UACA Friends Society

and encourage the government and business sectors to embrace it as a

vehicle to achieve economic prosperity and security within a controlled,

orderly society. The PRC has enacted a stimulus package that allows

money to be directly allocated to research and infrastructure projects --

notably nuclear power plants, high speed rail lines, freeways and

secondary transportation grids.

By implementing a modified version of Chinese capitalism, the Iranian government could capitalize on the growing disillusionment among its citizens. After the recent bout of dissent and rioting in Tehran, the leadership recognized that their government could only maintain power and control with the active support of the middle class. Mousavi and other political leaders are aware that some elements of Western business offer opportunities for the Iranian people -- in contrast with the Iranian Mullahs who fail to acknowledge anything of

value from the West. At the same time, however, the Iranian Mullahs have

been actively using Iran's oil revenues to fund terrorism, religious battles

as well as large purchases of military hardware and nuclear technologies.

Unlike Iran, the People's Republic of China has become a major economic

player in the world community because, among other things, it does not

have a regressive religious element that influences all aspects of society.

While the Chinese and Iranian governments have traditionally been

suspicious of the West, Chinese religions such as Confucianism and

Daoism encourage active planning, pragmatism and self-reliance.

China’s leadership views Iran as a country that may well wield significant

economic and military power in Southwest Asia over the next few decades.

In July 2009, Iran invited Chinese companies to participate in a $47.8 billion

project to build seven oil refineries and a 1019 mile trans-Iranian pipeline.

In August 2009, Tehran and Beijing struck a deal for $3 billion to help pave

the way for China to expand two or more oil refineries.

Petroleum to develop the South Pars natural gas field in Iran, Beijing is

estimated to have committed $120 billion for Iranian gas and oil projects to

offset its own shortages in that arena.

In Iran, by contrast, theology is often the initial and predominant focus, and

is frequently measured by whether a given policy is in conflict with Islamic

religious teachings. Every new idea, concept and technology must be

filtered through that religious prism. This has resulted in a stagnating

economy with high unemployment and underemployment, which has in

turn precipitated a cauldron of unrest among Iranian students, intellectuals

and its middle class. Mousavi recognized this, and has encouraged a

modest form of liberalization that could bolster economic and political

stability. However, the strong opposition to his program by Iranian Mullahs

-- based in theology and fear -- has raised concerns that the tenets of

Islamic law would be compromised.

At one point, Mahmud Ahmadinejad seemed to be lending support to an

IAEA proposal to ship 2560 pounds of uranium abroad to France and

Russia by the end of the year to be refined for civilian purposes as part a

medical reactor in Tehran. Subsequently, Ahmadinejad treated this

proposal as a victory for Iran. He claimed that the West had changed its

policy from “confrontation to cooperation as a result of Iran’s resistance to

the United States and its allies.” That said, as soon as the proposal was

reviewed by Iran’s Mullahs, it was decided that Ahmadinejad would reject

the deal to ship uranium out of the country. This was confirmed by Saeed

Jalili, Iran’s chief nuclear negotiator, in a phone conversation with Javier

Solana -- Secretary General of both the Council of the European Union (EU)

and the Western European Union (WEU). Unfortunately, Iran’s leaders

rejected holding a meeting in Vienna to restart those negotiations.

The Mullahs would have viewed any attempt by the West to stop Iran’s

nuclear program as a violation of the basic tenets of Islamic law. They

believe it is an inalienable right of an Islamic state to pursue its own course

of affairs without any interference from non-Islamic countries. Moreover,

Iran’s leadership does not believe that their country would be treated as an

equal partner because the Western countries do not respect Iran’s political,

economic and security interests.

Moreover, the Mullahs believe that the tenets of Islam dictate that Iran must

neither compromise nor cooperate with the United States, Europe or Israel

-- all of whom refuse to adopt Islam as the official religion and submit to

are deemed to be hostile and subversive.

Many Iranians assume or believe that former strongman Akbar Hashemi

Rafsanjani was the first to recognize the efficacy of the Chinese economic

model. While not highly publicized, Rafsanjani’s initiation of trade

agreements and technical exchanges had a positive economic impact.

This was evidenced by the construction of Tehran’s major subway, which

was built by China International Trust and Investment Company (CITIC) -- a

major engineering and investment firm. After CITIC won the bid and built

the subway, Iran now successfully transports 700,000 passengers a day.

Tehran saw that the Chinese economic system of modified capitalism

could provide similar high tech and advanced infrastructure development

projects. This stands in marked contrast to the efforts of other socialist

governments that have attempted to do business in and with Iran.

Iran’s oil and natural resources would lead to tremendous wealth and

prosperity for the Iranian people under a Chinese system of modified

capitalism. Mousavi and Rafsanjani believe that China would provide a

security buffer against Russia, which has always coveted Iran’s valuable

natural resources. They appear to have now joined forces against Supreme

Leader Ayatollah Ali Khamenei and President Ahmadinejad in opposition to

the belief that Islamic theocracy is the final arbiter of economic and global

policies.

By allowing hard-line conservative theology to dominate the political

process, the Mullahs have retarded the development of Iran’s economy and

self-sufficiency. Moreover, it has damaged Iran’s opportunity to follow

China’s successful experiment with capitalism.

Moreover, President Ahmadinejad has deeply alienated both reformist and

conservative political leaders since his disputed re-election. He has tried to

consolidate power and marginalize his rivals. That said, neither faction is

willing to see him take credit for brokering a potential nuclear deal with the

West.

How will Ahmadinejad and his government manage their relationships with

Asia (notably China), Europe and the United States? Will increased

dissent, rallies in Iran sponsored by the growing pro-democracy

movement, and pressure from the western countries establish, encourage

and maintain more democratic practices? And how will the Chinese

government and the western countries look upon Iran -- as a growing

partner, a key player in the energy and technology arenas, or as a potential

pariah state?

Ironically, it is worth noting that if Mr. Mousavi had been allowed to

maintain his position and influence in Iran’s government, his

understanding of Chinese style capitalism -- combined with Iran's natural

resources and strategic geo-political location -- might have already begun

to make Iran a more formidable economic and strategic power.