The war between the United States and the Islamic Republic has not only made life increasingly difficult for Iranians, but has also left the country’s future looking uncertain. An eventual end to the war will not necessarily bring an end to the economic sanctions against Iran, which have severely strained people’s livelihoods for decades, particularly since 2011. Nevertheless, Saeed Laylaz, a prominent economist based in Iran, believes that the United States will ultimately have no choice but to come to terms with the Islamic Republic. He argues that once American intervention and political influence over Iranian society come to an end, the country will achieve stability, since the other forces that have destabilised Iran over the past century have already lost their power.
Laylaz believes that once the war ends, the Islamic Republic will inevitably have to undertake economic reforms, followed by political reforms. Contrary to more pessimistic assessments, he expects Iran to enjoy prosperity and a degree of what he calls “relative democracy”. Laylaz does not consider any country fully democratic and regards even a limited form of democracy in Iran’s future as both desirable and worth pursuing. What follows is Radio Zamaneh’s interview with Saeed Laylaz.
Mr Laylaz, given that another war between the United States and Iran seems likely, what do you think the confrontation between the Islamic Republic and Washington will ultimately mean for Iran?
The Americans have realised that increasing pressure on Iran does not necessarily mean the collapse of the Islamic Republic. Instead, it intensifies conflict among the world’s major powers. Militarily, the Americans have already exhausted their options. They now have to come to terms with an Iran that is fundamentally determined to remain independent and never intended to become a nuclear power. In my view, it was US policy, not the Islamic Republic, that pushed Iran towards becoming a nuclear power. Throughout the past half-century, Iran has repeatedly extended a hand of friendship to the United States, and it has always been Washington that rejected it. Under the martyred Mr Khamenei, Iran became one of the world’s largest suppliers of crude oil to the United States in 1958–59 [sic] and 1995–96. And that level of oil exports was achieved despite the absence of diplomatic relations between the two countries. Executives at Conoco said they wanted to invest in Iran and modernise our oil infrastructure and wells. Who prevented that from happening? Alfonse D’Amato, who introduced legislation imposing oil sanctions on Iran. In 1996, the D’Amato sanctions law was passed by the US Congress.
But even before that law was passed, officials of the Islamic Republic had taken hostile positions towards the United States.
I believe political and geopolitical relations run far deeper than slogans. Mr Trump is currently governing the United States through slogans alone. We need to look beyond what happens within countries and examine their actual behaviour. And the reality was that the Islamic Republic repeatedly extended a hand of friendship to the United States, particularly during the negotiations leading to the nuclear agreement, only to have it rejected each time. After the Joint Comprehensive Plan of Action (JCPOA), the Americans disrupted the process. It is always the stronger side that breaks the rules of the game. The same applies within a country. The relationship between the political system and opposition parties is one between rulers and the ruled. If those being ruled become radicalised, it is because of the pressure imposed on them by those in power. After the JCPOA, we were moving towards normalising relations at lightning speed. The Americans did not even have to sell us strategic goods. Mr Rouhani believed that the Americans had economic interests in Iran and that those interests needed to be accommodated, otherwise Washington would turn against us. That is why he signed a contract with Boeing. Yet he received two aircraft from Airbus and none from Boeing. And all this happened under Mr Obama.
Some reformists argue that Mr Khamenei’s decision to prohibit American investment in Iran after the signing of the JCPOA helped pave the way for Washington’s withdrawal from the agreement.
If you remember, thousands of Chevrolet vehicles were imported into Iran in the early 1990s. But when the D’Amato sanctions came into force, all those cars were left in Iran without access to spare parts. From a technical standpoint, importing technology without any guarantee of continued access to it is neither feasible nor sensible. We should not overlook domestic considerations either. Abrupt policy reversals are not in anyone’s interest. We needed to give the JCPOA time.
Nuclear negotiations began in October 2003. Over the past 23 years, an entire generation’s time has effectively been wasted waiting for the Islamic Republic and the United States to reach an agreement so that Iranians could finally escape life under sanctions.
Yes, that criticism can be levelled at Iran’s decision-making system. I share it myself. It is a valid criticism, although one reason for the delays is the structural problems of Iran’s bureaucracy. Nevertheless, we did not necessarily have to work directly with American companies. After all, many Chinese companies today do not have a direct presence in Iran either. So ultimately, the issue comes down to the nature of the American decision. I worked in the automotive industry myself. From the very beginning of the JCPOA, Europeans told us that the agreement would not work and that they would not return to the Iranian market. They said, “We will sell you whatever you want to buy from us, but we will not invest in Iran.” Yes, Iran’s bureaucratic decision-making system is extraordinarily weak and outdated, but reforming that bureaucracy also takes time. After the United States withdrew from Vietnam, it took 40 years for Vietnam to become one of America’s ten largest trading partners. Vietnam ranks among America’s top ten trading partners because it exports extremely cheap goods to the United States, mainly textiles. If we want to import advanced technology from the United States, that is difficult. Transporting such goods over such long distances is logistically complicated and costly for the Americans. Even before the revolution, the United States was never Iran’s largest trading partner. In other words, even America’s closest ally in the Middle East did not become its largest trading partner in the region. The reason was transport and logistics. Even today, the United States is not Saudi Arabia’s largest trading partner. In 2000, China was the largest trading partner of 30 countries; today, that number has risen to 140. This transformation has profound significance: the world’s manufacturing centre has shifted from West to East. And Iran will not be an exception to this trend.
If Iran’s state broadcasting organisation were reformed, wouldn’t that indicate that the Islamic Republic genuinely intends to change the country’s present circumstances?
That matters to politicians, but not to ordinary people. Ordinary people do not watch much television, because reforming state broadcasting is not their concern. Among economists, Adam Smith and Karl Marx both attached great importance to technology. Today, technology and digital media have fundamentally changed our traditional ways of seeing the world. But Iranian politicians are still preoccupied with the Kayhan newspaper and state television, so they imagine that these two media outlets are the centre of the universe. For ordinary people, however, the positions taken by Kayhan and state television have lost virtually all significance. Symbolically, you are right, but only symbolically, nothing more. Today, through digital platforms, everyone has their own media channels and even their own audiences. In other words, we now have 90 million broadcasters in Iran!
What about the Guardian Council? Can we expect any reform in the way this institution operates?
No. The Guardian Council is an important political institution, and if we have a Bonaparte in Iran’s future, which I believe we will, he will impose even tighter political controls. So if we are looking for the reform of an institution that could symbolise genuine change in the Islamic Republic, that institution is the judiciary. More than 90 per cent of the restoration of the Islamic Republic’s legitimacy depends on improving people’s livelihoods, meaning reducing inflation, and reforming judicial procedures in Iran.
Monarchists offer many economic arguments in defence of the Shah’s regime. Supporters of Khatami also argue that his presidency was the most successful economic period in the Islamic Republic’s history. Yet both under the Shah and during Khatami’s presidency, Iranians experienced profound political dissatisfaction. It seems that Iranian society is, on the whole, deeply political and will not be satisfied with the status quo simply because economic conditions improve.
When economic conditions improve, people’s political demands naturally come to the fore. I agree that any economic improvement that does not lead to political improvement remains incomplete. Look at Saudi Arabia today, for example. In my view, the immediate priorities for reform under current conditions should be reducing inflation and improving judicial procedures for ordinary people. It is therefore quite possible that the government will make concessions to the private sector in the economic sphere without expanding political freedoms. That is entirely feasible: improving economic conditions and reforming judicial procedures.
Iran’s experience over the past century suggests that any ruler who fails to deliver the political freedoms people demand will ultimately lose legitimacy, regardless of the country’s economic performance under their rule.
That is precisely what demonstrates the necessity of perestroika and glasnost. No perestroika can succeed without eventually being followed by glasnost. The only question is when glasnost begins. Otherwise, perestroika without glasnost will ultimately bring everything back to where it started. In other words, the government’s economic reforms will have been wasted.
So, in your view, the Bonaparte who is going to emerge in Iran will move from perestroika to glasnost?
He will have no choice. He certainly will. I know Iran very well. Once this country achieves stability, it will never submit to a mass-based political structure. I was a member of the editorial board of the magazine Iran-e Farda from 1990 onwards. The magazine began with a circulation of 1,000 or 2,000 copies, but by 1996 it had reached 60,000. Why did that happen? Because alongside improving economic conditions under Mr Rafsanjani, demands for political, civic and social participation were growing rapidly. The Organisation of the Mojahedin of the Islamic Revolution was reconstituted, the Participation Front emerged, and so on. All this led to the landslide election of 23 May 1997. Sociology and history tell us that economic growth and development must lead to greater civic participation and political development.
After the election of 23 May 1997, efforts to secure political freedoms came to be known as “reforms”. But in the summer of 2000, Mr Khamenei described that project as “American reforms”. For him, democratic reform meant nothing other than “Westernisation”. That is why he opposed it. On what basis, then, do you believe that Mojtaba Khamenei, who shares much of his father’s thinking, will himself become the champion of glasnost?
Iranian society has undergone enormous transformations. Our circumstances today are very different from those of the second half of the 1990s. For example, the central forces within the ruling establishment and some of its opponents have now converged around nationalism. What would make the new leader behave differently from his predecessor? Circumstances. We should not confuse “inheritance” with “will”. We must examine social conditions rather than approach the issue mechanically.
But if these social conditions were capable of persuading Iran’s leader to accept democratic reforms, they already existed during Ali Khamenei’s leadership.
It is possible that, after economic reforms have been implemented, resistance to political reform will re-emerge in Iranian society. I do not rule that out. But consider what happened after 2015, for example, when we faced a new and increasingly intense wave of external pressure. It was Trump who brought Mr Rouhani down, not the Revolutionary Guards. In other words, the Trump administration intensified economic and social conflicts in Iran to such an extent that society and the government turned against one another, and Hassan Rouhani was pushed aside in the process. So the negative influence of foreign intervention may still persist. Over the past 120 years, four driving forces have repeatedly stirred Iranian society into upheaval. The first was oil, which has now lost its force. The second was population growth, which has also run out of steam. The third was migration, particularly migration from rural areas to cities, which was one of the forces that gave rise to the Islamic Revolution. That engine has also stopped. The fourth is international developments that place the Persian Gulf and the Middle East at the centre of global attention. This force, too, is gradually losing its power. What kept Iranian society in a constant state of turmoil was the heat generated by these four furnaces, or the activity of these four engines: population growth, migration, fluctuations in oil revenues and international interventions, particularly those of the United States. America is the only country in the world capable of influencing Iran’s internal affairs. But that influence is also declining and gradually fading away. Once that final engine stops, you will see peace and stability return to Iran.
Will this stability ultimately lead to democracy? Or will we continue to see a group of elites, as under the Pahlavi dynasty and after the revolution, gathering around a dictator, enjoying the privileges of power and offering various justifications for an undemocratic political system?
I believe we will gradually move towards a more tolerant society with a broader political sphere, and that the balance between social classes in Iran will produce a form of relative democracy. I believe Iran’s middle class will regain strength rapidly in the future, and this transformation will mean that the government can no longer disregard professionals, specialists and technocrats. I am absolutely convinced that if society moves towards stability, Iran will become a democratic country. Relatively democratic, of course, because nowhere in the world is democracy complete or perfect. If foreign powers had not interfered in our society, we would have achieved democracy much earlier.
But it seems that “compromise” is regarded as something shameful in our political culture, which is deeply shaped by the symbolism of Ashura and by oppositions between “good and evil” and “light and darkness”. Hasn’t this been a serious internal obstacle to democracy in Iran?
No, those are superficial matters. What matters is the balance between social classes and the prevailing social conditions and relations.
But since the 1979 Revolution, the forces that had all opposed the Shah’s dictatorship were eliminated one after another by the dominant faction. Then the individuals and groups within that victorious faction gradually began eliminating one another.
The same thing happened during the French Revolution. Its history is full of conflicts among revolutionaries and the elimination of one revolutionary faction by another.
And that is precisely why the French Revolution ended in the dictatorship of Napoleon Bonaparte.
Yes, but my point is that every great nation experiences such conflicts and gradually moves towards stability. What matters is whether the sources of unrest still exist. As I explained, of the four furnaces that kept the cauldron of Iranian society boiling over the past century, only one remains alight today. If that final furnace is extinguished as well, you will be astonished by how quickly Iran moves towards order and stability.
So, overall, are you optimistic about Iran’s future?
Very much so.