U.S. Policy Should Utilize Vulnerabilities in Iran's Political, Economic Conditions

For Release

July 10, 2008

The United States should pursue a mixed strategy toward Iran, using a variety of means to promote favorable social developments within the country and at the same time exploiting vulnerabilities in the nation's political, economic and demographic conditions, according to a study issued today by the RAND Corporation.

However, Iran's vulnerabilities are "not extraordinary" and have become less severe over the last decade as Iranian President Mahmoud Ahmadinejad and other Iranian leaders have consolidated their power.

"The United States can use Iran's vulnerabilities to advance U.S. goals, but expectations should be kept low," said Keith Crane, the study's lead author and a senior economist at RAND, a nonprofit research organization. "This is going to be a long-term proposition. Although economic and social forces within Iran are pushing for liberalization, the current regime has been able to maintain its hold on power."

Despite hostile rhetoric expressed by Iranian leaders toward the United States, Iranian society has a generally favorable view of the United States, partly because there is a large population of Iranians living in America, Crane said. Although it faces many problems, the current Iranian regime is likely to resist external pressure for change. It may, however, become more democratic over time, as economic, political and demographic pressures from within force the government to respond to popular desires for a more democratic state.

The RAND report is based upon an assessment of the ethnographic, political and economic literature about Iran, in addition to official Iranian government statements and monitored blogs maintained by Iranians. Economic assessments from the Central Bank of Iran and the International Monetary Fund also were a part of the material assessed.

The study recommends that U.S. policy should be crafted with the goals of fostering conditions for a more democratic Iranian society, weakening the ability of the Iranian government to crack down on dissenters, and penalizing the Iranian government for policies that harm the United States.

Other actions the U.S. could take include a mixture of policy options, including:

  • Fund more educational and other exchanges between Iranians and Americans.
  • Pursue a more aggressive policy of public diplomacy by encouraging U.S. officials to provide interviews and commentary for Iranian media.
  • Tone down U.S. policy statements advocating regime change in Iran.
  • Discourage Iranian ethnic groups from revolting against the current regime.
  • Support International Monetary Fund and World Bank efforts to encourage better economic management in Iran to open up more opportunities for private businesses.
  • Maintain the embargo on gas liquefaction and gas-to-liquids technologies as a bargaining chip to nudge Iranian policies more in line with U.S. interests.
  • Expand contingency plans to seize Iranian foreign accounts.
  • Encourage U.S. allies to bar selected Iranian officials—those connected with pursuing nuclear fuel enrichment or funding terrorist groups—from traveling to those nations.

Iran has a complex political system in which religious authorities and democratically elected leaders share power, making Iran one of the more democratic countries in the Middle East, according to RAND researchers. Although political candidates are thoroughly vetted by clerical leaders before they are allowed to run, both men and women are allowed to vote, and Iranians directly elect both the president and the parliament.

Crane and his colleagues concluded that military action against Iran is likely to have negative effects for the United States. Unlike pre-war Iraq, the United States cannot count on support from Iran's ethnic minorities, even though many Iranians are unhappy with clerical rule and several minority groups have faced decades of oppression.

While Iran's population is comprised of many ethnicities, Iranians have a strong national identity and not likely to support any regime change imposed by outside forces, according to researchers.

However, Iran does face a number of internal challenges that could push the state along a more-democratic path, according to researchers. The number of young people in the labor market has risen by 80 percent over the last 10 years, the result of a population explosion during the 1980s. Iranians also face some of the highest urban housing costs relative to income in the world and inflation runs in the double-digits.

In addition, Iranians are disgusted with high levels of corruption, which have contributed to a skewed distribution of wealth. The Iranian economy is inflexible, due to a highly inefficient system of price supports and subsidies. Despite being rich in oil, the nation's economic policies have kept many Iranians poor.

The study, "Iran's Political, Demographic and Economic Vulnerabilities," is available at www.rand.org. In addition to Crane, the other authors of the study are Rollie Lal and Jeffrey Martini.

The study was prepared for RAND Project AIR FORCE, a division of RAND and a federally funded research and development center for studies and analysis aimed at providing independent policy alternatives for the U.S. Air Force.

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