supreme authority. The structure of the constitution is effectively split between the president, who is elected every four years, and the Faqih, although the Faqih maintains overall control.

The Wali Faqih, in his role as theological protector, appoints the Council for the Protection of the Constitution. All legislation adopted by the Majlis is scrutinised by the council to ensure that it is in keeping with Islamic principles and laws. The council consists of six religious lawyers.

The Council of Guardians is composed of 12 jurists and clerics, and has supervisory powers over elections and a right of veto over all legislation if it does not conform with Islamic law and the constitution. It is independent of the Faqih.

In 1986, the Expediency Council was established to mediate between the Majlis and the Council of Guardians. It is designed to resolve political decisions which cannot be solved through the main channels, but it is controlled by the spiritual leader.

A further adjunct to the Faqih's power is the Assembly of Experts which consists of 83 clerics who elect the next Faqih, interpret the constitution and approve Majlis decisions. The cumulative effect of this plethora of legislative institutions is that despite the enhancement of the president's power, following reform in 1989, he remains tightly constrained by these institutional checks and balances.

National legislature

The Islamic Consultative Assembly (Majlis Shura-e-Islami), is elected every four years. For the elections of February 2000, it was expanded from 270 to 290 members. Although MPs are technically independent, the Assembly is now very loosely divided along party political lines between the conservative clergy groupings and the reformist May 23 Front, named after the day of President Khatami's victory in 1997. The Majlis is elected by universal suffrage, with a voting age of 15.

Legal system

The judiciary is organised independently of the other branches of government. There are two types of courts: public and special. The Penal Courts, Special Civil Court and Islamic Revolution Courts adjudicate on the basis of Islamic laws, fixed since 1979 for a wide range of crimes.

Last elections

Majlis (parliamentary) elections: February 2000.

Political parties

Main opposition party

Conservative coalition, led by the Combatant Clergy Society.

Other political parties

Executives of Construction Party, Islamic Coalition Association, Militant Clerics Association, Kargozaran Party. In addition, there are several Kurdish rebel groups, including the Kurdish Communist Party of Iran (Komala), the Kurdish Democratic Party of Iran (KDP-Iran) and the National Liberation Army (NLA, based in Iraq).

Population

61.9 million (1999 estimate). The population growth rate for 1992-98 was 1.6 per cent per annum, and this is projected to remain the same for the period 1998-2015. During this period, the birth rate is projected to drop by 0.8 per cent. As a result of the falling birth rate and improved healthcare, the proportion of the population aged 65 and over is projected to rise from 4.5 per cent in 1997 to 4.8 per cent by 2015. In 1998, average life expectancy at birth was 69 years and 61 per cent of the population lived in urban areas.

Ethnic make-up

Predominantly Persian (55 per cent), with the second largest group being Azeris, concentrated in the north-west. Also Afghans, Kurds, Baluchis, Lurs, Turkmen, Arabs and nomads.

Religions

Islam of the Twelver Shi'a sect is dominant. A Sunni Muslim minority is concentrated in fringe areas of Iran. There are also small Baha'i, Christian, Jewish and Zoroastran communities.

Labour market and unemployment

The labour force totalled 18 million in 1997. The average annual growth rate in the labour force for the period 1992-98 was 4.4 per cent, and this is projected to fall to 3.2 per cent over the period 1997-2010. Women account for 25 per cent of the labour force.

The central bank's official figures put the active population at a lower figure of 17.3 million (1998-99), and the employed population at 15.0 million. This gives an unemployment rate of 13.3 per cent. The actual figure may be higher if the workforce is larger than official government figures suggest, and some unofficial estimates put the rate as high as 30 per cent in 1998.

The average take-home pay of an Iranian working for the government (about half of urban dwellers) is not enough to cover the average family's food and rent. Workers often have two or three jobs in addition to their official one.

Employment by sector 1990-97

% of workforce*

Male Female

Agriculture 30 73
Industry 26 9
Services 44 18

* Statistics may not equal 100 per cent due to the rounding
of figures.

Source: World Bank, World Development Indicators 1999



Education

Education is compulsory for eight years from the ages of six to 14. This is not fully effective in rural areas. Primary education is free and lasts for five years. Secondary education begins at 11 years and lasts for up to seven years, with a first course of three years and a second course of four years.

Education became a state monopoly following the 1979 Revolution, but a law passed in 1987 provided for the creation of private schools under certain conditions.

In 1999, the official estimate of the literacy rate for the whole population was 80.5 per cent. Among 15-24 year olds, the literacy rate for males was 95 per cent, and the rate for females was 90 per cent. In 1996, the percentage of the relevant age group enrolled in education was 98 per cent for primary, 77 per cent for secondary, and 17 per cent for tertiary. Public spending on education was equivalent to 4.0 per cent of GNP in 1996.

Health

The combined Ministry of Hygiene, Medical Care and Education is the authority responsible for health and medical care, controlling all related offices and organisations in the private sector as well as those directly funded by the state.

Between 1990 and 1997, 4.2 per cent of annual GDP was spent on health care; 2.5 per cent of this was public expenditure and 1.7 per cent private. The number of physicians per 1,000 population in the same period was 0.3 while the number of hospital beds per 1,000 population was 1.4. In 1998, 90 per cent of Iranians had access to safe water, 81 per cent had access to sanitation and 16 per cent of children under 5 were classed as malnourished.

In 1998, the mortality rate for infants was 26 per 1,000 live births. Under-five mortality was 35 per 1,000. Adult mortality was 165 per 1,000 for men and 162 per 1,000 for women.

Welfare

A large number of organisations, usually autonomous, are responsible for social welfare. Various foundations manage sequestered property worth billions of US dollars. They are responsible for the care of families of men killed in the war with Iraq, for war refugees and for rural development. At the local level in the cities and towns, mosque committees (komitehs) have funds which can be made available for poorer families considered deserving of support. The country's rationing system, giving coupons for limited quantities of staple foods and other items at heavily subsidised prices, is also run through mosques.

The Foundation for the Refugees of the Imposed War operates under the authority of Iran's Ministry of Labour and Social Affairs. It is responsible for the welfare of over two million of the country's internal refugees, or displaced persons, from the Iran-Iraq war. The Foundation takes total responsibility for refugee families, including finding accommodation, rations, education for their children and medical treatment where necessary.

Iran's Social Security Organisation, which comes under the authority of the Ministry of Hygiene, Medical Care and Education, is responsible for insuring 2.5 million Iranians, of whom 617,000 work in the state sector. The social security scheme covers some 260,000 factories, workshops and offices. Social security funds pay out regular benefits to 370,000 people.

Unemployment benefit is one of the schemes operated by the Social Security Organisation. It has only limited application in a country where unemployment and underemployment is chronic.

Main cities

Tehran (population estimated at 8 million in 1998), Isfahan, Mashhad, Tabriz, Shiraz, Ahvaz, Kerman, Rasht, Ramsar, Kermanshah and Hamadan.

Media

Press

The Iranian press has changed greatly since the revolution in 1979. Initially the freer political climate encouraged dozens of new publications reflecting the entire spectrum of opinions in the country. From 1981, the war with Iraq led to drastic changes, with many closures of newspapers, magazines and journals, and purges of editors with liberal, conservative or radical views.

President Khatami's election has resulted in a more independent press, and the establishment of reformist publications. Before 1997 only a handful of journals and newspapers existed, mostly mouthpieces for the conservative clerical establishment. All newspapers and magazines must be licensed; insults to senior religious figures are a criminal offence. The constitution guarantees freedom of the press but contains strict sanctions against publishing material contrary to public morality or that would insult religious beliefs or libel individuals. The official news agency is the Islamic Republic News Agency (IRNA).

Dailies: There are six main national daily newspapers. There are three English-language daily newspapers published from Tehran, the Tehran Times, Iran Daily and Kayhan International.

Weeklies: Weekly newspapers tend to be special interest publications.

Business: World Economy is published daily, and is the most popular business publication, although distribution is generally limited to Tehran.

Broadcasting

Radio: There are three national radio channels, Radio Networks 1 and 2 and Radio Quran. Regional and local radio programmes are broadcast in Arabic, Armenian, Assyrian, Azerbaijani, Baluchi, Bandari, Dari, Farsi, Kurdish, Mazandarani, Pashtu, Turkoman, Turkish and Urdu. The external radio service broadcasts in English, French, German, Spanish, Turkish, Arabic, Kurdish, Urdu, Pashtu, Armenian, Bengali, Russian and Farsi.

Television: Broadcasting is tightly controlled by the state and there have been many purges of editors whose views were not approved of. The state-run television network, Vision of the Islamic Republic of Iran, has 28 local channels. A 1994 edict banned the sale and use of satellite dish receivers, although their usage remain widespread.

Economy

Iranian economic statistics are published by the central bank in accordance with the Iranian calendar. Each Iranian year begins on 21 March according to the Gregorian calendar. The year 1378, for example, corresponds to 21 March 1999-20 March 2000.

Some 86 per cent of Iran's GDP comes from government-owned businesses, and only 14 per cent from the private sector. Only a few non-oil manufacturing companies and private or family-owned trading and agricultural companies are free from state control. An estimated 40 per cent of the economy is conducted on the black market.

In November 1999 the Council of Guardians rejected a bill from parliament which whould have exempted foreign companies in off-shore free trade zones from any threat of future nationalisation.

International observers have raised concerns about the sustainability of Iran's economic growth because of its high dependence on oil prices, fears that were borne out by the dramatic falls in oil prices in 1998 and early 1999. There are also concerns at the government's apparent willingness to print money to finance state-owned industries' deficits.

The non-oil sector of the economy is dominated by bonyad (state foundations) who tend to focus less on effective economic management and more on political clientelism. Against this backdrop, attempts to diversify the economy have proved ineffective.

The Second Five-Year Development Plan, which ran until March 2000, aimed at an annual average GDP growth rate of 5.1 per cent, led by industry and mining (5.9 per cent), agriculture (4.3 per cent) and services (3.1 per cent), showing the government's recognition that the economy must reduce its reliance on oil revenues. Oil growth was expected to slow to 1.6 per cent over the period of the Plan. Inflation was targeted to fall to an average of 12.4 per cent a year over the period.

Although official government figures show the economy to be on course to meet the targets of the five-year plan, foreign observers have expressed concern over the reporting of figures, particularly since the economy is dominated by state industries whose activities are opaque and complex. Reformist President Khatami, since coming to power in 1997, has attempted to tackle the lack of transparency in the bonyad in particular, resulting in fierce opposition from hardline clerics whose assets are tied up in such enterprises.

In 2000 Iran is expected to open up many sectors to investment and innovation, including agriculture and services; the government proposes to reduce its stake in commercial banks to 51 per cent and permit the establishment of private co-operative banks.

External trade

Shortages of foreign currency have produced a boom in counter trade, which obscure

©Copyright 2000, Iranian Trade Association