The following is a transcript of the meeting with Ramin Jahanbegloo, Head of the Department for Contemporary Studies, Cultural Research Bureau (Tehran).

The election of Mohammad Khatami as president of Iran in May 1997 produced considerable hope among the Iranian population and the outside world that the Islamic Republic was entering a period of reform and change. For many Khatami's landslide victory appeared as the beginning of a big transformation that would result in the establishment of a democratic Islam in Iran. This electoral victory was the result of a coalition of the centrist group of the Islamic Republic who created an organization in early 1996 called the Servants of Construction (mainly the protégés of Ali Akbar Hashemi Rafsanjani) and the Islamic leftists represented by the Mujahedeen of the Islamic Revolution Organization (symbolized by Behzad Nabavi and Mohsen Armin). These two groups were later joined by the Militant Clerics Association and the student Office for Consolidating Unity and formed all together a coalition called the Second of Khordad (the date of Khatami's victory).

Khatami campaigned in 1997 for a platform based on the rule of law and the expansion of civil society within the framework of velayat-e faqih (the rule of the Islamic jurist). His election shocked the conservatives and gave the reformers an opportunity to ease restrictions on books and newspapers and to improve Iran's relations with the West and the Arab neighboring countries. The call for greater openness transformed the political climate and pushed Iranian intellectuals, artists and civil rights movements to challenge the existing Islamic institutions.

The period of optimism did not last very long. The hardliners soon began to counterattack by using the vigilante groups and the security forces to assault the reformist leaders and to close down reformist newspapers. The Grand Ayatollah Hossein Ali Montazeri was placed under house arrest and corruption charges were filed against the mayor of Tehran, Gholam Hossein Karbaschi. In the summer 1998 the judiciary controlled by the Supreme Leader and close to the hardliners began to arrest writers and to close several of the outspoken newspapers.

Things took a more tragic turn in the autumn of 1998, when a group of intelligence officers headed by Saiid Emami murdered brutally four dissident intellectuals and the leader of the Iran Party, Daryush Furuhar and his wife. Saiid Emami was arrested on the order of Khatami, but he died mysteriously in prison in June 1999. The incident appeared as a cover-up of the true architects of the serial murders.

In July 1999, the pressure groups attacked a student dormitory injuring and arresting students who were protesting peacefully against the closure of the reformist newspaper Salam. As a result of this attack, (denounced by Khatami and his government), several days of protest demonstrations were organized by the Iranian students. These demonstrations were harshly repressed by the police and the vigilante groups, and around 1500 people were arrested. Khatami was forced to denounce the protestors and the Revolutionary Guard commanders threatened to carry out a coup if the situation was not back to normal. The July 1999 student riots represented the first great defeat of the reformist government of Khatami against the hardliners. It left Iran in a state of political tension and ideological polarization that has lasted for the past several years. The sweeping victory of the reformists in the parliamentary elections of February 2000 created new unrests and problems.

Ali Akbar Hashemi Rafsanjani's defeat in the parliamentary elections mainly due to the information revealed by some Islamic leftist journalists linking him to the serial murders of Iranian intellectuals made him to position himself to play a key role in a future administration and to set aside his own differences with Ayatollah Khamenei. As a result it became more and more difficult for Khatami, a twice -elected president, to prevail in a triangular power struggle with Khamenei, the supreme leader, and Rafsanjani, as head of the Expediency Council. Through their multiple efforts to block legislations hardliners showed that they could easily prevent the reformist parliament from carrying out meaningful reforms, rendering their popular support as a hollow power.

Since June 8, 2001, Khatami's reelection date, this general scenario has continued. The reformer's strategy of "active calm" and the decision to avoid provocative actions have frustrated many of their supporters and especially the Iran's restless youth. The crackdown on the reformist press has continued, with over sixty newspapers closed down and some fifty journalists, lawyers and journalists arrested, put on trial or sent into exile since August 2000.

Today very few of president Khatami's supporters still claim that his election in 1997 and his reelection in 2001 have created an irresistible momentum to their attempts to reform Iran's Shi'a theocracy. Apparently Khatami's weak efforts and the struggle inside the Iranian civil society has not persuaded the hardliners that change is inevitable and that resistance to change pits the regime against its citizens, increasing the risk of civil unrest. The hope that encouraging moderate conservatives to support a cautious process of reform will enable the current leaders to negotiate the institutional blockade set up by the establishment has completely dissipated. Most of the moderate conservatives have been loathing Khatami because his followers were secularists and intellectuals.

Yet, Khatami himself has lost all his support among the Iranian students and intellectuals. It is hard to escape the conclusion that the reformer's strategy of working within the political and constitutional structures of the Iranian regime has failed. Today most of the Iranian citizens seem to have lost totally their confidence in the reform process and its possible political victory.

According to Behrooz Geranpayeh, a reformist journalist who was accused of passing on information to foreign sources, around 60% of Iranians do not feel politically represented by the current political entities in Iran and more than 75% of the population are against the current degree of religious interference in politics. This full scale ideological failure and social fatigue has become so obvious that even some senior conservative figures such as Ayatollah Amini, deputy speaker of the Assembly of Experts warned that the Iranian society is approaching the point of explosion. Ayatollah Amini's comments were made during a Friday prayer in Qom on 24 May 2002.

"I swear," affirmed Ayatollah Amini, "that society is on the brink of explosion. If discontent increases, society and regime will be threatened." This statement reflects the degree of social unrest that Iranian society is going through and which will most probably lead to a new wave of protests and demonstrations. At this time, the ability of the conservatives and the moderates to work together is spite of their differences may have reached its limits. These domestic battles and political rivalries are taking place in a backdrop of inflation, growing unemployment among the youth, prostitution, drug addiction, fall of the living standards and the issue of relations with the United States. Khatami and his government have been forced to recognize the devastating social effects of years of economic mismanagement.

Iran today has at least two million drug addicts. Divorce rates have risen to levels higher than some Western countries. The country's overall debts amount to $30 billion. Fifty-five percent of Iran's population lives below the poverty line. The unemployment rate currently stands at 25 percent, while the official inflation rate stands at 13.5 percent (the true inflation rate is closer to 30 percent). As a result of an absence of a competitive environment, a lack of legal and political stability, distorted market structures (lack of private sector investment) and lack of transparency, more than 400,000 educated and middle-class Iranians have left the country in the last eight years looking for jobs in the West. This is to say that the Khatami government has not been able to reach foreign markets, to promote research structures and to improve social welfare in Iran.

As for the Iranian youngsters, their main concern today is to have jobs or to leave the country. Almost 70 percent of Iran's population of 67 million is younger than 30. Most of these youngsters are frustrated with Khatami and the reform movement and totally disenchanted with the Islamic revolution. Part of this young population is composed of students who have been staging freedom demonstrations and pro-reform protests for the past four years.

One of the consequences of the recent clashes between pro-reform students and the clerical establishment over the case of Hashem Aghajari, the professor charged with blasphemy is that student movements are now more popular among the population than the reformists inside the government. For the students, Khatami and his government cannot go beyond the point where they reached today. They believe that Khatami must resign because he has not been able to accommodate constitutional rule to the imperatives of a political-theological rule. A synthesis which seems impossible without bringing fundamental changes to the judicial structure of the Islamic Republic of Iran.

Therefore, the hardliners cannot allow progress beyond the point reached by the reform movement without risking the legitimacy of the regime itself. What is certain is that the reformists in Iran lost the game and hard-line conservative clerics are preparing for a takeover of power to save the Islamic regime from internal collapse. It seems certain now that Ayatollah Khamenei, the supreme leader, decided to reject controversial legislation championed by Khatami, and will face the consequences should Khatami resign. In case the president resigns and there were political unrest and a public backlash, the Revolutionary Guards and the Basij (paramilitary) appear to be ready to restore order. Hardliners hope Khatami's departure will finish the reform movement for which he has been the most prominent voice in 1997. Ayatollah Khamenei, however, has been resisting demands from extremists (such as the Motalefeh group represented by Asgar Oladi ) to impose a state of emergency, believing it neither necessary nor in the national interest.

This has also to do with the fact that none of the Iranian political factions want to see Iran isolated in the possibility of an eventual war between Iraq and the US. Khatami's government fears that if Iran continues to opt out of the U.S.-led talks on Iraq, it will be further isolated in the region.
Iran has repeatedly voiced its opposition to a U.S. invasion of Iraq, even though Iran continues to see Saddam as a dangerous enemy. In other words, as much as the Iranian regime may want to see a militarily-weakened Iraq without Saddam, the fact that the dominant power in post-Saddam Iraq will be likely the United States is a cause of worry for the Iranian leadership. Iran avoided involvement during the 1991 Persian Gulf War and showed a measure of cooperation during the most intense phase of the U.S. –led war to remove the Taliban regime.

It is interesting to see that although the U.S. broke diplomatic relations with Iran since 1979, it has been re-opening channels of communication to talk to the Iranian officials about Iraq. The American overtures come at a sensitive time for the Iranian regime. While cracking down on dissidents and students clamoring for a more open political system, the Iranian regime is highly nervous about the true intentions of the United States in the Middle East. Many among the Iranian population believe that the U.S. military action in Iraq is in fact intended to destabilize the Iranian regime. Yet, despite all these rumors and the "absence" of diplomatic ties between Tehran and Washington, formal encounters and even cooperation have been taken place on issues such as the future of Afghanistan, joint efforts to combat Al-Qaeda terrorists and the fight against the drug smugglers.

Iranian officials know that democratic developments in Iraq may send ripples across the border and create a series of civic rebellions inside Iran. For many analysts Iran seems quite ripe at the moment for a change, mainly due to the crisis of legitimacy that puts in danger the whole Islamic system.

On the other hand, military action is not out of question, especially if despite the international interventions, Iran gets closer to completing its nuclear reactors in Bushehr, Natanz and Arak. Washington, which is already protesting North Korea's and Iraq's alleged nuclear capabilities, has strongly urged Moscow to abandon the Bushehr project, saying that the Islamic Republic is working to develop weapons of mass destruction. Washington also questions why Iran, with its vast oil reserves, needs nuclear power. The Bushehr reactor-begun by West Germany but interrupted by the Islamic revolution-is due to come on line at the end of 2003. It is interesting to see that while worried about the capacity of Iranian reactors to produce enriched uranium or plutonium which are materials needed for nuclear weapons, Washington is not pushing Tehran very hard on this issue, because of the emergency of the Iraqi situation and because of keeping Moscow happy.

It is interesting to see that the informal polls in Iran and the U.S. have shown no strong opposition to resuming ties between the two countries, yet the hardliners in both countries have held back this process. Recently the Ayandeh Opinion Poll Institute headed by Abass Abdi (a former student leader in the takeover of U.S. embassy in Tehran) was accused of carrying out a research for the order of the Washington-based Gallup Organization. The polls claimed that most Iranians favored dialogue with the United States.

Yet, what is certain is that while the tensions increase between Iraq and the U.S., the American establishment is improving its relations with Iran hoping to liberalize the Iranian landscape in one way or another. The history of the Islamic revolution shows that when necessary even the most conservative among the hardliners in Iran understand a rapprochement with the United States is important. It was, after all, the Iranian hardliners who agreed to purchase arms from the hated America, at the height of the war against Iraq.

Most Iranian leaders know that, without better relations with the United States, they will face the growing prospects for a series of violent upheavals. Growing popular discontent may end up with spontaneous upheavals in such large cities as Tehran, Isfahan, Mashad and Tabriz-largely due to the crisis of legitimacy faced by the Iranian regime. Popular mobilization around this issue has led to a widespread and deeply felt yearning for greater democracy among the students and the youth at large.

And yet, in spite of the desire for change, relatively few Iranians favor violent confrontation with the regime for the time being. Therefore, it seems unlikely that a full-scale national popular uprising will take place in the next few months. This is also mainly due to the absence of a strong political alternative, unlike in 1978, when all social groups united behind one ideological banner. On the other hand, the Islamic Republic, unlike the Shah's regime, enjoys some support among a significant sector of the population, including most of the reformers who would prefer to defend the Islamic Republic than to loose their lives in the hands of a furious anti-Islamic mob.

That said, the political gridlock (symbolized by the failure of the reform movement), the growing dissatisfaction of the Iranian people and a crisis of legitimacy that is tearing into pieces the Iranian political establishment, suggest three possible scenarios for the near-term future. In the first, the hardliners try to stop the reform movement and the pro-democratic student movement by mounting a coup against Khatami and the reformist parliament. In the second, a series of civic rebellions against the regime (as they have happened in the past ten years) could lead to a takeover by the elements of the security services acting in league with organized criminal gangs.

In the third scenario, which is the most probable, the Servants of Construction headed by Ali Akbar Hashemi Rafsanjani will come to power and reestablish diplomatic relations between Iran and the U.S. and will try to revitalize Iran's sluggish economy with neo-liberal structural adjustment measures. They will continue to be close to the conservatives. By all chances, the next strong candidate for presidency is Ali Larijani, currently director of the Iranian T.V., whose brother, Javad Larijani (a former member of parliament), could play an important role in future talks with American officials. Larijani, unlike Atoallah Mohajerani (who has no political future in Iran), is the only candidate who is approved both by the Rafsanjani camp and the camp of the supreme leader.

Today, reestablishing diplomatic relations with the United States is no more unthinkable in Tehran. Iranian officials, while objecting to "U.S. threats" against Iran, have made it clear that they are ready to open a dialogue with America. However, one thing is clear: any statements calling for the overthrow of the Islamic regime in Iran will constrain the moderate and the centrist elements to distance themselves from the U.S. This is to say that all political factions in the Islamic Republic are first and foremost interested in safeguarding the regime. Even at some point the realistic factions are successful in creating a more rule-based Iran, such a country will still be an "Islamic Republic".

In terms of the final point, and perhaps above all, Rafsanjani and his centrist-technocratic forces will have difficult days ahead, particularly if the internal consensus which has allowed the Iranian regime to survive until now is coming to an end. The main goal of this centrist-technocratic coalition over the next few months will be to undermine the power position of their most serious opponents by following a Chinese model of transformation. Yet, this can only delay, not resolve, the growing crisis of legitimacy the country faces today.