The present political situation in Iran is explosive. The "rulers" are not able to rule and the "ruled" are revolting against them. Only several months ago more than 7000 students in Tehran University staged a sit -in against the anti- democratic approach of the government against one of their professors, Mr. Sooroosh, who has been advocating the separation of religion from the state. The central slogan of the students was "Down With Fascism". Also less than a year ago, 4th April 1995, the occupants of Islam Shah, south of Tehran, who are mainly young workers, revolted against the regime and took control of their town of 500,000 occupants. Although more than 50 people were killed and several hundred arrested, but the regime eventually was forced to meet their demands, which was the provision of drinking water. Again, towards the end of July 1995, four thousand of Benz Khavar workers, a German related assembly lorry plant, went on strike for higher wages and 15 days a year paid holidays. This strike has temporarily ended pending re negotiation in September. Also the workers of textile industries in Gaem Shar have recently, 12 September 1995, went on strike for higher wages. These have followed previous demonstrations of Iranian oil workers and mass upsurges in several towns during the last two years.

In recent weeks the election of the Majlis (the parliament) has brought up added problems to the ruling clique (see article on the election).

In this article we shall highlight the general characterisation of the regime, the political and economic situation and the position of the working class.

The Islamic Republic is a capitalist state of a specific type. It is a clerical-capitalist state. To understand the class nature of this regime one has to examine the role of the clergy in the capitalist development of the last century in Iran. The clergy has always played a central and prominent intermediary role between the monarchy, the landlords and the poor mass of people in society. At each revolutionary period in Iran they took the side of the bourgeoisie and used the trust they had gained within the masses, to suppress them. In 1906-8 during the Constitutional Revolution in Iran, a section of them played a counter revolutionary role. The clergy have in one way or the other been part and parcel of the bourgeois state.

However the development of "modern" capitalism in Iran in the 1960s implemented by the Shah, who pursued a Westernising policy, pushed the clergy aside from the centre of power. From then on the clergy became an opposition force to the Shah’s regime. Khomeini’s fight against the Shah was never an anti-capitalist struggle, but a fight to achieve the lost power and involvement within the bourgeois state.

In 1979, the clergy by using the anti-despotic mass upsurge of the Iranian people, succeeded to mobilise an insurrection against the Shah and ride to power on the back of the masses. This was done smoothly because of the absence of any working class leadership. The pro-Moscow Tudeh Party did mobilise the masses against the Shah, but it also compromised with a section of the bourgeoisie. At the same time. the Fedaii’s "guerrilla" activities were running out of steam.

From the start of the new regime , two opposing tendencies emerged in the clergy, One was for holding power in a clerical sense-through a "semi-feudal" capitalist state with numerous centres of power. It favoured the strict implementation of Islamic law whilst putting forward anti-Western slogans and sentiments. The second tendency wanted to establish a modern, centralised capitalist state, similar to the Shah’s, which would be pro-Western and in which the bourgeoisie would run affairs. So from the outset the conflicts and contradictions were to resolve this issue: what form of bourgeois state should be re-established? And after sixteen years, the conflict between the tendencies remains and the political crisis has not been resolved.

In the West, the pro-Western tendency of the Iranian regime is usually referred to as ‘moderate’ or ‘pragmatist’, and the clerical tendency as ‘radical’ or ‘hard-line’. Of course

the leaderships of both tendencies have changed over the last sixteen years, with some leaders shifting from one tendency to the other. However at present, the ‘moderate’ tendency is led by Rafsanjani, the president, and the ‘radical’ tendency by Khamenei , who succeeded Khomeini as the spiritual leader of the Islamic Republic. Generally speaking the "moderate" tendency has been gaining ground by building links with the West, encouraging foreign investors and establishing a more centralised state. But this shift is a slow and painful process, as the political conflicts in the ruling clique is persisting and the political crisis has not been resolved. Next year the crisis will come to a head, at the presidential election -Rafsanjani himself is unable to run again and it will be difficult to find a replacement without major political upsets.

The relationship between the Iranian regime and the West also has to be seen in the light of the faction fights within the regime. The Rafsanjani tendency has done its utmost to establish a normal relationship with the West, but progress has been slow and there has been many setbacks because of repeated interventions by ‘radicals’. One of the major issues blocking better relations is the Salman Rushdie affair. The ‘radicals’ have consistently stressed that Khomeini’s fatwa calling for Rushdie to be killed should be implemented. But Rafsanjani has been trying to find ways out of this impasse. However during last year some predominant figures within the regime have called for a reversal of the fatwa or separation of religious issues from politics. But all these have been severely attacked by ‘radicals’ and even one of them has been threatened to death.

Economically, the situation is even worst. The country’s banking system has been hit by a long list of embezzlements. The total sum embezzled in four cases made public up to the present time, ranges from $33 million to more than $400 million. For example the manager of the Bank Melli Iran (National Iranian Bank) in Khuzestan (south Iran) has been charged with embezzling $1.7 million and several employers of other branches face charges of misappropriating $7.5 million. The authorities tried to cover up the frauds as some of those involved were influential people, like the brother of Rafiqdoust, head of "foundation for the deprived and war disabled".

Also, the Rafsanjani Regime has received more than $30 billion loan from IMF, Germany, Japan, Italy and other Western banks. The arrears of these payments by 1993 were in the region of $8 billion. According to the governor of the central bank, these arrears will reach $18 billion by the year 2006, with an annual interest of $700 million.

Unemployment is more than half of the working population. Inflation is more than 60 per cent, and the prices of basic foodstuffs like rice, meat, eggs is going up daily: meat is 10,000 rials a Kilo, a chicken is 5,000 rials, while the average wage of an Iranian worker is 10,000 rials=$2(open market rate) per day. As a result, workers and even the middle class are forced to get several jobs to survive. In the last three years, Islamic rules and regulations relating to the economy have been replaced by a ‘readjustment’ policy of Rafsanjani-basically a pro-Western economic policy in line with satisfying the terms of IMF loans. But none of these policies have been successful, and only a few months ago the exchange free market rate of Rial (Iranian currency-IR) reached the record high, $1=IR 7,000 (in 1979 it was $1=IR 100). But by government intervention this figure has recently been kept at $1=IR 4,000. With such a high exchange rate it is difficult for factory owners to meet their imported raw materials and spare needs. This year the industrial output will drop to below one-half of capacity. This will yet worsen the economic stagnation in Iran.

Since the end of the eight year war with Iraq, 1988, there has been over 400 large and small strikes. These strikes have been organised by clandestine strike committees. These action committees, unlike the claims of the Iranian left opposition and centrist organisations, have been formed and struggled completely independent of them. These are mainly the youth who returned from the war or students or young workers. We call this layer which has been involved in organising these committees and strikes, the new vanguard of the working class. However, these activities have been mainly spontaneous, and the workers have not been able to form a centralised organisation or develop a revolutionary political programme. For example, the most recent upsurge of young workers, in south Teheran, has been staged in this way.