Iran

Known as Persia until 1935, Iran became an Islamic republic in 1979 after the ruling monarchy was overthrown and the shah was forced into exile. Conservative clerical forces established a theocratic system of government with ultimate political authority vested in a learned religious scholar referred to commonly as the Supreme Leader who, according to the constitution, is accountable only to the Assembly of Experts. Iranian-US relations have been strained since a group of Iranian students seized the US Embassy in Tehran on 4 November 1979 and held it until 20 January 1981.

During 1980-88, Iran fought a bloody, indecisive war with Iraq that eventually expanded into the Persian Gulf and led to clashes between US Navy and Iranian military forces between 1987 and 1988. Iran has been designated a state sponsor of terrorism for its activities in Lebanon and elsewhere in the world and remains subject to US economic sanctions and export controls because of its continued involvement. Following the election of the reformist Hojjat ol-Eslam Mohammad KHATAMI as president in 1997 and similarly a reformist Majles (parliament) in 2000, a campaign to foster political reform in response to popular dissatisfaction was initiated.

The movement floundered as conservative politicians prevented reform measures from being enacted, increased repressive measures, and made electoral gains against reformers. Starting with nationwide municipal elections in 2003 and continuing through Majles elections in 2004, conservatives reestablished control over Iran's elected government institutions, which culminated with the August 2005 inauguration of an ultra-conservative layman as president.

chief of state:

Supreme Leader Ali Hoseini-KHAMENEI (since 4 June 1989)

head of government:

President Mahmud AHMADI-NEJAD (since 3 August 2005); First Vice President Parviz DAVUDI (since 11 September 2005)

cabinet:

• Council of Ministers selected by the president with legislative approval;
• the Supreme Leader has some control over appointments to the more sensitive ministries

note: also considered part of the Executive branch of government are three oversight bodies: 1) Assembly of Experts, a popularly elected body of 86 religious scholars constitutionally charged with determining the succession of the Supreme Leader - based on his qualifications in the field of jurisprudence and commitment to the principles of the revolution, reviewing his performance, and deposing him if deemed necessary;

2) Expediency Council or the Council for the Discernment of Expediency, is a policy advisory and implementation board consisting of permanent members, who number over 40 and represent all major government factions and include the heads of the three branches of government, and the clerical members of the Council of Guardians (see next);

permanent members are appointed by the Supreme Leader for five-year terms; temporary members, including Cabinet members and Majles committee chairmen, are selected when issues under their jurisdiction come before the Expediency Council; the Expediency Council exerts supervisory authority over the executive, judicial, and legislative branches and resolves legislative issues on which the Majles and the Council of Guardians disagree and since 1989 has been used to advise national religious leaders on matters of national policy;

in 2005 the Council's powers were expanded, at least on paper, to act as a supervisory body for the government; 3) Council of Guardians of the Constitution or Council of Guardians or Guardians Council is a 12-member board made up of six clerics chosen by the Supreme Leader and six jurists selected by the Majles from a list of candidates recommended by the judiciary (which in turn is controlled by the Supreme Leader) for six-year terms;

this Council determines whether proposed legislation is both constitutional and faithful to Islamic law, vets candidates for suitability, and supervises national elections

elections:

• Supreme Leader appointed for life by the Assembly of Experts;
• Assembly of Experts elected by popular vote for an eight-year term;
• last election held 15 December 2006 concurrently with municipal elections;
• president elected by popular vote for a four-year term (eligible for a second term and third nonconsecutive term);
• last held 17 June 2005 with a two-candidate runoff on 24 June 2005 (next presidential election slated for 2009)

election results:

Mahmud AHMADI-NEJAD elected president; percent of vote - Mahmud AHMADI-NEJAD 62%, Ali Akbar Hashemi-RAFSANJANI 36%

Iran's economy is marked by a bloated, inefficient state sector, over reliance on the oil sector, and statist policies that create major distortions throughout. Most economic activity is controlled by the state. Private sector activity is typically small-scale workshops, farming, and services.

President Mahmud AHMADI-NEJAD has continued to follow the market reform plans of former President RAFSANJANI, with limited progress. Relatively high oil prices in recent years have enabled Iran to amass nearly $60 billion in foreign exchange reserves, but have not eased economic hardships such as high unemployment and inflation.

The proportion of the economy devoted to the development of weapons of mass destruction remains a contentious issue with leading Western nations.