625 December 27, 1987 PLANNING FOR A POST-KHOMEINI IRAN Iranian leader Ayatollah Ruhollah Khomeini is 85 years old and in declining health. He probably soon will pass from the Iranian political scene. The power struggle to succeed him already has begun and will intensify once he is gone. The time has come, therefore, for the United States to position itself to establish a working relationship with post-Khomeini Iran.

Iran remains a key piece of the global geopolitical jigsaw puzzle. The West cannot afford to ignore Iran because it looms large as a dominant regional power and forms a critical buffer between the Soviet Union and the oil-rich Persian Gulf.

A Soviet-dominated Iran would become a strategic stepping stone that could enable Moscow to establish hegemony over the 55 percent of the world's oil resewes located in the Persian Gulf and ultimately to gain dangerous leverage over Western sta tes dependent on that oil. Clearly, the primary long-term US. goal must be to prevent such Soviet control Protecting US. Interests. In the short term, the main challenge to U.S interests in the Persian Gulf comes from Iran, not the Soviet Union. Iran is n o t just a passive strategic prize but an aggressive revolutionary state bent on exporting its radical brand of Islamic fundamentalism throughout the Muslim world. The key objective for U.S. policy is to reconcile its near-term goal of containin the Soviet p enetration of the Persian Gulf region. This means devising policies that F acilitating the southern expansion of the Soviet empire than the leader of a state. Washington must craft a policy that takes into consideration the dynamics of Iran's on oing revo l ution, not just Iran's geopolitical discredited and discarded long ago. But there are pragmabsts who have tempered their revolutionary militance with a realistic appreciation of Iran's international destabilizing effects of the Iranian revolution with its long-term goal o I averting rotect U.S. interests and friends in the Middle East from Iranian aggression without Ayatollah Khomeini is best understood as the leader of a revolution, rather interests. There are no "moderates" le a in Iran's ruling reeme. S u ch men were -2 position and the needs of its people. Washington should lek from past experience and avoid reaching out publicly to the least hostile Iranian factions, which would only discredit them. Instead, the U.S. must penalize the Iraqian hardliners, not merely reward the softliners Carrots and Sticks. As long as Ayatollah Khomeini survives, the U.S. ability to influence Iran remains limited. The U.S. can present Iran with disincentives to terrorism in the form of arms embargoes, oil boycotts, support of Iranian opposition groups, U.S. warships patrolling the Persian Gulf, and the threat of military repnsals. Once Khomeini is gone, however, Iran's revolutionary ardor is likely to cool, and American incentives will grow more appealing. After Khomeini's d emise Washington should patiently offer Iran carrots in addition to sticks. Among them Help Iran negotiate an end to its war with Iraq on terms that do not threaten other Gulf states Offer economic and technical aid in rebuilding Iran's war-tom economy pa r ticularly the oil and manufacturing industries Offer cooperation against Soviet military and subversive threats to Iran and other regional states, particularly Afghanistan Offer to eschew U.S. support of Iranian opposition and separatist groups in return f or a reduction of Iranian support for anti-Western terrorist and revolutionary groups. I The long-term U.S. goal should be to build a working relationship with an Iran that maintains its territorial integrity, acts as a barrier to the southern expansion o f Soviet influence, renounces terrorism, and ceases efforts to export revolution 4 IRAN'S REVOLU'IIONARY POLITICS The Iranian revolution is a living volcano that spews destabilizing political lava throughout the Middle East. The 1979 overthrow of Shah Moha mmed Reza Pahlavi by a broad ad hoc coalition of divergent political groups was only the opening hase, not the culmination of the, revolution. In a senes of purges, radical Muslim.

K ndamentalist clerics systematically stripped away the power and legitimac y of liberal nationalists, Islamic socialists, and radical leftists. Led by the wily Ayatollah Khomeini, the fundamentalists divested rival groups of power before they could develop a solid domestic base of support or foreign patronage in the past century Iranian revolutionary coalitions of Westernized and Islamic elements .failed to sustain their political gains when the Westernized factions defected from the revolutionary camp. Most recently, the Shah was overthrown in 1953 but had been restored to power in a U.S.-supported coup when elements of the Iranian military defected from Mohammed Mossadegh's revolutionary movement.

Hard-line fundamentalists were therefore chagrined to find the Carter Administration History of Revolution. The fundamentalists were acutely aware that four times -3 seeking reconciliation with the moderate provisional government of Prime Minister Mehdi Bazargan within months after the fall of the Shah. On November 1, 1979 National Security adviser Zbigniew Brzezinski met Bazargan and I ranian Foreign Minister Ibrahim Yazdi in a high profile meeting in Algers. To block a restoration of the U.S. connection and discredit Bazargans moderate approach, Iranian fundamentalists sacked the U.S. Embassy in Tehran on November 4, 1979, and plunged Iran into the 444-day hostage crisis.

This event was mainly an outgrowth of the power struggle within the fraying revolutionary coalition that had toppled the Shah. The fundamentalists engineered taking the hostages to undermine the provisional government by underscoring its lack of authority, to expose secular moderates as American sympathizers, and to steal a march on the growing leftist camp by monopolizing the popular antids American soapbox. The long-running crisis also served to rekindle waning revol u tionary fervor and distract attention from festering economic and social problems that the fundamentalists were ill-prepared to reso1ve.l the fundamentalist campaign to whittle away the power of Bazargans successor Abolhassan Bani-Sadr, elected President in January 19

80. A socialist economist with strong Islamic beliefs, Bani-Sadr was not a full-fledged member of the fundamentalist camp and was critical of the embassy seizure, which he perceived as counterproductive. Bani-Sadrs diplomatic efforts to defus e the crisis were denounced by hard-line fundamentalists and repeatedly vetoed by Ayatollah Khomeini.

A weakened Bani-Sadr was permitted by the fundamentalists to end the hostage crisis only after the September 1980 outbreak of the Iran-Iraq war gave radi cals an alternative means of galvanizing popular support. Outmaneuvered by his fundamentalist rivals, Bani-Sadr fled into exile in July 1981 after his followers were overwhelmed by fundamentalists in bloody street clashes Useful Tools As the crisis dragge d on, the hostages became useful tools in Bani-Sadrs ouster and the purge of the Mujahideen-e-Khalq (Peoples Mujahideen Organization) enabled the fundamentalists, now organized as the Islamic Republican Party, to gain total control over the organs of gover n ment. Since then Iranian domestic politics essentially has become a dialogue between factions of fundamentalists. Because they share common values, goals, and loyalty to the charismatic Khomeini, their differences generally are tactical in nature. Politic al alignments are issue specific, with kaleidoscopic ad hoc coalitions shifting according to the question at hand. Personal rivalries, rather than institutional affiliation or ideological affinities, tend to dominate politics.

Ultimate Arbitex. The quasi-deification of Khomeini as the supreme religious guide (VeZayat-e Faghih) makes him the ultimate arbiter of political controversies.

Khomeini holds himself above the fray of day-to-day politics, but sets the limits of debate and mediates between contending factions on important issues top leaders of Iran are longtime disciples of Khomeini. Ayatollah Hussein Ali Most of the 1. See James Phillips, Iran, the United States and the Hostages: After 300 Days, Heritage Foundation Backgmunder No. 126, August 29, 19 80. -4 Montazeri, Khomeini's hand-picked heir ap arent, is an advocate of moderate revolutionary foreign policy.

Iran's President, Hojatolislam Ali Khamenei, is a radical who favors state control of the economy, extensive land reform, and maximum efforts t o export Iran's revolution. Another of Khomeini's clerical proteges, Hojatolislam Ali Akbar Hashemi Rafsanjani, is the shrewd Speaker of the Majlis (parliament), the dominant branch of the Iranian government. A pragmatic and ambitious behind-the-scenes op e rator, Rafsanjani has emerged as the prime political powerbroker within lthe ruling regime. Prime Minister Mir Hussein Moussavi, the only nonclerical figure among Iran's top five leaders, has been hamstrung by the Majlis and carries little weight domestic policies (greater civil liberties an B free enterprise) and aggressive I THE m-KHoMEINI POWER muGGLE In the immediate aftermath of Khomeini's death, Khomeini's hand-picked succesor Ayatollah Montazeri is likely to rise to the forefront of Iran's .leadersh i p. Although he is Khomeini's protege, Montazeri lacks Khomeini's popular appeal theological credentials, and political savvy. He will be unable to fill Khomeini's shoes and his authority is likely to be challenged by resentful senior clerics who consider h im to be an upstart. Moreover, Ayatollah Mohammed Reza Golpaygani and Ayatollah Hassan Tabatabai Qud, two of Iran's most revered religious leaders, disapprove of direct clerical rule and favor -a return to a traditional less active clerical involvement in government affairs. They were reluctant to criticize Khomeini's radical activism but are likely to become increasingly forceful in opposing the pervasive role of clerics within the government. This will undermine the moral absolutism that was a prime sour c e of strength to Khomeini's rule.2 Islam'sT te. During what presumably will be an initial honeymoon period, Montazeri is likely to form a triumvirate with Hojatolislam Rafsanjani and President Khamenei. Yet Khamanei's power is waning. He lost an important power base when the Islamic Republican Party was disbanded. He is required by Iran's constitution, moreover, to step down as President when his second term expires in 1989 Rafsanjani is well positioned for any power struggle. As Speaker, he dominates the p arliament and as Khomeini's representative on the Supreme Defense Council, he has established contacts within the military. Furthermore, he is close to Minister of Revolutionary Guards Mohsen Rafiq-Dust, his brother Mohammed controls Iranian television, a nd he enjoys good relations with Khomeini's son Ahmed, who will be a key trustee of Khomeini's legacy. Over time, the cunning Rafsanjani may emerge as Iran's chief political leader, consigning Montazeri to figurehead status.

Because there is no precedent f or the peaceful transfer of power in Iran, the post-Khomeini power struggle may become violent. Past disputes between rival 2. See Shahrough Akhavi Elite Factionalism in the Islimic Republic of Iran," Middle East Journal Spring 1987. -5 clerical factions a lready have triggered street clashes and shoot-outs between rival Revolutionary Guard units and may trigger similar incidents in the future. If factional competition degenerates into a slow motion civil war, then military intervention to restore order bec o mes increasingly possible. Such military action however, will not resemble the 1953 coup against Mossadegh. The Iranian army today does not have the necessary cohesion or centralized command structure, and further, it will be deployed at the battlefront, f ar from the centers of power, for as long as the war with Iraq A future coup is much more likely to come from the Revolutionary Guards, Iran's 350,000 man praetorian guard. It is this institution that should be monitored carefully for clues about Iran's f uture direction.

Khomeini regime's ovemding short-term foreign policy goal is to win its brutal Moreover, the war itself can be laid at war of attrition with Iraq. Indeed, with 300,000 Iranians dead by conservative estimates, the regime must achieve a clear-cut victory in the war to justify the enormous human and economic sacrifices the doorstep of Iranian radical fundamentalists since their attempts to export their revolution to neighborin Iraq, combined with Iraqi territorial ambitions, helped I The war is much more than a clash of two nations with a long history of trigger Iraq's invasion o H Iran in the first place enmity. Nor is it just a Persian-Arab clash. It is a collision of two incompatible revolutions--Iran's pan-Islamic fundamentalist revolution against Iraq's B a'athist pan Arab secular socialist revolution. At stake for Iran is the future of the revolution and possibly even the survival of the ruling regime Fostering Realisa The stalemated war has fostered greater realism in Tehran.

Early in the war Iran attempt ed to offset Iraq's superior firepower with human wave attacks to take advantage superior Iranian manpower. More recently, Iran has altered its strategy to reduce casualties, motivated by a growing war weariness among its people, rising draft evasion, and spontaneous antiwar protests. Anti overnment demonstrahons protesting the regime's inability to protect its kom Iraqi bombing raids erupted in pro-Khomeini working class neighbor oods in April 19

85. Influential religious leaders have publicly asked Khome ini to seek a nonmilitary solution to the ~onflict.~ Even elements of the fanatic Revolutionary Guards have staged an antiwar demonstration urging "forgiveness" of Saddam Hussein rple 3. See Nikola Schahgaldian, The Iranian Military Under the Islamic Repu b lic RAND Corporation March 1987 4. See Shaul Bakhash, "Iran and the Americans Nav Yok Review of Books, January.15 1987 5. The Wmhington Post, May 17, 1987, p. 1431. -6 THE U.!L-IRA" ARMS DEAL Because the implacable Khomeini ruled out compromise with Iraq, his lieutenants scurried to reduce opposition to the war by acquiring modem weapons to lower civilian and military casualties. Iranian officials, operating through a facade of Iranian, Saudi, and Israeli middlemen, contacted American officials in search o f these weapons. The U.S. had been the chief arms supplier to Iran before the revolution but had halted arms transfers during the hostage crisis, cripplin8 the effectiveness of Iran's military forces To reestablish an arms supply relaQonship covertly, Iran i an officials dangled American hostages in front of Washington and hinted that Iran would tone down its revolutionary foreign policy in the future The triumph of the logic of the state over the logic of the revolution also tilted the internal power balance in Iran. Hojatolislam Rafsanjani, a pragmatist who championed discreet openin revolutionaries such as Mehdi Hashemi, the head of the Office of Liberation Movements. Hashemi's brazen efforts to foment fundamentalist revolutions and support terrorism had da maged Iran's war effort by leading apprehensive Arab Gulf states to increase their support for Iraq, by straining relations with Syria, Iran's only significant Arab ally, and by raising tensions with Western states.

In October 1986 Hashemi was arrested along with two hundred other radicals.

In retaliation his supporters sought to undermine Rafsanjani by leaking the story of the U.S.-Iran arms deals to a Lebanese newspaper As during the hostage crisis U.S. policy toward Iran once again was frustrated by int ernecine Iranian power struggles to the West, the Arab world, the People's Republic of China, and Japan, succesfuly P convinced Ayatollah Khomeini to rein in militant SHORT-TERM US. PoIdcy 'IOWARD IRAN The war with Iraq has led Iran to escalate pressure o n Iraq's Arab backers particularly Kuwait, in an attempt to intimidate them into reducing their support for Iraq. After Kuwait appealed to the su erpowers to neutralize Iran's bullying tactics Washington agreed in early 1987 to re if ag and escort 11 .of K uwait's 22 oil tankers.

Three major reasons have been cited for this decision: to preclude Moscow's securing a foothold in the Gulf by posing as Kuwait's protector, to safeguard the free flow of oil in the Persian Gulf, and to prevent the war from spreadin g to the Arab side of the Gulf. While the reflagging policy has had only a limited success in meeting these three goals, it makes much more sense in the context of a fourth U.S. goal--the containment of the Iranian revolution 6. See James Phillips, The Co n tinuing Need for a U.S. Opening to Iran," Heritage Foundation Backpunder No. 566, Mar& 5, 1987 7. See James Phillips High Stakes for the U.S. in the Persian Gulf Heritage Foundation Backpunder No. 594, July 20, 1987.) L 7 Failed Attempts Washington's atte mpts to reestablish a working relationship with Iran have twice run afoul of the politmil dynamics of the Iranian revolution.

In 1979, a premature effort to stage a rapprochement with revolutionary Iran through contacts with Iranian moderates in the provis ional government onl Iranian radicals and undermined the moderates involved. In 1986, U.S. e H orts to establish a dialogue with the pragmatic Rafsanjani faction of Iran's revolutionary government was foiled by a mal faction that resisted moderation of Ir an's revolutionary strategy.

Clearly, as long as Iran is hobbled by factional infighting, one of the contending factions probably will have an interest in exposing and denouncing talks with the U.S., the "Great Satan," if only to -discredit its domestic ri vals. A true U.S.-Iran rapprochement therefore must await the consolidation of political power. by a single Iraman faction itself to damaging domestic criticism, Washington must adopt a low profile wait-and see policy, keeping contact iith as many Iranian leaders and groups as possible.

Instead of seeking out "moderates" to reward, the U.S. should seek to block the goals of ultraradical revolutionaries and raise the perceived risks of their policies.

Iran must be convinced that the cost of its revolutiona ry excesses outweigh the benefits. To achieve this end Washington should sup orted terrorist activity. It should not allow Iran to extract. benefits from having duence" over Lebanese Shiite terrorists holding American hostages while disclaiming responsibi l ity for the hostages. There should be no concessions made to free hostages. Their release should be a precondition, not a goal, for improved relations. Iran should be warned that future terrorist attacks made to advance the cause of the Iranian revolution will penalize the Iranian state. Pressure should be brought to bear on Iran's most sensitive point--its war effort against Iraq. This war effort could be undermined, either indirectly through economic sanctions such as a boycott of Iranian oil exports, or directly through an arms embargo of Iran.

International cooperatih is needed to deter Iranian terrorism. The prospects for such cooperation dimmed noticeably last month when France cut a secret deal with Iran to free two French hostages held in Lebanon in exchange for a $330 million payment and freedom for a suspected Iranian terrorist. This capitulation to ranian radicals by Paris is far worse than anything the U.S. did in its dealings with Tehran to free American hostages Until a faction emerges that ca n deal openly with the U.S. without-exposing 1) Deter Iranian Terrorism. Washington must punish, not reward, Iranian Despite this action by the French, Washington must try to unite Western states a ainst appeasement of Iranian terrorism. Allowing Iran to p r ofit from the release that advocates the relentless export of Islamic revolution. I international sanctions do not raise the costs of Iranian terrorism above its benefits, then the U.S eventually may be compelled by Iranian terrorist acts to 80 it alone t o punish Iran with military reprisals, as in' the extremely successful April 1986 air strikes against Libya. terrorist training bases, but also against Iran's most valuable targets-its oil export facilities and its war effort against Iraq B o hostages held by its terrorist surrogates in Lebanon stren them the radical faction Iran should be warned that the U.S. would strike not only at Iranian 2) Maintain the US Naval Presence in the Persian Gul Washington must fulfill its commitment to escort the reflagged K uwaiti tankers if it expects to be taken seriously by Iran, the Soviet Union, or the Gulf states. Abrogation of the U.S. commitment would encourage Iranian aggressiveness, enable Iran to drive a wedge between Iraq and the Gulf states, and increase the lik e lihood .of a total Iraman victory over Iraq. Such a victory would threaten the survival of Gulf regimes and present the U.S. with the more difficult prospect of blocking an Iranian ground threat to Kuwait and Saudi Arabia, rather than blunting Iranian thr eats at sea, where the U.S. enjoys a much greater margin of superiority.

By maintaining a naval presence in the Gulf the U.S. makes clear to the Iranians that their actions may have unfavorable consequences and that they can no longer enjoy a free ride in intimidating their neighbors. Given their dependence. on seaborne oil exports, the Iranians have much to lose in a naval confrontation with the U.S. and little to gain. lTheir speedboat attacks aFainst Kuwaiti shipping were designed to aid their war with I raq by reducing Kuwats support for Iraq. The last thing Teheran wants is to jeopardize its own war effort in a naval clash with the U.S. that it could not win Washington should make it clear that its naval forces are in the Gulf to protect U.S., not Iraqi , interests. The U.S. should maintain strict neutrality in the Iran-Iraq war as long as Iran refrains from direct attacks on U.S. warships and reflagged tankers. If Iran should provoke a confrontation with the U.S., then Washington should eliminate Irans n a val bases in the Gulf, mine Irans export facilities to choke off Irans oil exports, and if necessary, ahamstring .Irans: war effort by destroying its logistical infrastructure-munitions dumps, arms factories and supply routes 3) End the Iran-IraqWar. Wash i ngton should work to end the war before it spills over into the Arab Gulf states and disrupts the world oil market.. Because Iran will continue to prosecute the war so long as Khomeini lives, Washington must work to limit the intensity of the war and stri n g it out until the stubborn Ayatollah asses from the scene. This means pressing ahead with the much delayed proposal for a United Nations arms embargo and reinvigorating Operation, Staunch, which is aimed at blocking Iranian access to foreign arms supplie s . Washington also must make it clear that U.S. arms sales to Tehran were an aberration that will not be repeated until Iran has disavowed terrorism and ceased its subversion of pro Western states 4) Step Up Eoonomic Pressures. The U.S. should go beyond it s unilateral ban on Iranian oil imports and convince Irans European, and Japanese customers that buying Iranian oil subsidizes Iranian terrorism and the Iranian war effort, while prolonging a war that threatens the free flow of Persian Gulf oil. The Japane s e who claim to be looking for non-military ways to assist the U.S. in the Gulf, should be pressed to reduce significantly their purchases of Iranian oil by finding alternative oil suppliers wherever possible 5) Iagease contacts with the Iranian Opposition . The revolution has entrenched itself and crushed its opponents to the point that a counterrevolution or coup is highly unlikely in the foreseeable future, particularly as long as Ayatollah -9 Khomeini enforces solidarity within the regime. Washington can not afford to ignore the opposition, however as it did in 19

78. Although the Iranian opposition is weak and plagued by factional squabbles, it may be revitalized if the regime fails to address Iran's growing economic problems. The Tudeh, the Soviet-contro lled Iranian communist party has been crushed but must be monitored carefully, for it survived similar crackdowns by the Shah constitutional monarchy under the Shah's son, 27-year old Reza Pahlavi, are the most pro-Western but the least likely to come to p ower. They enjoy considerable finanaal and political support from exiled elites but have not built a mass following inside Iran. Former President Bani-Sadr, now living in France, is a spent force who is a tireless debater but a poor leader with few follow e rs. Former Prime Minister The splintered royalist groups, who push for the establishment of a Bakhtiar is corn romised by his association with the Shah .on one hand and his I failure to provi B e an alternative to Khomeini on the other Hybrid Ideology. Th e People's Mujahideen Organization (PMO probably the stroneest opposition group within Iran, also is the most anti-Western: Its hybrid Islarmc-Marxist ideology makes it an unlikely ally for the U.S as does its assassination campaign against U.S. military p ersonnel in Iran in the early 1970s.

Decimated by an abort ive uprising in the summer of 1981 and continued repression the PMO revamped its strategy to stress guerrilla operations in cooperation with Kurdish separatists. Although it recently launched a wave of guerrilla and terrorist operations, PMO fighters are b elittled as "tourists" by many anti-Khomeini Kurdish guerrillas because of their propensity to pose in battle dress for cameras manned by PMOS extremely active propaganda arm. The PMOS desperation is underscored by its acceptance of Iraqi patronage, a fac t that has destroyed its credibility in the eyes of many Iranians should not embrace any of them; this would be the kiss of death in Iranian politics.

Washington also should handle information passed along by the opposition with care.

As Saddam Hussein di scovered when he invaded Iran, intelligence provided by exile organizations often is self-serving wishful thinking and should be handled with care Washington should maintain discreet contact with all these organizations but LXING-TERM U.S. KKtCY TOWARD KH T -KJ3OMEINI IRAN I While U.S. leverage on Iran in the short term remains limited 'to disincentives over the long term Washington can offer Iran plausible incentives for moderating its aggressive forei n policy. The ultimate U.S. goal should be to establish a working export its revolution. This requires the emergence of an Iranian leadership that would accept "Islamic revolution in one- country Limited Goals Any initiative should be made cautiously, with limited goals and meager expectations. Care should be t aken not to let the Iranians overestimate the stren of their position. Khomeini has crowed that hostile powers have presente&emselves "meekly and humbly" and that "all the big nations are competing to establish relations with Iran."8 He reserved special s corn for the U.S relationship wit an Iran that disavows terrorism and ceases its violent attempts to 10 saying in 1985 It is clear that if we take one step toward the United States, they will take 100 steps in return."

In the future Washington must make it clear that the 'U.S. will not take any more steps toward reconciliation than Iran does. After all, Russian troops have occupied Iranian soil three times in this century. Iran may need American help to avert Soviet occupation in the future. The bottom lin e is that Iran needs the U.S more than the U.S. needs Iran carrots To help tame the Iranian revolution, Washington can offer the following cooperation Against the Met Union. American diplomatic pressure. was crucial in expellin6 Soviet occupying forces fro m northern-Iran in 1946 after Moscow violated its comrmtment to withdraw its forces at the conclusion of World War II.

WashinBton should let it be, known that it is willing to offer Iran insurance against Soviet intervention and serve as a strategic counte rweight to Soviet power in return for Iranian restraint. The concrete benefits of cooperation with the U.S. could be demonstrated by furnishing Tehran with political intelligence on communist activity within Iran and military intelligence on Soviet forces across Iran's Soviet and Afghan borders. Cooperative efforts to aid the Afghan resistance against Soviet occupation also could benefit both .countries Ehnomic Incentives After almost nine years of revolution and seven years of war, Iran's economy is limpi n g. While Ayatollah Khomeini;,has inspired revolutionary zeal that has distracted attention from festering economic problems Khomeini's successors eventually must rebuild Iran's economy if they hope to stay in power. Particularly urgent will be the postwar reconstruction of Iran's shattered oil industry. Iran recently has attempted to purchase at least 40 million worth of oilfield e uipment from U.S. companies. This is only the ti of that iceberg.9 The 50 billion.1 Iranian factories, idled by spare parts an d raw materials shortages require extensive injections of American technology and expertise to, resume operations. Washington could offer help in rebuilding Iran's postwh economy if Iran were to stop fomenting trouble throughout the Middle East cost of re m lding Iran's oil facilities has been estimated at P 40 billion to Support of Opposition Groups. Although they have no chance of coming,to power as long as Khomeini lends his prestige to the current government, opposition groups may exploit an extended per iod of economic chaos to undermine the regime.

Opposition groups are therefore likely to pose a growing threat that the regime cannot ignore. Washington should keep its options open with these groups to exert maximum leverage on Teheran. At some point the regime may be willing to make considerable concessions to prevent U.S. support for its exiled and internal 8. FBIS, South Asia, 'November 20, 1986 9. The Washington Posk September.17, 1987, p. 1 10. Ralph Ostrich US. Policy Initiatives in Post-Khomeini Ir a n: Toward a New Course in US.-Iranian Relations GfobuZ Affuiir, Fall 1987, p. 134 11 dissidents. Washington should rule out support of separatist groups such as the Kurds and Baluchis, however, unless Tehran falls under Soviet influence. The U.S should ma k e it clear that it supports Irans territorial integrity because a Balkanized Iran would facilitate Soviet penetration of the Persian Gulf CONCLUSION Iran is a pivotal geostrategic entity that the U.S. cannot afford to ignore. It is also an a ressive revol u tionary state that the U.S. cannot afford to appease. The Soviet hegemony over the Persian Gulf without abandoning the Arab Gulf states to Iranian hegemony An Iranian-American rapprochement is possible only if Iran halts its violent attem ts to export its revolution and.renounces the use of terrorism as This is unlikely as long as Ayatollah Khomeini stokes the fires of Irans challenge 5! or Washington is to reach a modus vivendi with Iran that will block an instrument o P foreign policy revolutionary zeal. Once Khomeini is gone, however, his successors are likely to be more amenable to compromise with the West, if only to maintain themselves in power by ameliorating Irans worsening economic predicament As the internal fires of Irans revolution subside, Iran s post-Khomeini leadership eventually may be persuaded to satisfy themselves with Islamic revolution in one country, especially if their attempts to foment revolution in other states are frustrated To speed the arrival of this day, the U.S. should focus on blocking the ambitions of Iranian radicals--not accomodating Iranian pragmatists within the ruling. regime: American attempts to reach out to the least hostile factions proved disastrous in 1979 and gained little at great cost in 1985- 1986 revolution. Wa shington should The U.S. should brandish both carrots and sticks patiently to tame the Iranian Establish contact with all contending Iranian factions inside the regime and in the opposition.

Boycott Iranian oil exports and press U.S. allies to follow suit until Iran disavows terrorism.

Maintain the U.S. naval presence in the Persian Gulf as long as Iran threatens the free flow of oil from Arab nonbelligerents.

Help Iran negotiate an end to its war with Iraq onterms that do not threaten other Gulf states.

Offer economic Sind technical assistance in. rebuilding Irans postwar economy, particularly its devastated oil industry, if Iran stops undermining the stability of pro-Westem states.

Offer to abstain from support of Iranian opposition and separatist groups in return for a curb on Iranian support of anti-Western terrorist and revolutionary groups 12 Offer cooperation' against Soviet military and subversive threats.

The U.S. should not be too ready to restore working relations with Iran because that will r educe American leverage, strengthen Iran's bargaining position and encourage the Iranians to overestimate their own importance. Washington should make it clear that while it can help save Iran from the Soviets, it cannot save Iranians from themselves As l ong as Iran remains unappreciative of the incentives that the U.S. offers to modi

Iran's revolutionary policies, Washington must continue patiently to apply firm disincentives All Heritage Foundation papers art? now available electronically to subscribers to the "NEXIS" on-line data rebieval service. The Heritage Foundation's Reptts (HFRPTS) can be found in the OMNI, Cum WTM, and GVT pup fires of the NEXIS libmy and in the GOVT and OM" pup files of the GOWMSlibmty James A. Phillips Senior Policy Analyst I