Rafsanjani's Determined Pragmatism

DURING a visit to Iran last November, I found that many Iranians agreed that President Hashemi Rafsanjani had a practical approach to their country's problems - even as they protested that ``pragmatism'' was a term invented in the West. They went on to suggest that Mr. Rafsanjani had the capacity to keep his eyes open to reality and had often displayed a rare ability (in Iran) to give particular directions in response to particular problems.

What is the reality of Iran that stares Rafsanjani and others in the face? First of all, Iran bears the monumental cost of the Gulf War, estimated at $542 billion. How does one embark on a program of reconstruction in an economy plagued by mounting inflation and a production system, in both industry and agriculture, operating at a fraction of capacity?

The country also faces 20 percent unemployment, according to government figures. More realistic estimates put the rate more than twice that.

What is Rafsanjani's remedy for these problems? Significantly, his Friday sermons dwell on his analysis of the Iranian economy. He emphasizes again and again that the only way for Iran to crawl out of economic backwardness is hard work. He sums up the Islamic work ethic: ``When one puts on one's work overalls and enters the factory, one should feel that one is engaged in the act of worship, as in the mosque.''

This indicates his skill at fusing ideology with pragmatism. He asks his Friday audiences why Muslims all over the world lag behind in economic productivity. It is through the development of the work ethic, he tells them, that Iran can export its revolution. ``If we imagine that with the existing level of production and with the existing economic dependence and with the multitude of problems afflicting our society we can be a model for other societies, then we are wrong.''

As a pragmatist, Rafsanjani has to move away from excessive state controls and a bloated public sector. Because of the ravages of war, the economy requires a massive reconstruction program, with an infusion of investment between $300 and $400 billion. Common sense demands, therefore, that Rafsanjani should welcome all the European or Japanese firms who would like to invest in Iran. It noteworthy that during the last few weeks Rafsanjani has already taken steps to relax import controls, foreign exchange rules, and travel restrictions.

But he cannot overnight convert an economy dominated by the public sector into one where major industries and projects are privately controlled. Radicals control the Iranian Assembly and they're leery of the reputed shady practices of contractors, importers, speculators, and black marketeers. The government will not dismantle all public controls.

Also, national income in Iran is unevenly distributed. Government figures released last July indicated that 40 percent of Iranians receive an aggregate of about 3 percent of the income; another 40 percent slightly over 22 percent. The remaining 20 percent earn about 75 percent of the national income.

The most encouraging sign I saw was the revolutionary regime's considerable investment in human capital. In the Medical College in Tehran, 30 percent of the students are female, with 20 percent of the faculty also female. A professor of electrical engineering on his way to a conference in the US said that 10 percent of the students in electrical engineering were female. These figures compare favorably with many universities in the West and cast doubt on reports about the terrible treatment women are subjected to in Iran.

A favorite slogan of the Islamic revolution, with regards to foreign policy, was ``neither East nor West.'' Rafsanjani's pragmatism, grounded in Iran's geopolitical realities, is moving the country toward workable relations, on a selective basis, with both East and West. His visit to the Soviet Union last June produced economic and technical cooperation agreements worth about $6 billion. It also seems to have cemented certain military ties with the Soviets.

Rafsanjani has pointed out that Iran's growing relations with the Soviet Union guarantee the safety of its northern borders and thus eliminate the need for other Gulf states to depend on outside powers, like the US, to prevent Soviet incursion into the region.

To comprehend the geopolitical context of a new Iran-Soviet relationship, one has to realize that the USSR physically and culturally is more of a Middle Eastern power than the US. Second, Iran may very well emerge as a power with considerable influence over the 40 million Muslims living in the USSR.

Recent border turmoil among Soviet Azerbaijanis wanting freer access to their Muslim brethren in Iran hint, however, at the political dangers in such influence.