Iran’s Shadow Economy and the Real Reason For Diplomacy’s Demise

by sawamix


(By American Zen‘s Mike Flannigan, on loan from Ari.)

From laser eye surgery and construction to automobile manufacturing and real estate, the IRGC has extended its influence into virtually every sector of the Iranian market… The subtext of this apparent economic populism is, of course, the IRGC’s control of Iran’s shadow economy—the illicit smuggling networks, kickbacks, no-bid contracts, and the accumulation of wealth by its senior officials that remains largely unseen by the Iranian population. Added to this is the inevitable displacement of traditional business elites by its monopolization of key financial sectors. Yet reports of opposition to this growing dominance remain largely at the anecdotal level. – Page 55 of The Rand Corporation’s “The Rise of the Pasdaran”.

As the post-election violence in Iran again begins to escalate, a reexamination of its ongoing “revolution” becomes necessary, beginning with the very definition of the word revolution. All commonly held definitions of the word say that a revolution is an upstart political or social body that rises up against the establishment with the intention of effecting radical change. According to Dictionary.com, a revolution is “a radical and pervasive change in society and the social structure, esp. one made suddenly and often accompanied by violence.”

Revolutions are not self-sustaining. History informs us that they inevitably either fail or ossify into an establishment itself. It is absolutely impossible to indefinitely sustain a revolution. Yet leaders such as Fidel Castro and Ayatollah Ali Khamenei still cling to the word that had once stirred the hearts and minds of the young in the halcyon days of 1959 and 1979 respectively. This is because the mere memory of what was once a revolution becomes their only defense against being seen as an establishment in need of being overthrown or, at the very least, for reform. Reform is all the Iranian protesters have in mind. They simply want a slice of the much ballyhooed democratic pie. Yet the message we’re getting from the Inner Party in Tehran is that these largely unarmed and disorganized protesters are themselves the next breed of revolutionaries hell-bent on overthrowing the status quo just as they were in 1979.

Through either soul-crippling, fully conscious evil or by practical necessity, establishments regardless of the religious or political fabric of the country, regardless of the avowed ideology or the language spoken, inevitably become corrupt. Said corruption almost always is done in the shadows away from the prying eyes of the people. Yet said corruption flourishes even while “revolutionary” leaders such as Castro and Khamenei laughably tell the proletariat that the revolution is not yet complete.

Earlier this year the Rand Corporation published an eye-popping report for the Office of the Secretary of Defense entitled “The Rise of the Pasdaran” (8 Mb 153 page .pdf file). It hardly made a ripple in either the press or the blogosphere when it had first come out because back then the election had yet to be held. The only time anyone mentioned Iran was in connection with their phantom nuclear weapons program brought up from one side of the ideological divide to the other.

Among many other things, Rand’s report to the Sec Def says that the Iranian Revolutionary Guard Corps (henceforth referred to as the IRGC) is a criminal organization that controls the black market and its smuggling operations (which one Iranian cleric recently said accounted for a staggering full third of that nation’s imports). Opening up diplomatic ties with the United States under a President Mousavi would come with conditions that would essentially put the kibosh on all their black market operations. And the IRGC, which does indeed fund terrorists, and the holy roller revolutionaries that control them aren’t about to let that happen.

What is so intriguing about Rand’s report is how, seemingly without any irony, in tracing the economic evolution of Iran, it reads like a parallel parable of what began happening in our own country at the same time under Clinton and especially Bush II:

The roots of the IRGC’s entry into the economic realm lie in the wake of the Iran-Iraq War, when Supreme Leader Khamenei instituted a formal ranking system into what had been a flat IRGC organization. The introduction of a genuine hierarchy began the process of inculcating the notion of perquisites, privileges, and status for the senior leadership of the IRGC into its institutional culture. The profit motive became even more pronounced in the 1992–1993 period, when business-savvy President Rafsanjani initiated the idea of involving government organizations in business transactions as a way to generate independent income. By the late 1990s, the process of economic expansion had begun in earnest, and it has accelerated even more during the Ahmadinejad presidency, which has favored the IRGC by offering it numerous lucrative no-bid contracts, especially in the areas of oil and natural gas extraction, pipeline construction, and large-scale infrastructure development.

“No-bid contracts especially in the areas of oil and natural gas extraction, pipeline construction, and large-scale infrastructure development.” Please, dear reader, stop me if this sounds slightly familiar.

To give you an idea of just how corrupt the Iranian government is, of how desperate they are in need of reform, let’s put it in context: Imagine an armed militia led by our nation’s youth that actually managed to overthrow the government. Then almost immediately, at the onset of a destructive, 8 year-long war with neighboring Canada, our revolutionary government began handing out to its revolutionary militia no-bid contracts and showing unreasonable favoritism toward it.

The militia then became less concerned with bringing the once-noble revolution to its next level, began farming out the actual head-cracking duties to a huge group of untrained thugs that’s basically an enormous neighborhood watch gone horribly, horribly wrong. The revolutionary militia, now largely freed from its day-to-day responsibilities, then concentrates on black market and smuggling operations while sinking its talons into virtually every legitimate industry in our nation’s infrastructure.

Not quite fascist, not quite communist, our new revolutionary nation is brutally governed by a theocratic cover that blurs the lines between government and industry, not quite nationalizing these industries as in communist regimes yet more than merely snuggling up to industry in a typical fascist government.

That’s essentially what’s going on in Iran right now and has been going on for three decades. When we know this and when we remember how brutally and even murderously oppressive the Iranian government, IRGC and the basiji have been since June 13th, we have some additional context for understanding why the youth of Iran have finally gotten it right and are clamoring for the democracy they’ve been promised yet denied.

So you see, ideology has nothing to do with anything. Whether you’re talking about a capitalist society such as ours or a fascistic theocracy such as Iran, money is still the grease that keeps the world moving and pits nations against each other. And the crowning irony is that not only are many Americans unaware that this is the real root for their belligerent stance against us but so are the young Iranians protesting to not upset or replace the status quo but to improve it through progressive reform (a fact also pointed out in page 55 of the Rand report).

Just as the Aryan Brotherhood, a notorious prison-based network, was revealed to be nothing more than a drug-dealing, bottom line-driven criminal entity in spite of its pretensions to white supremacy, the “revolutionary” Iranian government is essentially made of crooks and liars just as our existing nonrevolutionary government. They all use the same sleazy tricks like no-bid contracts and use the muscle of government to control the infrastructure just as we’ve seen here only in reverse.

The pigs and humans, ancient antagonists, are indeed beginning to look more and more alike once you strip them of their robes and turbans and Brooks Brothers suits and flag lapel pins.