National Geographic : 1999 Jul
(from $36 a barrel in 1981 to about $11 in 1998) and production problems in Iran have caused a slide in oil revenue from 22 billion dollars in 1976 to 10 billion in 1998-a huge setback considering that oil is Iran's number one source of export earnings. Since the inception of the Islamic republic the economy has suffered other blows as well: the flight of many of the country's business and technical elite, the protracted war with Iraq, trade sanctions by the U.S., a doubling of the population. The regime worsened matters by nationalizing all the major industries; spending more than 11 billion dollars a year to IRAN: TESTING THE WATERS OF REFORM A mirror's many facets reflect a uniform realityin Qom, where women approach their entranceto a shrine. With some 30,000 theology students, Qom has supplantedAn Najaf,Iraq, as the world's center of Shiite scholarship. subsidize the prices of gasoline, bread, and electricity; discouraging foreign investment by confiscating businesses; and allowing shady government foundations to dominate such important areas as real estate. President Khatami's allies say he under stands the need for reforms, but it's a huge challenge in a country riven by ideological splits and ruled by clerics with little under standing of economics. In late 1998 his government proposed raising the price of state-subsidized gasoline, which, at 12 cents a gallon, is the world's cheapest. That proposal was shot down by the conservative parliament, which preferred to continue popular policies. As a result of all this, families like the Shafeis are having to make do with less. The average income of Iranians in 1999 dollars has fallen from about $2,600 in 1976 to $1,800 today. Even so, Iran is not an impoverished nation. Indeed Iranians have a living standard many times higher than those of their central and south Asian neighbors, such as Pakistan, Afghanistan, and India. While the ailing economy and heavy-handed religious rule have eroded support for the supreme leader, Ali Khamenei, he retains a core of ardent followers. This conservative bulwark is closely tied to several phenomena: devout Muslim faith, continuing belief in the revolution, and the war with Iraq. To feel the fire of devotion to the regime, one need only visit Khorramshahr on the Iraqi border. The city suffered more than any other during the war, which began on September 22, 1980, when Saddam Hussein invaded Iran to reclaim what he contended was Iraqi territory. The war dragged on for eight years, killing an estimated million people all told. Near the northern end of town, close to the Shatt al Arab waterway-the border with Iraq-is a neighborhood where date palms once grew in profusion among the mud and brick houses. Flattened during the war, the palm trees and old houses have been replaced by rows of two-story, beige stucco apartments.