Former Iranian prime minister, Dr. Mohammad Mossadegh.
Former Iranian prime minister, Dr. Mohammad Mossadegh.

In 1951 Dr. Mohammed Mossadegh was elected prime minister. As prime minister, Mossadegh became enormously popular in Iran after he nationalized Iran's oil reserves. In response, Britain embargoed Iranian oil and, amidst Cold War fears, invited the United States to join in a plot to depose Mossadegh, and in 1953 President Dwight D. Eisenhower authorized Operation Ajax. The operation was successful, and Mossadegh was arrested on 19 August 1953. After Operation Ajax, Mohammad Reza Pahlavi's rule became increasingly autocratic. With American support, the Shah was able to rapidly modernize Iranian infrastructure, but he simultaneously crushed all forms of political opposition with his intelligence agency, SAVAK. Ayatollah Ruhollah Khomeini became an active critic of the Shah's White Revolution and publicly denounced the government. Khomeini was arrested and imprisoned for 18 months. After his release in 1964 Khomeini publicly criticized the United States government. The Shah was persuaded to send him into exile by General Hassan Pakravan. Khomeini was sent first to Turkey, then to Iraq and finally to France. While in exile, he continued to denounce the Shah.

The Iranian Revolution, also known as the Islamic Revolution,[57][58][59] began in January 1978 with the first major demonstrations against the Shah.[60] After strikes and demonstrations paralysed the country and its economy, the Shah fled the country in January 1979 and Ayatollah Khomeini returned from exile to Tehran. The Pahlavi Dynasty collapsed ten days later, on 11 February, when Iran's military declared itself "neutral" after guerrillas and rebel troops overwhelmed troops loyal to the Shah in armed street fighting. Iran officially became an Islamic Republic on 1 April 1979 when Iranians overwhelmingly approved a national referendum to make it so.[16][17] In December 1979 the country approved a theocratic constitution, whereby Khomeini became Supreme Leader of the country. The speed and success of the revolution surprised many throughout the world,[61] as it had not been precipitated by a military defeat, a financial crisis, or a peasant rebellion.[62] Although both nationalists and Marxists joined with Islamic traditionalists to overthrow the Shah, tens of thousands were killed and executed by the Islamic regime afterward, the revolution ultimately resulted in an Islamic Republic under Ayatollah Ruhollah Khomeini.[63]

Arrival of Ayatollah Khomeini on 1 February 1979 from France.
Arrival of Ayatollah Khomeini on 1 February 1979 from France.

Iran's relationship with the United States deteriorated rapidly during the revolution. On 4 November 1979, a group of Iranian students seized US embassy personnel, labelling the embassy a "den of spies".[64] They accused its personnel of being CIA agents plotting to overthrow the revolutionary government, as the CIA had done to Mohammad Mossadegh in 1953. While the student ringleaders had not asked for permission from Khomeini to seize the embassy, Khomeini nonetheless supported the embassy takeover after hearing of its success.[65] While most of the female and African American hostages were released within the first months,[65] the remaining fifty-two hostages were held for 444 days. Subsequently attempts by the Jimmy Carter administration to negotiate or rescue were unsuccessful. In January 1981 the hostages were set free according to the Algiers declaration.

Iraqi leader Saddam Hussein decided to take advantage of what he perceived to be disorder in the wake of the Iranian Revolution and its unpopularity with Western governments. The once-strong Iranian military had been disbanded during the revolution. Saddam sought to expand Iraq's access to the Persian Gulf by acquiring territories that Iraq had claimed earlier from Iran during the Shah's rule. Of chief importance to Iraq was Khuzestan which not only has a substantial Arab population, but boasted rich oil fields as well. On the unilateral behalf of the United Arab Emirates, the islands of Abu Musa and the Greater and Lesser Tunbs became objectives as well. On 22 September 1980 the Iraqi army invaded Iran at Khuzestan, precipitating the Iran–Iraq War.

Although Saddam Hussein's forces made several early advances, by 1982, Iranian forces managed to push the Iraqi army back into Iraq. Khomeini sought to export his Islamic revolution westward into Iraq, especially on the majority Shi'a Arabs living in the country. The war then continued for six more years until 1988, when Khomeini, in his words, "drank the cup of poison" and accepted a truce mediated by the United Nations. The total Iranian casualties of the war were estimated to be anywhere between 500,000 and 1,000,000; with more than 100,000 Iranian being victims of Iraq's chemical weapons.[66] Almost all relevant international agencies have confirmed that Saddam engaged in chemical warfare to blunt Iranian human wave attacks; these agencies unanimously confirmed that Iran never used chemical weapons during the war.[67][68][69]

Following the Iran–Iraq War President Akbar Hashemi Rafsanjani and his administration concentrated on a pragmatic pro-business policy of rebuilding and strengthening the economy without making any dramatic break with the ideology of the revolution. Rafsanjani served until 1997 when he was succeeded by the moderate reformist Mohammad Khatami. During his two terms as president, Khatami advocated freedom of expression, tolerance and civil society, constructive diplomatic relations with other states including EU and Asian governments, and an economic policy that supported free market and foreign investment. However, Khatami is widely regarded as having been unsuccessful in achieving his goal of making Iran more free and democratic.[70] In the 2005 presidential elections Iran made yet another change in political direction when conservative populist candidate Mahmoud Ahmadinejad, was elected over Akbar Hashemi Rafsanjani.[71]

Government and politics

Political institutions of Iran
Political institutions of Iran

The political system of the Islamic Republic is based on the 1979 Constitution. The system comprises several intricately connected governing bodies. The Supreme Leader of Iran is responsible for delineation and supervision of the general policies of the Islamic Republic of Iran.[72] The Supreme Leader is Commander-in-Chief of the armed forces, controls the military intelligence and security operations; and has sole power to declare war or peace.[72] The heads of the judiciary, state radio and television networks, the commanders of the police and military forces and six of the twelve members of the Council of Guardians are appointed by the Supreme Leader.[72] The Assembly of Experts elects and dismisses the Supreme Leader on the basis of qualifications and popular esteem.[73] The Assembly of Experts is responsible for supervising the Supreme Leader in the performance of legal duties.

After the Supreme Leader, the Constitution defines the President of Iran as the highest state authority.[72][74] The President is elected by universal suffrage for a term of four years and can only be re-elected for one term.[74] Presidential candidates must be approved by the Council of Guardians prior to running in order to ensure their allegiance to the ideals of the Islamic revolution.[75] The President is responsible for the implementation of the Constitution and for the exercise of executive powers, except for matters directly related to the Supreme Leader, who has the final say in all matters.[72] The President appoints and supervises the Council of Ministers, coordinates government decisions, and selects government policies to be placed before the legislature.[76] Eight Vice-Presidents serve under the President, as well as a cabinet of twenty two ministers, who must all be approved by the legislature.[77] Unlike many other states, the executive branch in Iran does not control the armed forces. Although the President appoints the Ministers of Intelligence and Defense, it is customary for the President to obtain explicit approval from the Supreme Leader for these two ministers before presenting them to the legislature for a vote of confidence. Iran's current president, Mahmoud Ahmadinejad, was elected in a run-off poll in the 2005 presidential elections. His term expires in 2009.[78]

As of 2008 the Legislature of Iran (also known as the Majlis of Iran) is a unicameral body.[79] Before the Iranian Revolution, the legislature was bicameral, but the upper house was removed under the new constitution. The Majlis of Iran comprises 290 members elected for four-year terms.[79] The Majlis drafts legislation, ratifies international treaties, and approves the national budget. All Majlis candidates and all legislation from the assembly must be approved by the Council of Guardians.[80] The Council of Guardians comprises twelve jurists including six appointed by the Supreme Leader. The others are elected by the Parliament from among the jurists nominated by the Head of the Judiciary.[81][74] The Council interprets the constitution and may veto Parliament. If a law is deemed incompatible with the constitution or Sharia (Islamic law), it is referred back to Parliament for revision.[74] In a controversial exercise of its authority, the Council has drawn upon a narrow interpretation of Iran's constitution to veto parliamentary candidates. The Expediency Council has the authority to mediate disputes between Parliament and the Council of Guardians, and serves as an advisory body to the Supreme Leader, making it one of the most powerful governing bodies in the country.[82]

The Supreme Leader appoints the head of Iran's Judiciary, who in turn appoints the head of the Supreme Court and the chief public prosecutor.[83] There are several types of courts including public courts that deal with civil and criminal cases, and "revolutionary courts" which deal with certain categories of offenses, including crimes against national security. The decisions of the revolutionary courts are final and cannot be appealed.[83] The Special Clerical Court handles crimes allegedly committed by clerics, although it has also taken on cases involving lay people. The Special Clerical Court functions independently of the regular judicial framework and is accountable only to the Supreme Leader. The Court's rulings are final and cannot be appealed.[83]

The Assembly of Experts, which meets for one week annually, comprises 86 "virtuous and learned" clerics elected by adult suffrage for eight-year terms. As with the presidential and parliamentary elections, the Council of Guardians determines candidates' eligibility.[83] The Assembly elects the Supreme Leader and has the constitutional authority to remove the Supreme Leader from power at any time.[83] As all of their meetings and notes are strictly confidential, the Assembly has never been publicly known to challenge any of the Supreme Leader's decisions.[83]

Local City Councils are elected by public vote to four-year terms in all cities and villages of Iran. According to article seven of Iran's Constitution, these local councils together with the Parliament are "decision-making and administrative organs of the State". This section of the constitution was not implemented until 1999 when the first local council elections were held across the country. Councils have many different responsibilities including electing mayors, supervising the activities of municipalities; studying the social, cultural, educational, health, economic, and welfare requirements of their constituencies; planning and co-ordinating national participation in the implementation of social, economic, constructive, cultural, educational and other welfare affairs.

Foreign relations and military

See also: Military history of Iran and List of military equipment manufactured in Iran
One of Iran's 6 SSK Kilo class submarines
One of Iran's 6 SSK Kilo class submarines

Iran's foreign relations are based on two strategic principles: eliminating outside influences in the region and pursuing extensive diplomatic contacts with developing and non-aligned countries. Iran maintains diplomatic relations with almost every member of the United Nations, except for Israel, which Iran does not recognize, and the United States since the Iranian Revolution.[84] Since 2005, Iran's Nuclear Program has become the subject of contention with the West because of suspicions regarding Iran's military intentions. This has led the UN Security Council to impose sanctions against Iran on select companies linked to this program, thus furthering its economic isolation on the international scene.

The Islamic Republic of Iran has two kinds of armed forces: the regular forces Islamic Republic of Iran Army, Islamic Republic of Iran Air Force, Islamic Republic of Iran Navy and the Islamic Revolutionary Guards Corps (IRGC), totalling about 545,000 active troops. Iran also has around 350,000 Reserve Force totaling around 900,000 trained troops.[85] Iran has not invaded any country over the past two centuries.[86] Iran has a paramilitary, volunteer militia force within the IRGC, called the Basij, which includes about 90,000 full-time, active-duty uniformed members. Up to 11 million men and women are members of the Basij who could potentially be called up for service; GlobalSecurity.org estimates Iran could mobilize "up to one million men". This would be among the largest troop mobilizations in the world.[87] In 2005, Iran's military spending represented 3.3% of the GDP or $91 per capita, the lowest figure of the Persian Gulf nations.[88] Iran's military doctrine is based on deterrence.[89]

Since the Iranian revolution, to overcome foreign embargo, Iran has developed its own military industry, produced its own tanks, armored personnel carriers, guided missiles, submarines, and fighter planes.[90] In recent years, official announcements have highlighted the development of weapons such as the Fajr-3 (MIRV), Hoot, Kowsar, Zelzal, Fateh-110, Shahab-3 missiles, and a variety of unmanned aerial vehicles (UAVs). The Fajr-3 (MIRV) is currently Iran's most advanced ballistic missile. It is a domestically-developed and produced liquid fuel missile with an unknown range. The IRIS solid-fuelled missile will be Iran's first missile to bring satellites into orbit.

Economy

Main article: Economy of Iran
See also: Next Eleven, Central Bank of Iran, Tehran Stock Exchange, Transport in Iran, Communications in Iran, Construction in Iran, Economic Cooperation Organization, Privatization in Iran, and Foreign Direct Investment in Iran

Iran's economy is a mixture of central planning, state ownership of oil and other large enterprises, village agriculture, and small-scale private trading and service ventures.[91] Its economic infrastructure has been improving steadily over the past two decades but continues to be affected by inflation and unemployment.[92] In the early 21st century the service sector contributed the largest percentage of the GDP, followed by industry (mining and manufacturing) and agriculture. In 2006, about 45% of the government's budget came from oil and natural gas revenues, and 31% came from taxes and fees. Government spending contributed to an average annual inflation rate of 14% in the period 2000–2004. Iran has earned $70 billion in foreign exchange reserves mostly (80%) from crude oil exports (2007).[93] In 2007, the GDP was estimated at $206 billion ($852 billion at PPP), or $3,160 per capita ($12,300 at PPP).[25] Iran's official annual growth rate is at 6%.[94] Because of these figures and the country’s diversified but small industrial base, the United Nations classifies Iran's economy as semi-developed.[95]

Tehran was one of the first cities in Iran which was modernized in the Pahlavi era.
Tehran was one of the first cities in Iran which was modernized in the Pahlavi era.

The services sector has seen the greatest long-term growth in terms of its share of GDP, but the sector remains volatile. State investment has boosted agriculture with the liberalization of production and the improvement of packaging and marketing helping to develop new export markets. Thanks to the construction of many dams throughout the country in recent years, large-scale irrigation schemes, and the wider production of export-based agricultural items like dates, flowers, and pistachios, produced the fastest economic growth of any sector in Iran over much of the 1990s.

Close to 1.8% of national employment is generated in the tourism sector which is slated to increase to 10% in the next five years.[96] About 1,659,000 foreign tourists visited Iran in 2004; most came from Asian countries, including the republics of Central Asia, while a small share came from the countries of the European Union and North America. Iran currently ranks 89th in tourist income, but is rated among the 10 most touristic countries in the world.[97] Weak advertising, unstable regional conditions, a poor public image in some parts of the world, and absence of efficient planning schemes in the tourism sector have all hindered the growth of tourism.

The administration continues to follow the market reform plans of the previous one and indicated that it will diversify Iran's oil-reliant economy. Iran has also developed a biotechnology, nanotechnology, and pharmaceuticals industry.[98] The strong oil market since 1996 helped ease financial pressures on Iran and allowed for Tehran's timely debt service payments. Iranian budget deficits have been a chronic problem, mostly due to large-scale state subsidies, that include foodstuffs and especially gasoline, totaling more than $84 billion in 2008 for the energy sector alone.[99][100]

The authorities so as the private sector have put in the past 15 years an emphasis on the local production of domestic-consumption oriented goods such as home appliances, cars, agricultural products, pharmaceutical, etc. Today, Iran possesses a good manufacturing industry, despite restrictions imposed by foreign countries. However, nationalized industries such as the bonyads have often been managed badly, making them ineffective and uncompetitive with years. Today, the government is trying to privatize these industries, such as Damavand mineral water company, and despite some successes, there are still several problems to be overcome such as the lagging corruption in the public sector (and therefore, nationalized industries) and lack of competitiveness.

Globally, Iran has leading manufacture industry in the fields of car-manufacture and transportations, construction materials, home appliances, food and agricultural goods, armaments, pharmaceuticals, information technology, power and petrochemicals.[101]