Review of Hidden Iran by Ray Takeyh

Ray Takeyh's Hidden Iran is both a trainspotters guide to the Islamic Republic of Iran's different factions and an exposition of Iran's foreign policy. It contains a plea for the United States to "get Iran right" - avoiding a simplistic, counter-productive policy towards Iran and to understand how statements and policies strengthen and weaken different factions. It is critical of both American and Iranian politicians, but aims to uncover why different factions make the moves that they do and how their enemies and allies undermine their efforts. It also covers Iran's support for terrorism and shows have the Islamic Republic is willing to abandon support for terrorism if it can achieve its pragmatic foreign policy objectives another way.

Takeyh's outlines 3 principal factions within the government of the Islamic Republic:

• Hardliners/conservatives around Ayatollah Khameini. This group includes Mahmoud Ahmadinejad and other Iran-Iraq war veterans. These people are less pragmatic than other factions and remain true to Khomeini's vision of the Islamic Republic. They support and defend velayat-e faqih (rule of the jurisprudent). Many of the supporters and members of this grouping are relatively young, their first experiences of politics being during the era of the Islamic Republic. Takeyh often describes this group as "the Right". Khameini is the real power holder and although he belongs to this group, certainly politically, he displays a flair for keeping all 3 factions under control (and not challenging his power).
• Pragmatists around Rafsanjani. This group contains many of the original players from the formation of the Islamic Republic. A primary concern for this group is the economy and not ideology (as with the hardliners). They want to address the poor state of the Iranian economy and bring Iran out of economic isolation.
• Reformists for whom Khatami became a figurehead. Whilst this group does not challenge the base of the Islamic Republic's power structure (velayat-e faqih and the extra-electoral positions of the Supreme Leader and Guardian Council) they stand for liberalising Iran's economy and allowing civic society to flourish (within limits). Takeyh criticises Khatami for being too timid to stand up to Khatami or to change the structure of power in the Islamic Republic when he had the change. But he also understands the very real obstacles put in the path of the reformists. He also describes how (in a pattern similar to the activities of the Right in the USA) the reformists have been out-maneuvered by regime hardliners for many of the positions of power in the Islamic Republic.

Khatami's attempts at reform failed because:

At every step of the way, the conservative obstructionism enjoyed the approbation of Ayatollah Khameni and the hard-line leadership... The conservative countermeasures were intended not simply to weaken the reform movement but to demonstrate to the populace the futility of elections in altering the demarcations of the sate and the citizenry's irrelevance in the political process. In essence, the conservatives sough to disillusion the public and provoke their retreat from public affairs. And this is where the reformers' strategy of incrementalism faltered - it simply could not overcome the instransigence of a core group of hard-liners who had to the power to preclude meaningful change to Iran's political structure. p. 52

Takeyh explains how the United States' belligerent attitude to Iran, formal and informal economic sanctions, pressure on the international banking system and lack of understanding of the factions within the Islamic Republic has led to the empowerment of the forces it criticises the most:

Hovering over all of this is the reality that the hard-liners today are one of the few segments of Iranian society that is actually benefiting from the current economic order. The mainstay of the right-wing power bloc remains the vast religious foundations, the bonyads, which have come to dominate the trade and manufacturing sectors. The bonyads began in the aftermath of the revolution are religious foundations that expropriated the assets of the defunct monarchy for philanthropic purposes. However, in the intervening quarter-century they have metamorphosed into huge holding companies that dominate key industries while evading competition and state regulation. These interests are inimical to a truly free market and dissuade their beneficiaries - mostly conservative clerics and other defenders of the current system - from implementing any serious structural reforms to Iran's economy.

Such corrupt practices are not being emulated by the Revolutionary Guards, who in recent years have steadily intruded into economic activities, establishing their own commercial firms with privileged access to contracts in key industries such as telecommunications and imported consumer goods. Through this network of companies, the Guards have enhanced their patronage power, allowing them to further cultivate their constituents. p. 38

The rhetoric and ideology of the hardliners puts them in a difficult position. Since their assumption of power in the 2005 presidential elections, they are the sole faction in power, and as Takeyh argues, the economy is their problem. They will get credit for any economic upturn but also criticism is the economy continues as it is. The populist ideology - in line with Khomeini's vision for uplifting the poor - is not good news for the Iranian economy. An example is Ahmadinejad's recent wage increase for saffron pickers (which will endear him to them in the short term) but will prevent the industry from being able to export saffron at a low enough price for the international market.

The subsidies that cause high levels of inflation and corruption in Iran are unlikely to disappear under Ahmadinejad's government. The outrage seen when fuel rationing was introduced could be destabilising for the hardliners - particularly when the religious working class and rural poor - key power bases for the conservatives are affected the most. Takeyh suggests that the populism and mismanagement of the economy and the contradiction between what is possible and the rhetoric of the those wishing to return to the early days of the Islamic Republic may be the undoing of the hardline faction within Iranian politics.

In a joint article with Vali Nasr in The Washington Post Takeyh argues that America should take a more nuanced approach and empower the non-state sectors of the Iranian economy:

The clerical regime has also proved to be enterprising in facing demands for reform, particularly by using elections to manage opposition within the bounds of the Islamic republic. Economic isolation, supported by international sanctions, has kept the private sector weak, which has in turn denied supporters of change levers they could use to pry open the regime. The public sector accounts for more than 80 percent of the Iranian economy, and the constitution gives the clerical leadership most of the power. The problem facing democracy is not so much the state's theocratic nature as it is the enormous domination it enjoys over the economy, society and politics. For democracy to succeed, the state's domination of the economy and society must be reduced...

Ironically, though, U.S. policy has buttressed the Iranian regime, which has justified its monopoly of power as a means of fending off external enemies and managing an economy under international duress...

Paradoxically, to liberalize the theocratic state, the United States would do better to shelve its containment strategy and embark on a policy of unconditional dialogue and sanctions relief. A reduced American threat would deprive the hard-liners of the conflict they need to justify their concentration of power. In the meantime, as Iran became assimilated into the global economy, the regime's influence would inevitably yield to the private sector, with its demands for accountability and reform.

Later in the book Takeyh describes Iran's foreign policy with attention paid to the Gulf States, Israel and the United States. He covers support for disruption and campaigns against the Gulf States and Israel, how Iran moved away from the campaigns against the Gulf States, attempts at dialogue with the United States and much more. It is an interesting book that provides a lens through which factional politics in Iran can be understood by people outside Iran.