August 1998, Week 2

Iran President Khatami meets convicted mayor

TEHRAN, Iran (Reuters) -- Former Tehran mayor Gholamhossein Karbaschi, given a five-year jail term in a controversial corruption trial last month, was shown on state-run television on Wednesday at a meeting with moderate President Mohammad Khatami. It was the first time that Karbaschi, a key moderate ally of the president, had appeared on television since he was sentenced to a hefty fine and a 20-year ban from public office as well as the jail term. Karbaschi, who is appealing against the conviction, was shown sitting next to Khatami, who addressed the founding members of the Kargozaran-e Sazandegi (Executives of Construction) party. The former mayor is the secretary-general of the party. "By reinforcing morality and respecting people's rights in supervising political activities, parties can avoid the corruption that comes with power," Khatami was quoted as saying. The television quoted him as saying that real heroes were those who served the people. Karbaschi's trial turned into a hotly contested legal and political issue between Iran's conservatives and moderates that brought into the open deep divisions between the two camps. The former mayor appealed against the court ruling on Tuesday. His supporters say it was a politically motivated act to deprive Khatami's reformist coalition of the mayor's powerful political and financial support. The judiciary denies any political motives. After the verdict was pronounced, Khatami had expressed hope that his government could continue to benefit from Karbaschi's services. The party -- and Karbaschi in particular -- angered Iran's conservatives by supporting Khatami in his landslide victory in May 1997 on a platform of social and political reform. The party played a crucial role in Khatami's election. Culture and Islamic Guidance Minister Ataollah Mohajerani, Central Bank Governor Mohsen Nourbakhsh and two vice-presidents are also members of the Kargozaran. The conservatives still control key levers of power such as the parliament, the judiciary and radio and television.

Khatami to head new economic reform body

TEHRAN, Iran (Reuters) -- Iranian President Mohammad Khatami will head a new task force charged with reforming the country's economic structure, Tehran radio said on Tuesday. The most important goals of the new body will be to reform Iran's foreign investment laws, tax collection system and national employment regulations, the radio said. The emphasis on foreign investment reforms will come as a relief to businessmen struggling to understand Iran's foreign investment guidelines and worrying about the security of potential investments. Economy and Finance Minister Hossein Namazi was quoted as saying the new group will work to coordinate the country's different ministries and economic bodies toward the common goal of economic restructuring. Khatami, who was elected last year on a broad mandate for social and political reform, has found his time increasingly occupied with economic concerns. Low oil prices, high inflation and high unemployment have battered the country's economy. Additionally, Khatami sees fundamental flaws in the country's "sick economic structure," as he routinely describes it. In a long-awaited economic address to the nation earlier this month, Khatami pledged new guarantees for foreign and local investors, accelerated privatization and a reduction in red tape. But his speech was short on details and offered little new in the way of immediate steps to boost the country from its economic doldrums. In past speeches, he has often called for a reduction in Iran's dependence on oil exports, a boost to the country's production base, and an improved climate for foreign investors. Income from oil exports make up 80 percent of hard currency earnings and 40 percent of national revenue.

U.S. isn't Iran's 'angel of salvation' - Nateq-Nouri

TEHRAN, Iran (Reuters) -- Iran's parliamentary speaker on Monday said the United States is not an "angel of salvation" that could cure Tehran's economic ills, the official news agency IRNA said. IRNA said Nateq-Nouri made his comments in response to some local media comments implying closer relations with Washingtion would be a panacea for Iran's current situation. "They (the press) want to pit the people against the government by introducing the U.S. as the angel of salvation," Nateq-Nouri was quoted as saying by IRNA. Several moderate newspapers have implied that improved ties with the United States could boost the country from its economic doldrums worsened by the sharp fall in the price of oil -- its main revenue earner -- to near 10-year lows. High inflation and high unemployment have also taken their toll. The conservative cleric, still an influential figure in Iranian politics despite his loss to moderate President Mohammad Khatami in last year's elections, said: "In what part of the world has the U.S. ever solved the problems of a nation?" Tehran residents closely monitor developments in relations with the United States given the widespread belief that a resumption of relations would be a big economic boost for Iran. Rumors of closer ties between the two nations have sparked rallies in Iran's battered currency on the illegal but active currency exchange market. "We don't yield to the bullying of the arrogant powers. The 'global arrogance' will, however, go on with its conspiracies against Iran," Nateq-Nouri was quoted as saying. "Global arrogance" is the term the Islamic republic uses to refer to major Western powers, particularly the United States. Conservatives, who still control key levers of power in Iran, have generally expressed opposition to a resumption of ties with the United States, citing its "hostile policies." Relations have warmed since Khatami's election. U.S. President Bill Clinton called for a "genuine reconciliation" with Iran last June. Washington broke relations with Iran after radical students seized the U.S. embassy in Tehran after the 1979 Islamic revolution and kept 52 Americans hostage for 444 days.

Iranian cleric urges support for economic plan

TEHRAN, Iran (Reuters) -- A senior cleric urged the Iranian people on Friday to support President Mohammad Khatami's economic reform program, which he said is firmly grounded in the laws of Islam. Ayatollah Mohammad Emami Kashani told the weekly Friday prayers at Tehran University that respect for the law and self-sacrifice are needed during troubled times. "The technical issues in the economic program are very complicated," Emami Kashani said in the portion of his sermon devoted to contemporary affairs. "In order to implement these matters society must respect the law and not be selfish so this work can be carried out more easily," he said. "The law comes from the people and our laws are based on Islam, but unfortunately some of us do not respect the law," said Emami Kashani, who is a key member of the authoritative Guardian Council. Last week Khatami, a moderate Shi'ite cleric, presented the broad outlines of his economic program. However, he said details of new policies would be released later. The president, elected on a broad platform of social and poltical renewal, has paid little public attention to Iran's faltering economy, making him vulnerable to conservative critics. Analysts said his program, which seeks to reconcile the demands of "social justice" and free-market reform, appeared contradictory and they are eagerly awaiting further details. Khatami pledged to maintain a social safety net, while privatizing state enterprises and reducing regulations. He also announced plans for increasing inward investment and expanding non-oil exports. Depressed oil prices have kept steady pressure on the Iranian economy, dominated by petroleum exports. On Thursday the Foreign Ministry said it is reducing the number and size of its overseas missions in a cost-cutting drive.

Ex-Tehran Mayor to File Appeal

TEHRAN, Iran (AP) -- The former mayor of Tehran, sentenced last month to five years in jail for corruption, will file an a ppeal this week, his lawyer was reported as saying Sunday. ``Nothing but acquittal is expected,'' said Bahman Keshavarz, lawyer of the deposed mayor, Gholamhossein Karbaschi, was qu oted by the official Islamic Republic News Agency as saying. Karbaschi, a key ally of moderate President Mohamamad Khatami, had been a target of the president's hard-line political ri vals and many Iranians say the trial was a political settling of scores. Last month, Karbaschi was found guilty of embezzlement during his eight-year term as Tehran's mayor and ordered to pay lar ge fines. During his trial, which lasted more than a month, Karbaschi acknowledged making mistakes, but denied stealing public money . Keshavarz said he would appeal by Thursday.