IRAN'S TURN TOWARD PRAGMATISM

Timing is crucial to Iran's effort to rejoin the world. And success of the effort is crucial to oil companies interested in business ventures in the reconstructing Islamic country.

Dec. 16, 1991

3 min read

Timing is crucial to Iran's effort to rejoin the world. And success of the effort is crucial to oil companies interested in business ventures in the reconstructing Islamic country.

Under President Hashemi Rafsanjani, Iran this year has taken a remarkable turn toward pragmatism. Latest demonstration of that turn is release of most western hostages held by Lebanese terrorists in Beirut, although extent of Iranian control over the terrorists has never been clear. Groups holding the hostages have proclaimed sympathy for the Shiite fundamentalism that energized Iran's 1979 revolution and fiery isolationism of the 1980s. Iran certainly has influenced, if not controlled, the terrorists.

MORE CHANGES NEEDED

In any event, without changes in Tehran the recent hostage releases probably would not have occurred. But before companies and governments move toward the new relationships Rafsanjani's government seeks, Iran will have to change even more.

Newly pragmatic Iranian officials must understand, for example, why the U.S. wouldn't consider renewing diplomatic relations with Iran soon after the last American captive was freed. There are questions to be answered about promises made to secure release of the hostages. There are prerevolution debts and other commercial matters to settle. There's the partial U.S. trade embargo. And, yes, there are lingering American suspicions. Iranians did hold Americans hostage in the U.S. embassy in Tehran. For years, Iranian leaders did preach hatred of America and of Americans. And Iran did play some role, however indirect it may have been, in thefts from western hostages in Lebanon of several years of free and dignified human existence.

Iranian officials can't and probably don't expect international diplomacy and commerce to respond to their initiatives overnight. What they can do is continue to change, to keep moving away from the extremism that characterized their country in the 1980s. Indeed they must if Iran is to provide for a rapidly growing population at the same time it rebuilds from its long war with Iraq. The country needs export earnings, especially from oil and gas. And it needs foreign capital, especially for oil and gas projects.

Hence the pragmatic turn under Rafsanjani and the crucial question of timing: Can economic pragmatism-the internationalist aspects of which remain anathema to fundamentalists-generate prosperity quickly enough to prevent an extremist backlash?

In part, the answer depends on how rapidly non-Iranian companies and governments change their views of Iran. Oil company interest in Iranian hydrocarbon reserves and projects is beyond doubt. But so is oil company concern about Iranian political risks. Governments share the worry.

CHANGES MUST LAST

Iran must convince the world that this year's changes will last. The best chance to do so will come in the Iranian spring, when the country holds its first parliamentary elections since the height of radicalism in 1988. At present, most opposition to Rafsanjani's reformist agenda comes from a parliament still controlled by extremists. What the outside world can't tell is whether parliamentary radicalism represents a relic minority or constrained majority.

Until they know which is the case, non-Iranian governments and companies will treat Iran with caution. Rejection of radicalism at the polls next spring would be the most important demonstration yet of Iranian change. When and if Iranians do make that crowning declaration of intent to rejoin the world, their leaders will have every reason to expect foreign governments and companies to change as well.