Background,
Known as Persia until 1935, Iran became an Islamic republic in 1979 after the ruling monarchy was overthrown and Shah Mohammad Reza PAHLAVI 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 - a popularly elected 86-member body of clerics. US-Iranian 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, UN, and EU economic sanctions and export controls because of its continued involvement in terrorism and its nuclear weapons ambitions. Following the election of reformer Hojjat ol-Eslam Mohammad KHATAMI as president in 1997 and a reformist Majles (legislature) in 2000, a campaign to foster political reform in response to popular dissatisfaction was initiated. The movement floundered as conservative politicians, through the control of unelected institutions, prevented reform measures from being enacted and increased repressive measures. 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 hardliner Mahmud AHMADI-NEJAD as president. His controversial reelection in June 2009 sparked nationwide protests over allegations of electoral fraud. The UN Security Council has passed a number of resolutions (1696 in July 2006, 1737 in December 2006, 1747 in March 2007, 1803 in March 2008, and 1835 in September 2008) calling for Iran to suspend its uranium enrichment and reprocessing activities and comply with its IAEA obligations and responsibilities. Resolutions 1737, 1477, and 1803 subject a number of Iranian individuals and entities involved in Iran's nuclear and ballistic missile programs to sanctions. Additionally, several Iranian entities are subject to US sanctions under Executive Order 13382 designations for proliferation activities and EO 13224 designations for support of terrorism.
Area,
total: 1,648,195 sq km
country comparison to the world: 18
land: 1,531,595 sq km
water: 116,600 sq km
Economy,
Iran's economy is marked by an inefficient state sector, reliance on the oil sector, which provides the majority of government revenues, and statist policies, which create major distortions throughout the system. Most economic activity is controlled by the state. Private sector activity is typically limited to small-scale workshops, farming, and services. Price controls, subsidies, and other rigidities weigh down the economy, undermining the potential for private-sector-led growth. Significant informal market activity flourishes. The legislature recently passed President Mahmud AHMADI-NEJAD's bill to reduce subsidies, particularly on food and energy. The bill would phase out subsidies - which benefit Iran's upper and middle classes the most - over three to five years and replace them with cash payments to Iran's lower classes. This is the most extensive economic reform since the government elevated gasoline rationing in 2007. However, previous government-led efforts to reform subsidies - such as in the 1990s under former president Hashemi RAFSANJANI - were met with stiff resistance and violent protests. High oil prices in recent years allowed Iran to greatly increase its export earnings and amass nearly $100 billion in foreign exchange reserves. But with Iran's oil export price from March to December 2009 averaging just $55 per barrel and with a slight decline in oil production over the past four years, the Iranian government is facing budget constraints. Tehran formulated its 2009 budget to anticipate lower oil prices and has reduced some spending. Although inflation has fallen substantially because of lower oil prices, Iran continues to suffer from double-digit unemployment and underemployment. Underemployment among Iran's educated youth has convinced many to seek jobs overseas, resulting in a significant "brain drain."
Disputes,
Iran protests Afghanistan's limiting flow of dammed tributaries to the Helmand River in periods of drought; Iraq's lack of a maritime boundary with Iran prompts jurisdiction disputes beyond the mouth of the Shatt al Arab in the Persian Gulf; Iran and UAE dispute Tunb Islands and Abu Musa Island, which are occupied by Iran; Iran stands alone among littoral states in insisting upon a division of the Caspian Sea into five equal sectors
