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BACKGROUND NOTES:  IRAN PUBLISHED BY THE BUREAU OF PUBLIC AFFAIRS U.S.
DEPARTMENT OF STATE

JULY 1994 Official Name:  Islamic Republic of Iran

PROFILE

Geography Area:  1.6 million sq. km. (636, 294 sq. mi.); slightly
larger than Alaska.

Cities:  Capital--Tehran. Other cities--Isfahan, Tabriz, Mashhad,
Shiraz.

Terrain:  Desert and mountains.

Climate:  Semiarid; subtropical along the Caspian coast.

People Nationality:  Noun and adjective--Iranian(s).

Population (1992):  61 million.

Annual growth rate (1992):  3.5%.

Ethnic groups (1992):  Persian; Azeri Turks; Kurds; Arabs; Turkomans
and Baluchis; and Lur, Bakhtiari, and Qashqai tribes.

Religions:  Shi'a Muslim 95%; Sunni Muslim 4%; Zoroastrian, Jewish,
Christian, and Baha'i 1%.

Languages:  Persian, Turkish dialects, Kurdish, Luri, Gilaki, Arabic.

Education (1992):  Literacy--50%.

Health (1992):  Infant mortality rate--64/1,000.  Life expectancy--65
years.

Work force:  Agriculture--33%.  Manufacturing--21%.  There is a
shortage of skilled labor.


Government

Type:  Islamic republic.

Constitution:  Ratified December 1979, revised 1989.

Branches:  Executive--"Leader of the Islamic Revolution" (head of
state); president and Council of Ministers. Legislative--270-member
National Consultative Assembly (Majles).  Judicial--Supreme Court.

Political parties:  None.

Suffrage:  Universal at 15.

Administrative subdivisions:  25 provinces.

Flag:  Three horizontal bands of green, white, and red, with the
national emblem, a stylized representation of the word Allah, in the
center.


Economy

GDP (est.):  $90 billion.

Annual growth rate (est.):  5%.

Per capita income (est.):  $1,500.

Natural resources:  Petroleum, natural gas, and some mineral deposits.

Agriculture:  Principal products--wheat, rice, other grains, sugar
beets, fruits, nuts, cotton, dairy products, wool, caviar; not
self-sufficient in food.

Industry:  Types--petroleum, petrochemicals, textiles, cement and
building materials, food processing (particularly sugar refining and
vegetable oil production), metal fabricating (steel and copper).

Trade:  Exports--$18 billion:  petroleum 90%, carpets, fruits, nuts,
hides.  Imports--$28 billion:  food, machinery, and medical products. 
Major markets/suppliers:  Germany, Japan, Italy, U.K., France.

Exchange rate (1994, unofficial):  2,600 rials=U.S. $1.

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PEOPLE Almost two-thirds of Iran's people are of Aryan origin--their
ancestors migrated from Central Asia.  The major groups in this
category include Persians, Kurds, Lurs, and Baluchi.  The remainder are
primarily Turkic but also include Arabs, Armenians, Jews, and
Assyrians.

The 1979 Islamic revolution and the war with Iraq transformed Iran's
class structure politically, socially, and economically.  In general,
however, Iranian society remains divided into urban, market-town,
village, and tribal groups.  Clerics, called mullahs,  dominate
politics and nearly all aspects of Iranian life, both urban and rural. 
After the fall of the Pahlavi regime in 1979, much of the urban upper
class of prominent merchants, industrialists, and professionals,
favored by the former Shah, lost standing and influence to the senior
clergy and their supporters.  Bazaar merchants, who were allied with
the clergy against the Pahlavi shahs, have also gained political and
economic power since the revolution.  The urban working class has
enjoyed somewhat enhanced status and economic mobility, spurred in part
by opportunities provided by revolutionary organizations and the
government bureaucracy.

Unemployment, a major problem even before the revolution, has many
causes, including population growth, the war with Iraq, and shortages
of raw materials and trained managers.  Farmers and peasants received a
psychological boost from the attention given them by the Islamic regime
but appear to be hardly better off in economic terms.   The government
has made progress on rural development, including electrification and
road building but has not yet made a commitment to land redistribution.

Most Iranians are Muslims; 95% belong to the Shi'a branch of Islam, the
official state religion, and about 4% belong to the Sunni branch, which
predominates in neighboring Muslim countries.  Non-Muslim minorities
include Zoroastrians, Jews, Baha'is, and Christians.


HISTORY The ancient nation of Iran, historically known to the West as
Persia and once a major empire in its own right, has been overrun
frequently and has had its territory altered throughout the centuries. 
Invaded by Arabs, Seljuk Turks, Mongols, and others--and often caught
up in the affairs of larger powers--Iran has always reasserted its
national identity and has developed as a distinct political and
cultural entity.

Archeological findings have placed knowledge of Iranian prehistory at
middle paleolithic times (100,000 years ago).  The earliest sedentary
cultures date from 18,000-14,000 years ago.  The sixth millennium B.C.
saw a fairly sophisticated agricultural society and proto-urban
population centers.  Many dynasties have ruled Iran, the first of which
was under the Achaemenians (559-330 B.C.), a dynasty founded by Cyrus
the Great.  After the Hellenistic period (300-250 B.C.) came the
Parthian (250 B.C.-226 A.D.) and the Sassanian (226-651) dynasties.

The seventh-century Arab-Muslim conquest of Iran was followed by
conquests by the Seljuk Turks, the Mongols, and Tamerlane.  Iran
underwent a revival under the Safavid dynasty (1502-1736), the most
prominent figure of which was Shah Abbas.  The conqueror Nadir Shah and
his successors were followed by the Zand dynasty, founded by Karim
Kahn, and later the Qajar (1795-1925) and the Pahlavi dynasties
(1925-1979).

Modern Iranian history began with a nationalist uprising against the
Shah (who remained in power) in 1905, the granting of a limited
constitution in 1906, and the discovery of oil in 1908.  In 1921, Reza
Khan, an Iranian officer of the Persian Cossack Brigade, seized control
of the government.  In 1925, he made himself Shah, ruling as Reza Shah
Pahlavi for almost 16 years and installing the new Pahlavi dynasty.

Under his reign, Iran began to modernize and to secularize politics,
and the central government reasserted its authority over the tribes and
provinces.  In September 1941, following the Allies' (U.K.-Soviet
Union) occupation of western Iran, Reza Shah was forced to abdicate. 
His son, Mohammad Reza Pahlavi, became Shah and ruled until 1979.

During World War II, Iran was a vital link in the Allied supply line
for lend-lease supplies to the Soviet Union.  After the war, Soviet
troops stationed in northwestern Iran not only refused to withdraw but
backed revolts that established short-lived, pro-Soviet separatist
regimes in the northern regions of Azerbaijan and Kurdistan.  These
were ended in 1946.  The Azerbaijan revolt crumbled after U.S. and UN
pressure forced a Soviet withdrawal and Iranian forces suppressed the
Kurdish revolt.

In 1951, Premier Mohammed Mossadeq, a militant nationalist, forced the
parliament to nationalize the British-owned oil industry.  Mossadeq was
opposed by the Shah and was removed, but he quickly returned to power. 
The Shah fled Iran but returned when supporters staged a coup against
Mossadeq in August 1953.  Mossadeq was then arrested by pro-Shah army
forces.

In 1961, Iran initiated a series of economic, social, and
administrative reforms that became known as the Shah's White
Revolution.  The core of this program was land reform.  Modernization
and economic growth proceeded at an unprecedented rate, fueled by
Iran's vast petroleum reserves, the third-largest in the world.

In 1978, domestic turmoil swept the country as a result of religious
and political opposition to the Shah's rule and programs--especially
SAVAK, the hated internal security and intelligence service.  In
January 1979, the Shah left Iran; he died abroad several years after.

On February 1, 1979, exiled religious leader Ayatollah Ruhollah
Khomeini returned from France to direct a revolution resulting in a
new, theocratic republic guided by Islamic principles.  Back in Iran
after 15 years in exile in Turkey, Iraq, and France, he became Iran's
national religious leader.  Following Khomeini's death on June 3, 1989,
the Assembly of Experts--an elected body of senior clerics--chose the
outgoing president of the republic, Ali Khamenei, to be his successor
as national religious leader in what proved to be a smooth transition.

In August 1989, Ali Akbar Hashemi-Rafsanjani, the speaker of the
National Assembly, was elected President by an overwhelming majority. 
He was re-elected June 11, 1993, with a more modest majority of about
63%; some Western observers attributed the reduced voter turnout to
disenchantment with the deteriorating economy.


GOVERNMENT The December 1979 Iranian constitution defines the
political, economic, and social order of the Islamic republic.  It
declares that Shi'a Islam of the Twelver (Jaafari) sect is Iran's
official religion.  The country is governed by secular and religious
leaders and governing bodies, and duties often overlap.  The chief
ruler is a religious leader or, in the absence of a single leader, a
council of religious leaders.  The constitution stipulates that this
national religious leader or members of the council of leaders are to
be chosen from the clerical establishment on the basis of their
qualifications and the high esteem in which they are held by Iran's
Muslim population.  This leader or council appoints the six religious
members of the Council of Guardians (the six lay members--lawyers--are
named by the National Consultative Assembly, or Majles); appoints the
highest judicial authorities, who must be religious jurists; and is
commander-in-chief of the armed forces.  The Council of Guardians, in
turn, certifies the competence of candidates for the presidency and the
National Assembly.

The president of the republic is elected by universal suffrage to a
four-year term by an absolute majority of votes and supervises the
affairs of the executive branch.  The president appoints and supervises
the Council of Ministers (members of the cabinet), coordinates
government decisions, and selects government policies to be placed
before the National Assembly.

The National Assembly consists of 270 members elected to a four-year
term.  The members are elected by direct and secret ballot.  All
legislation from the assembly must be reviewed by the Council of
Guardians.  The Council's six lawyers vote only on limited questions of
the constitutionality of legislation; the religious members consider
all bills for conformity to Islamic principles.

In 1988, Ayatollah Khomeini created the Council for Expediency, which
resolves legislative issues on which the Majles and the Council of
Guardians fail to reach an agreement.  Since 1989, it has been used to
advise the national religious leader on matters of national policy as
well.  It is composed of the heads of the three branches of government,
the clerical members of the Council of Guardians, and members appointed
by the national religious leader for three-year terms.  Cabinet members
and Majles committee chairs also serve as temporary members when issues
under their jurisdictions are considered.

Judicial authority is constitutionally vested in the Supreme Court and
the four-member High Council of the Judiciary; these are two separate
groups with overlapping responsibilities and one head.  Together, they
are responsible for supervising the enforcement of all laws and for
establishing judicial and legal policies.

The military is charged with defending Iran's borders, while the
Revolutionary Guard Corps is charged mainly with maintaining internal
security.  Iran has 25 provinces, each headed by a governor general. 
The provinces are further divided into counties, districts, and
villages.

Principal Government Officials Leader of the Islamic Revolution--Ali
Hoseini-Khamenei President--Ali Akbar Hashemi-Rafsanjani First Vice
President--Dr. Hasan Ebrahim Habibi Foreign Minister--Ali Akbar
Velayati Ambassador to the United Nations--Dr. Kamal Ali Naqi Kharazi


POLITICAL CONDITIONS Iran's post-revolution difficulties have included
an eight-year war with Iraq, internal political struggles and unrest,
and economic disorder.  The early days of the regime were characterized
by severe human rights violations and political turmoil, including the
seizure of the U.S. embassy compound and its occupants on November 4,
1979, by Iranian militants.

By mid-1982, a succession of power struggles eliminated first the
center of the political spectrum and then the leftists, leaving only
the clergy.  There has been some moderation of excesses both internally
and internationally, although Iran remains a significant sponsor of
terrorism.

The Islamic Republican Party (IRP) was Iran's dominant political party
until its dissolution in 1987; Iran now has no functioning political
parties.  The Iranian Government is opposed by a few armed political
groups including the Mojahedin-e-Khalq (People's Mojahedin of Iran),
the People's Fedayeen, and the Kurdish Democratic Party.


ECONOMY Pre-revolutionary Iran's economic development was rapid. 
Traditionally an agricultural society, by the 1970s, Iran had achieved
significant industrialization and economic modernization.  However, the
pace of growth had slowed dramatically by 1978, just before the Islamic
revolution.

Since the revolution, increased government involvement in the economy
has further stunted growth.  Iran's current difficulties can be traced
to a combination of factors.  Economic activity, severely disrupted by
the revolution, was further depressed by the war with Iraq and by the
decline of oil prices beginning in late 1985.  After the war with Iraq
ended, the situation began to improve:  Iran's GDP grew for two years
running, partly from an oil windfall in 1990, and there was a
substantial increase in imports.

A decrease in oil revenues in 1991 and growing external debt, though,
dampened optimism.  In March 1989, Khomeini had approved Rafsanjani's
five-year plan for economic development, which allowed Iran to seek
foreign loans.  But mismanagement and inefficient bureaucracy, as well
as political and ideological infighting, have hampered the formulation
and execution of coherent economic policies.

All major business and industrial growth indicators are significantly
below pre-revolutionary levels; unemployment was estimated to be 30%
for 1993.  Although Islam guarantees the right to private ownership,
banks and some industries--including the petroleum, transportation,
utilities, and mining sectors--have been nationalized.  The
import-dependent industrial sector is further plagued by low labor
productivity, lack of foreign exchange, and shortages of raw materials
and spare parts.

Agriculture also has suffered from shortages of capital, raw materials,
and equipment, as well as from the war with Iraq; in addition, a major
area of dissension within the regime has been how to proceed with land
reform.

Oil revenues have been affected by the decline of oil prices.  Oil
accounts for about 90% of Iran's exports; because of reduced revenues,
the government has imposed austerity measures, adding to the hardships
of the Iranian people.  In 1993, Iran's OPEC quota was about 3.4
million barrels per day, and estimated production was 3.5 million
barrels per day.

Iran was unable to meet its obligations on short-term debt in 1993; by
the end of the year, it was more than $9 billion in arrears on
payments.  Early in 1994, estimates of Iran's debt ranged from $16
billion to $30 billion.


FOREIGN RELATIONS Khomeini's revolutionary regime initiated sharp
changes from the foreign policy pursued by the Shah, particularly in
reversing the country's orientation toward the West.  In the Middle
East, Iran's only significant ally has been Syria.  Iran's regional
goals are dominated by wanting to establish a leadership role, curtail
the presence of the U.S. and other outside powers, and build trade
ties.

In broad terms, Iran's "Islamic foreign policy" emphasizes:

--  Vehement anti-U.S. and anti-Israel stances; --  Eliminating outside
influence in the region; --  Exporting the Islamic revolution; -- 
Support for Muslim political movements abroad; and --  A great increase
in diplomatic contacts with developing countries.

Despite these guidelines, however, bilateral relations are frequently
confused and contradictory due to Iran's oscillation between pragmatic
and ideological concerns.

The country's foreign relations since the revolution have been
tumultuous.  In addition to the U.S. hostage crisis, tension between
Iran and Iraq escalated in September 1980, when Iraq invaded Iran. 
Much of the dispute centered around sovereignty over the waterway
between the two countries, the Shatt al-Arab, although underlying
causes included each nation's overt desire for the overthrow of the
other's government.  Iran demanded the withdrawal of Iraqi troops from
Iranian territory and the return to the status quo ante for the Shatt
al-Arab as established under the 1975 Algiers Agreement signed by Iraq
and Iran.  After eight punishing years of war, in July 1988, Iran
agreed to UN Security Council Resolution 598, which called for a
cease-fire.  The cease-fire was implemented on August 20, 1988; neither
nation had made any real gains in the war.

Iran's relations with many of its Arab neighbors have been strained by
Iranian attempts to spread its Islamic revolution.  In 1981, Iran
supported a plot to overthrow the Bahraini Government.  In 1983, Iran
expressed support for Shi'ites who bombed Western embassies in Kuwait,
and in 1987, Iranian pilgrims rioted during the Hajj (pilgrimage) in
Mecca, Saudi Arabia.  Nations with strong fundamentalist movements,
such as Egypt and Algeria, also mistrust Iran.  Iran backs Hizballah,
Hamas, the Palestinian Islamic Jihad, and the Popular Front for the
Liberation of Palestine-General Command--all groups violently opposed
to the Arab-Israeli peace process.

Relations with Western European nations have alternated between
improvements and setbacks.  French-Iranian relations were badly
strained by the sale of French arms to Iraq.  Since the war, relations
have improved commercially but periodically are worsened by
Iranian-sponsored terrorist acts committed in France.

Another source of tension has been Ayatollah Khomeini's 1989 call for
all Muslims to kill Salman Rushdie, British author of The Satanic
Verses, a novel many Muslims consider blasphemous.  The United Kingdom
has sheltered Rushdie, and strains over this issue persist.

Iran maintains regular diplomatic and commercial relations with Russia
and the other Newly Independent States of the former Soviet Union. 
Both Iran and Russia feel they have important national interests at
stake in developments in Central Asia and the Transcaucasus. Russian
and other sales of military equipment and technology concern Iran's
neighbors and the United States.

Iran spends about 14%-15% of its GDP on its military.  Branches of its
military include ground forces, a navy, an air force, and Revolutionary
Guard Corps.  The Iran-Iraq war took a heavy toll on these military
forces.  Iran is trying to modernize its military and acquire weapons
of mass destruction; it does not yet have, but continues to seek,
nuclear capabilities.


U.S.-IRANIAN RELATIONS On November 4, 1979, militant Iranian students
occupied the American embassy in Tehran with the support of Ayatollah
Khomeini.  Fifty-two Americans were held hostage for 444 days.  On
April 7, 1980, the United States broke diplomatic relations with Iran,
and on April 24, 1981, the Swiss Government assumed representation of
U.S. interests in Tehran.  Iranian interests in the United States are
represented by the Pakistani Government.

In accordance with the Algiers declaration of January 20, 1981, the
Iran-U.S. Claims Tribunal (located in The Hague, Netherlands) was
established for the purpose of handling claims of U.S. nationals
against Iran and of Iranian nationals against the United States.  U.S.
contact with Iran through The Hague covers only legal matters.

Commercial relations between Iran and the United States consist mainly
of Iranian purchases of food and manufactured products.  The U.S.
Government prohibits the export of military and dual-use items to Iran
as well as items forbidden under anti-terrorism legislation; it
prohibits all imports from Iran.

There are serious obstacles to improved relations between the two
countries.  The U.S. Government defines five areas of objectionable
Iranian behavior:  Iranian efforts to acquire nuclear weapons and other
weapons of mass destruction, its involvement in international
terrorism, its support for violent opposition to the Arab-Israeli peace
process, its threats and subversive activities against its neighbors,
and its dismal human rights record.  The U.S. believes that normal
relations are impossible until Iran's behavior changes.  However, the
United States has offered to enter into dialogue with authorized
representatives of the Iranian Government without preconditions.  The
Iranian Government has not accepted this offer.  The United States has
made clear that it does not seek to overthrow the Iranian Government
but will continue to pressure Iran to change its behavior.

(###)



TRAVEL ADVISORY The Department of State warns all U.S. citizens against
travel to Iran, where danger continues for Americans because of the
generally anti-American atmosphere and Iranian Government hostility to
the U.S. Government.  U.S. citizens traveling to Iran have been
detained without charge, arrested, and harassed by Iranian authorities.
 The U.S. Government does not have diplomatic or consular relations
with the Islamic Republic of Iran and prohibits imports of goods from
Iran as well as exports of some goods to Iran.

(###)



Published by the United States Department of State  --  Bureau of
Public Affairs  --  Office of  Public Communication  --  Washington, DC
 July 1994  --  Managing Editor:  Peter A. Knecht

Department of State Publication 7760  --  Background Notes Series For
sale by the Superintendent of Documents, U.S. Government Printing
Office, Washington, DC  20402.

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