How Intertwined Are the Revolutionary Guards in Iran's Economy?
Tuesday, October 23, 2007 at 18:54 From: American Enterprise Institute for Public Policy Research
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| By Ali Alfoneh | |||||||||
| Posted: Monday, October 22, 2007 | |||||||||
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| MIDDLE EASTERN OUTLOOK | |||||||||
| AEI Online | |||||||||
| Publication Date: October 22, 2007 | |||||||||
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No. 3, October 2007 As the Islamic Republic of Iran nears its thirtieth anniversary, the political elites in Tehran are working hard to maintain an appearance of continuity rather than change. But as the political elites of Iran change, the Islamic Republic is also experiencing a metamorphosis of its own. One indication of this change is the transformation of the Islamic Revolutionary Guards Corps (IRGC) into a business conglomerate independent of state regulation. The Islamic Republic, once governed by the Shiite clergy and guarded by the IRGC, is developing into an economy dominated by the military. Moreover, the IRGC's close involvement in the Iranian economy makes sanctions against Tehran tricky for the United States and European Union (EU) to implement in their quest to stop Iran's nuclear weapons program. On August 15, 2007, the Washington Post reported that U.S. officials would soon label the IRGC a terrorist organization.[1] While the designation has not yet happened, the subsequent discussion focused U.S., European, and Iranian attention on the confluence of the IRGC's political and business interests inside Iran. Far from being a rogue element within the Islamic Republic's governing structure--as aca-demics have suggested[2]--the Revolutionary Guards exert great influence and reflect the Islamic Republic's leadership. After leading the Islamic Revolution in 1979, Grand Ayatollah Ruhollah Khomeini founded the IRGC[3] to balance the remnants of the armed forces of the Imperial Army and to disarm non-Islamist members of the broad revolutionary coalition.[4] Its sacrifices and gradual adoption of classical warfare doctrines during the Iran-Iraq War (1980-88) established its reputation as an efficient military force,[5] and political influence soon followed.[6] And while discussion of the IRGC's cultural and religious activities remains muted outside narrow academic circles,[7] these are as real as the IRGC's political activities. Iranian reaction to the Washington Post leak was swift. "The Guard is greater than the U.S. imagines," read a headline in the Sobh-e Sadeq,[8] a weekly published by the political office of the representative of the supreme leader in the IRGC.[9] After the U.S. Senate passed a nonbinding resolution condemning IRGC terror activities on September 26, 2007,[10] former president Mohammad Khatami, considered by Western journalists and many diplomats to be a reformer, condemned the Senate's action and came to the IRGC's defense.[11] The IRGC's influence is intertwined with and perhaps inseparable from the Islamic Republic today. As important as its political influence may be, however, the IRGC also has economic influence. Within the Islamic Republic, and increasingly in Iran's external trade, the IRGC is an economic powerhouse. From its modest postwar reconstruction activities, it has reconfigured itself as the dominant player in large infrastructure projects. It has sought to leverage its experience in defense industries to enter the lucrative consumer goods sector, even at the expense of private enterprises. Its involvement in the black market frustrates Iranian businessmen. Throughout the 1990s, the IRGC also extended its influence into the lucrative oil and gas sectors. While mapping such enterprises is difficult, given the opacity of the Iranian economy in general and the IRGC in particular, official and commercial Iranian reporting provide enough data to show just how intertwined the IRGC has become with the economy of the Islamic Republic. An Amorphous Legal Framework
The IRGC's role in the Iranian economy is constitutionally mandated. In an interview with Shargh[12] (an Iranian daily banned on the fifth anniversary of the September 11 attacks for a political cartoon likening President Mahmoud Ahmadinejad to a donkey), IRGC functionary Abdul-Reza Abed justified IRGC involvement in Article 147 of the Iranian constitution, which states that | |||||||||
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