Iran in the 21st century Introduction

Iran is one of the ancient countries with 6 000 years uninterrupted written history. It is located in southwest Asia with an area of around 636,000 sq miles. It borders the Persian Gulf, Oman gulf in South, Caspian Sea, Azerbaijan and Turkmenistan in North, Afghanistan and Pakistan in East and turkey and Iraq in West. Irans population increased dramatically in the second part of 20th century and doubled after Islamic revolution and reached 70 million according to national census in 2006. However, Irans birth rate has dropped dramatically since decade ago and anticipated to continue to slow till reach 90 million by 2050. According to official data from national census more than two third of population are young and less than 30 which make Iran amongst the youngest countries in the world. The literacy rate stands well above 80 per cent (around 83 per cent) of which 90 per cent male and 77 per cent female. However, the literacy rate among younger generation (between 6 to 24) is around 93 per cent of which 97 per cent males and 96 per cent females in urban area, 93 per cent males and 83 per cent female in rural area. Also, numbers of women pursuing higher education have increased dramatically since Islamic revolution. By comparing the percentage of numbers female students enrolled in Iranian universities from 1978 to 2003, it can be seen that the percentage has been doubled from 31 per cent to 62 per cent. According to the CIA World Factbook Irans ethnic breakdown is as follow: Persians (51%), Azari (24%), Gilaki and Mazandarani (8%), Kurds (7%), Arabs (3%), Baluchi (2%), Lurs (2%), Turkmens (2%), Laks, Qashqai, Armenian, Persian Jews, Georgians, Assyrians, Circassians, Tats, Mandaeans, Gypsies, Brahuis, Hazara, Kazakhs and other only (1%). However, there are other estimates such as estimates by Library of Congress which are quite different from the above estimates. The official language of Iran is Farsi (Persian) but according to Assembly of Experts constitution use of local language in the press and mass media as well as for teaching their literature in school is permitted in addition to Farsi (Assembly of Expert). According to CIA World Factbook the estimates of different group of people who speak different language as their first language are as follow: Persian and Persian dialects are spoken by 58%, Azari 26%, Kurds 9%, Luri 2%, Baluchi 1%, Arabic 1% and around 3% have other language such as Armenian, Assyrians, Georgians. The official state religion is twelve Shia Muslim, which is about 89% of all Iranians belong to this branch of Islam. The biggest religion minority belong to other branch of Islam, Sunni Muslim, which is around 8% of all Iranians belong. The remaining 2% to 3% of Iranians belong to Non Muslim religion including Zoroastrians, Bahais, Jews, Christians, Yarsanis and Mandeans.

Iran entered the 21st century with the experience of two major revolutions, two World Wars and one national war in 20th century. The second revolution, called Islamic revolution, had major impact on Iran welfare both regionally and internationally, which Iran-Iraq eight war was the main consequence of that. But, now Iran in 21st century is facing different issues and problems that can have huge impact on its future. Domestic issues such as conflicts over national identity, ethnic minority, freedom of speech, democracy, human right, widening gap between poor and rich, high unemployment rate and distrusting oil revenue. Also, country is facing some major issues in its external affair both regionally and globally, issues such as dispute over countrys nuclear energy programme with the West. In this chapter, we try to look at the different factors that contribute to Iranian national culture such as ethnic minority, religion, education and social classes as well as influence of traditional bazaar culture to modern organisational culture in Iranian organisations.

Economic background
Iran has never lost its independence throughout its history, but foreign powers such as the United State and Great Britain influenced the countrys foreign and domestic policies, especially for the best part of twentieth century. The last economic dehiscence in Iran after being invaded and destroyed by Mongol, happened in Safavid period (1560- 1680). However, unfortunately those glorious days did not last for long. Economy state declined in the last 60 years of Safavid Dynasty which was accomplished with Safavid downfall. From the beginning of the19th century, due to the weakness of the central government, Russia and England from north and south respectively stated (intended) to put their hands on lands and interfere in political and economical affairs. Consequently, these two countries started to think of (or thinking of) finding a way in order to take advantage of the new and profitable market in Iran for their products and enjoy the opportunity of having access to cheap row materials for their fast growing industries. The only possible way of doing so was to destroy the local market and make it depend on their products and services. After Amir Kabir was murdered by Nasseredin shahs (the king) order in 1852, the darkest part of Iranian history commenced by giving preferences (allowances/benefits) to Russians and English. Some of those preferences were given to Russians were, providing phone line in north and northwest of Iran, making road and motorway in north, and also open the first Russian bank in 1890, most of which were given (granted) in order to make transportation easy for Russian businessmen to transit goods to Iran to compete with domestic goods. Furthermore, in order to gain more advantages for Russian businessmen the Russian bank started giving considerable loans to King and his relatives knowing the fact that they could not repay the loans back. Therefore, as a result of this, they forced the king to sign the contact with Russian government to give authority of having all profits (revenues) from customs, post, telecommunication and fishing in Caspian Sea. On the other hand, British required the

same privilege in south and south east, to facilitate the west and south of Iran with telecommunication (phone) line, to make roads and motorways in south through which they could be connected to India (their biggest colony) along side with establishing the Iranian Kings bank (1889) with the right of circulating currency notes, monopolistic right of selling and buying tobacco (1890) and the most important one was the right of oil discovery and exploitation in any part of Iran apart from north (1910). Having said that, however, having access to rich oil sources in Iran was far more significant for British government in which it was guaranteed that they would not ever (face) fuel shortage. British government kept this advantage, which was the biggest 20th century advantage for England as mentioned by politicians, up until 1979. After constitutional government was defeated, which accounted for signing a contract resulted in Iranian governments being a foreign portage, the state of people fighting entered to new period in order to redeem their honour and pride which was almost forgotten. Reza khans very first step after becoming king was to bring security and discipline back to all over the country. Thus, Reza khan needed to have a centralised and powerful army with Englands supervision to make sure they can provide the potential investors with enough security mainly the British ones. By doing so, new industries were emerged in Iran, which brought about an investment increase in these industries with respect to expanding (expansion of) Iranian market. This resulted in industrial countries rebuilding a new relationship with Iran (new capitalism and colonial) but not in a mutual respect, as a matter of fact its purpose was, principally, to control/(prevent it from turning into) it not to turn into a new industrial country in the region, as they believed Iran had this great potential. Industrial countries in that period did not only want to export ready goods but attempting to give their old equipment and machinery to developing countries to make them even more dependent as well as enjoying a large amount of profit in line with expanding the selling/sale market in these countries. Alternatively, offering some modern equipment or machinery, they could be granted to access cheaper row material and natural resources and on top of that they would make sure they were holding major share of that company. During the 1920s up until 1931 in Reza shah period, new industries expansion was much faster in Iran compared to other countries in that area. This development took place in distinct fields, all together 680 factories including oil-pressing (oil extraction), flour processing, electric mill (machine mill), cotton-gin(winnowing machine), cube sugar, coco cola, spinning and weaving (knitting), matches factory, soap manufacturing, publication technology, electricity and etc. The increase in foreign exchange and trade along side with producing agricultural products for international market export brought about remarkable changes in the cultivation method. Applying old-fashioned cultivation technology, worsened the lands productivity. According to law farmers had to give away a substantial proportion of the shares to lords (land owners). Although, Reza shah did not have an amicable relation with some land owners, they still claimed a noticeable amount of products from farmers. At the beginning, Reza shah tried to prove his support to farmers by confiscating some lands / taking some lands from well-known owners. However, they were all given to either his family or some loyal army officers and

most of the fertile lands in north of Iran belonged to/were kept to him as well as almost six thousands villages. Besides, the government continued to support land owners by granting them with noticeable amount of loans with low interests to relate industrial and business investments in order to make the best possible use of agricultural products and vice versa. When Dr Mosadegh became the prime minister (or head of the government) first England followed by USA, France, and Holland tried to put pressure on the government by sending their navies to Persian Golf in order to avoid/impede exporting Irans crud oil ( in order to avoid/impede Irans crude oil to be exported) (applying) economical sanction against Iran, blocking Iranian government bank accounts outside Iran, deterring any loan giving/given/granted to Iran by the world central bank, and etc to force the government to suspend nationalisation of oil industry in Iran. Consequently, government was left with no choice but rationing the necessary goods such as textile, sugar, medicine, transportation equipment, machinery, and etc for citizens. Moreover, government tried to limit and put more restriction on import and encourage businessmen to export by offering loan and tax exemption. Thus, as a result of sanction the national gold and exchange money back (support, cover) decrease dramatically. However, with all government efforts, it was still almost impossible to have economic evolution without crude oil income (revenue) (single product economy). After, coup-deta in 1953 and downfall of Mosadegh government, the new government put its all efforts on/in making good foundation to sign new oil contracts with European countries mostly with England. So many plans were to be made after coup-deta to ameliorate economic sections/activities; however, the only main advantage brought by this coup-deta was recommencement of exporting crud oil. This was followed by civilian and military help from USA which accounted for the Iranian economy being balanced. Form the beginning of 1960s after Shah land reform (agrarian reform) Irans economy circumstance critically changed with no bright future perspective for a while. Budget deficit, inflation, decrease of gold and foreign exchange, money reserve, increase of the government debt to central bank, and rising government foreign loan/debt put considerable pressure on the government facing critical financial problems despite significant earning from crude oil. After settlement of coup-deta government and deadlock of old economy /economic policies based on land owner- farmer, the new method, known as white revolution ,was introduced by Americans. With implementing Shah White revolution many joint cooperation (venture) like Iran National was established. Gradually, many different industrial fields with total support, direct government supervision and indirect foreign company interfere was brought to Iran. In order to financially support these companies (industries) one wide/broad bank network was established to help these dependent industries. Furthermore, communication and road network expanded in order to help and provide better service to local consuming market as well as supplying necessities for importing industries. In 1973 with crud oil price reaching its peak Irans oil revenue dramatically increased which brought about a considerable expansion in different industrial fields. Accordingly, Iran became the first destination for Americans and Europeans to import their products goods, row

materials, pieces, and machinery, and expert (skilful labour), therefore, gradually foreign trade played a very important role in two main directions in Irans economy. Foreign trades provided the opportunity of exporting million barrels of crud oil a day and importing ready goods and row materials with worth of billion dollars per year. Therefore, transportation network system adequately equipped to load and unload the products in ports. As a result of not adequately/sufficiently investing in Agriculture sector, import of foodstuffs and provender (forage, provisions) for herbivorous animal significantly augmented. By increasing Irans income form crud oil and being the gendarme in Persian Golf region, it was necessary to have a very powerful army. Thus, billions of billion dollars was annually spent on strengthening the army, training cost, purchasing modern arms, building camp for training, and infrastructure such as airport, road, and communication network. The priority of army cost had an adverse / negative effect on economy, and cultural investment. In this period Irans economy was so much depended, (in that even direct foreign interfere was unnecessary ) The interest of these multinational companies working in banking, army, business on one hand and their Iranian partner interests in other hand tied together which made them inseparable.

Irans economy after revolution

Irans economy according to the Islamic Republic of Iran constitution divides into three constituent parts: public, co-operative and private. The public sector includes all major and generative industries such as foreign trade, mining, banking, insurance, power generation, major water distribution networks, radio and television, telecom, airlines, shipping lines and railways. The co-operative sector includes companies, manufacturing and distributive organisations set up in towns and village on the basis of Islamic guidelines. The private sector includes those parts of agriculture, animal husbandry, industry, commerce and any other services that complement the economic activities of public and co-operative sectors. Since revolution, although the economy has remained capitalist, is run on a strict protectionist and statist model. Almost all industries and firms which normally would be managed and ruled by private sector in a large number of capitalist countries, are owned and managed by the sate in Iran. The government's share of the ownership in the economy is estimated around 80 per cent. In recent years, however, government has tried to reduce subsidies and price control over certain commodities and food products. The process of reducing government control is inevitably a slow one. In addition to that, in the early 1990 attempts were made to reform the economy and start a process of privatisation, but unfortunately the programme faltered. Yet again, by the end of 1990s with the election of reformist president, the question of privatisation was aired but could not take a practical shape.

After revolution the real structure of Iranian depended economy / depended Iranian economy revealed itself. Banks went almost bankrupted as a result of giving too much loans to people as well as a large amount of capital being diverted to other countries as many investors believed it would not be wise to keep their money in such an imbalance and unsafe country in terms of economy. Therefore, they sold their movable and immovable properties, resulted in many companies and their related industries closing down. In addition to this, the Iranian

new government was even more weakened by Americans and Europeans sanction. Consequently, the economy was suffering from problems caused by two sides/directions. From one side/hand, nobody wanted to buy oil from Iran anymore and therefore Irans oil income dropped from 18 billion dollars to 11 billion dollars a year. On the other hand, as a result of not having been distributed enough row materials, pieces, and machinery almost all depended industries closed down. Lack of goods made business investment active again.

Moreover, transferring investment from agriculture, industries, and property to services (mainly products distribution) and on top of that lacking real intention to amend the consuming culture structure along side with Iran-Iraq war pushed up prices to a higher level. The increasing prices trend proved that the dealership and brokering were more profitable and prosperous than any other businesses.

Particularly, in this sort of businesses it was very easy to escape from paying taxes as a result of inadequate / insufficient tax law. By transferring all investment from most of both large and small businesses to this sector, the distance between producing and importing goods regarding /considering the level of consumption increased dramatically and consequently the economy was affected by this. Nationalization of banks, insurance companies, and many big industries and also transferring ownership of industries, services, and agriculture form some famous investors to revolutionary organisations and National Industries Organisation (NIO) was influential but could not make big changes. Therefore, since it was almost impossible to change peoples consuming culture in short time and to maintain/ establish normal living conditions, government was forced to continue selling crud oil and continue importing ready goods.

Although, changes in crud oil policy and business structure were effective/practical, it could not make big changes in oil industries. After Iran-Iraq war finished, which totally destroyed Iranian economy (almost 95% of oil industries and infrastructures), the new policy of designing economy structure was taken into account. Like many other developing countries Irans protectionist policy is in part a reaction to political events.

With the big change in the world leadership after falling down of CCCP (Soviet Union) and also outcome of directing country in capitalist system (with respect to not succeeding in third world countries) new policy of balancing economy with privatisation economy, free currency exchange rate, open economy, getting loan from other countries, reduced subsidising, indirect decreasing of currency value, and fixing salary and wages followed since 1989. Although, relatively success gained by this policy as a result of huge import of goods (almost 50 billion dollar) in 1991 and 1992 which happened by borrowing 30 billion dollar worth loan from outside and also exporting crud oil, inflation increased aggressively since 1992 and reached

its top in 1994 (which was estimated 60 percent). As a result of inflation reached its highest level in 60 years, some economy policies should have balanced and looked over again. Controlling and stabilizing foreign exchange currency, and imports was the first move in order to repay back capital and interests of the loans were borrowed from other countries. Inflation was the main concern for government and although in the year 1989 reached its lowest level of under 10 percent, gradually from its min of 20 percent jumped to 50 percent between 1994 till 1995. Economist consequently predicted Iran would be suffering form high inflation for long time as governments budget structure, and constructive project were actually helping this situation. Many people moved to urban area such as Tehran, as a result of poor macro economics, and lack of government agricultural support. Therefore, consuming pattern (model) of exporting crude oil in order to import necessary goods and products were untouched.

Ethnic minority Since 1500 AD till 1900 Iran had never had a single city as its capital or centre of politics for some considerable length of time. The capital and political centre had changed with change of government or change of Dynasty, which they belong to one tribe or ethnic minority. For example, Safavid with Turkish root chose Aradabil and later Tabriz both in North- West of Iran with majority of Turkish ethnic minority. After falling of Safavid and starting of Afshar Dynasty Nader shah the founder of Afshar Dynasty, who himself were from Turkaman Afshar tribe, moved the capital to Mashhad in North-East of Iran. Karim khan, the founder of Zand Dynasty, he was from Lori tribe, changed the capital to Shiraz in South of Iran. Finally, Agha Mohammed khan, who were part of Turkish minority, surprisingly chose Tehran, an insignificant city at the time, as his capital in 1792 with keeping Tabriz as a city of Qajar Crown Princes city. The main impact of constant change of the capital city, which normally resulted in dramatic rise of political, social and economical status of the city, was the increase of population of that city at the time that city named as the capital. Moreover, apart from volunteer movement of people to new capital, there were also dislocation and force migration of some nomad tribal groups, ethnic or religious minorities close to the royal family to new capital. All these normally resulted in sudden and immediate changes on citys development and structure plan. Moreover, this force migration and resettlement of nomads had had

significant homogenizing effect in both ethnic and religious composition of the whole country in long term. For example, during Safavid Dynasty approximately 100,000 Turkic families forced to migrate as well as 20,000 Armenians and Georgians resettled in Isfahan. During very short period of Nader shah around 150,000 families migrated to Mashhad and cities around Mashhad. Zand Dynasty caused of migration of 40,000 families and tribes from their area to Shiraz. One may argue that resettlement and migration of families and tribes to other cities can create a cosmopolitan society, where people from different background and ethnic can interact with each other across socio-economics barriers. Therefore, that can increase the sense of neighbourliness, fidelity and allegiance. However, Iranian history would never forget the bloody of HeydariNematic between two communities. Although, it is worth noting that conflicts, even those bloody ones, never were about ethnic or religious background of any group. In the long history of Iran never happened one city or even village being disintegrated because of ethnic or even religious diversity. One can argue that the process of modernization in Iran compare to European society is rooted to the nature of modernization in two societies. The modernization process in European society is based on development of critical factors that are related to improvement of individual autonomy, whereas, in Iranian society the process is vis- versa. the modernization process in Iran normally achieved through bureaucrats and military officer who generally have their own interests involve. It is strongly believed that modernization and establishing the modern society in Iran has direct relation with low cultural diversity and high degree of ethnic homogeneity. On the other hand, existence of social classes in society alongside of the ethnic and linguistic diversity was rejected strongly.
Tabriz as the fourth largest city in Iran is located in east Azerbaijan province in northwest of Iran. Tabriz is considered as the capital city of the Irans biggest ethnic minority community, the Azerbaijani Turks. Majority of people live in Tabriz are Shia Muslim with some Armenian and Assyrians minority alongside. Tabriz had enjoyed to be known as capital if Iran several times during its long history of which the latest one goes back to Safavid Dynasty during 1501 and 1514. Although, during Qajar dynasty (1790-1925) insignificant city of Tehran became capita of Iran, Tabriz remained as residence of Iranian Crown province and played crucial role in Irans economy. Tabriz due to its location in northwest of Iran was always considered as the gateway for European and Russian economic penetration into Irans domestic economy and affair (page

44). The significance of Tabriz influence to Irans economy during Qajar dynasty, as the predominant commercial city, the countrys granary, and as the second politically important city, was so substantial that in fact functioned more effectively than Tehran.(page 44). Irans first printing house was established in Tabriz (1811) as well as first modern school (1888), first special school for deaf children (1924), first special school for blind children (1926), first kindergarten (1923), first public libraries and fist cinema (1900) were founded in Tabriz. Tabriz rug not only famous and expensive inside Iran but also has gained its reputation as the highly delicate handicraft art across the world. Tabriz also is the second industrial city in Iran hosting factories from varieties of industries such as vehicle, machinery, chemicals, petrochemical materials, refinery, cement, electrical, home appliance, textile, nutrition and dairy. The most important manufacturing complex in Tabriz is called Iran tractor Manufacturing complex. It produces not only tractor and tractors parts but also provides some automotive parts including forging and casting products for the biggest forging press in Middle-East with the capacity of 8000 tons (Keyhan financial paper).

Tohidi argues that the reason many Iranian including scholars are reluctant to acknowledge or even talk about ethnic minority and diversity of Iran can be from ignorance, prejudice, or chauvinism or most probably from the fear most Iranian have from political and armed movement for separatism like movement in Kurdistan and in some level Azerbaijan. Somehow the fear separatism among Iranian has been extended by intervention of foreign countries. For example in the past Russia and turkey always blamed by government as the main reason of ethnic tension in Iran, in fact Russia use ethnic tension to gain political concessions from central government. At present the USA always use the ethnic minority card against central government of Iran to put pressure to stop supporting militia groups in Lebanon and Palestine. As mentioned before, around 98 per cent of population of Iran are Muslim and only 2 per cent of population are Non-Muslim. However, Non Muslim Iranians have great socio-politically, economically, and culturally influence in Irans society.