Teaching Comparative Government and Politics

Monday, February 22, 2010

The new elephant in Iran

Earlier in the revolution, the bonyads, religious foundations, were the hugely-important but nearly invisible players in the Iranian economy. In recent years, that role has been assumed by the Islamic Revolutionary Guard Corps (IRGC) or Pasdaran.

Here's what Julian Borger and Robert Tait wrote about the IRGC in The Guardian (UK). You should point out how the Pasdaran resembles the Cultural Revolution-era PLA in China and the Soviet-era KGB.

The financial power of the Revolutionary Guards

The [IRGC], which was born as a volunteer militia in the heat of the 1979 revolution, is now unrecognisable from those early beginnings. It has grown into a behemoth which dominates both Iran's official and black economies. It is impossible to gauge its market share, but western estimates range from a third to nearly two-thirds of Iran's GDP – amounting to tens of billions of dollars…

Mohsen Sazegara, an exiled Iranian dissident who helped found the IRGC, calls it now "a very strange and unique organisation", comparing it to the Soviet-era KGB for its extensive intelligence wing. "It's also like a huge investment company with a complex of business empires and trading companies, while also being a de facto foreign ministry through the Qods force, which controls relations with countries in the region. They are involved in smuggling drugs and alcohol. I know of no other institution like the Revolutionary Guards."…

The IRGC operate in part through Iran's bonyads, ostensibly charitable foundations that operate as huge holding companies… After the revolution they were vehicles for self-enrichment by the ayatollahs. Now, in a reflection of the regime's continuing evolution, the IGRC is the dominant force, particularly through Bonyad e-Mostazafan, the Foundation of the Oppressed.

However, arguably the most powerful IRGC body today is Khatam al-Anbiya, which started life as the HQ of the corps' construction arm but is now a giant holding firm with control of more than 812 registered companies inside or outside Iran, and the recipient of 1,700 government contracts...

With the active support of Mahmoud Ahmadinejad, the country's president, who has handed Khatam al-Anbiya a succession of huge no-bid contracts, its economic influence has ballooned exponentially over the past few years into just about every aspect of economic life…

"Using their whole economic base, they are expanding control over areas of what they see as the 'soft war', like the telecommunications field, to confront the threat they see," said Mark Fowler, a former CIA Iran specialist now working for the US consultancy Booz Allen Hamilton...

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Labels: economics, Iran, military, political culture, politics