ANALYSIS-Even landslide doesn't guarantee Khatami power

By Paul Taylor

TEHRAN, June 9 (Reuters) - Even winning re-election by a landslide does
not guarantee Iranian President Mohammad Khatami sufficient power to
implement his liberal reform programme.

But it may convince Iran's supreme leader, Ayatollah Ali Khamenei, that
cooperating more with Khatami is the only way to stabilise the Islamic
Republic and avoid a confrontation that the clerical establishment could
not be sure of winning.

The sheer scale of Khatami's victory in Friday's vote stunned both
supporters and hardline clerical opponents.

It gave the lie to pre-election talk of apathy and disenchantment, showing
that highly politicised Iranian voters are hungry for more freedom and
still trust the smiling cleric to deliver progress despite setbacks he has
endured.

But when the euphoria of his second overwhelming triumph subsides, Khatami
will face the same entrenched resistance to change from conservatives who
see political and economic reform endangering the Islamic system and their
own interests.

Furthermore, the 57-year-old, second-term president may encounter as many
problems from his own impatient supporters as from religious rightists who
still hold many levers of power.

"I don't think he wanted such a tremendous mandate. We should not forget
there will be people who feel threatened by this and who are going to want to
protect their interests," said Siamak Namazi, an analyst at business consultants Atieh Bahar. "This creates a sense of euphoria that Khatami tried to avoid with a deliberately sober, boring campaign."

FIRST TEST
Khatami will have to cool his supporters' ardour while he negotiates the
complex checks and balances in Iran's multi-layered system of government.
A first test could come within days when the unelected Guardian Council of
12 clerics and Islamic lawyers must validate the result. A council
spokesman has already spoken of "numerous irregularities", denied by the
reformist-held interior ministry which ran the election. Some analysts saw
the comment as the prelude to a lengthy battle to annul millions of votes.
A similar move by the Guardian Council after last year's parliamentary
elections, in which reformers scored a sweeping victory, was the first
sign of a conservative crackdown on reformist newspapers and intellectuals.
Pessimists fear there will be more arrests and show trials of reformers
before Khatami can use his influence with Khamenei to rein in a judiciary
still dominated by hardline clerics.

"It is still going to be bumpy and slow...I expect the same cat and mouse
game as before," said Hadi Semati, a Tehran University political scientist
close to the reformers.

The president last week condemned the broadcasting of "confessions" by
dissidents and vowed to speak out more clearly than in the past when human
rights were violated.

But his bully pulpit does not give him control over revolutionary and
special courts outside the state legal system. Judicial reform will be
slow. But optimists among Iran's reformers say they already detect signs
of some softening among hardline judges in response to public opinion.
Another test will be whether Khatami appoints a government of outright
reformers or whether he is forced by Khamenei, or driven by his own
caution, to name some moderate conservatives.

Vigilantes who are believed to take their orders from a hard core of
clerics who reject democracy, may try to provoke radical students into
street clashes, as happened briefly in July 1999.

Khatami has constantly urged patience and moderation on his followers,
especially the young. Aides hope the scale of his victory will convince
the impatient he has the public's trust.

MORE RADICAL GOVERNMENT?
Many of the president's supporters want a more radical reforming
government, including women ministers for the first time and
representatives of Iran's ethnic minorities.

Khatami told his only news conference of the campaign that he intended to
give higher priority to structural economic reform, although he often
displays little interest in economics.

Many analysts and insiders expect him to appoint a more effective economic
team, drawing heavily on the centrist Executives of Construction party
which advocates privatisation and opening Iran up to global trade and
market forces.

With some 700,000 young people entering the labour market each year and
unemployment at least 15 percent already, Iran urgently needs productive
investment to create jobs.

But liberalisation could clash both with the left wing of Khatami's reform
coalition, which takes a statist, socialist view of economics, and with
the vested interests of hardliners in opaque foundations that control
swathes of the economy.

"Mr Khatami's lack of interest in economics is a blessing, because it lets
the government be more laisser faire. I consider him to be of the
pragmatic new left, perhaps more like (British Prime Minister) Tony Blair,
and away from the old ideololgy," said Heydar Pourian, editor of Iran
Economics magazine.

A clear legal framework for business and curbing corruption are
prerequisites for attracting investment or persuading some of the 1.5
million Iranian expatriates to send their money home.
But Khatami risks running foul of so-called "aghazadeh-ha" (Daddy's boys)
-- families of ruling clerics who have profited from crony privatisations
and built old-school-turban networks in ministries, the judiciary and
revolutionary foundations.

MORE INTERNATIONAL LEGITIMACY
Analysts said Khatami's giant victory should give him greater
international legitimacy and could help change Iran's enduring image as a
"rogue state" in the United States.

"This is a great challenge to U.S. policy which is based on the assumption
that Iran is an abnormal country and so should be sanctioned, while it's
the most normal country in the Middle East," said Kazem Sajjadpour,
director-general of the Foreign Ministry's Institute for Political and
International Studies.

Restoring diplomatic ties with Egypt may be a next milestone in Khatami's
policy of detente with former regional adversaries.

But domestic politics on both sides is likely to slow the development of
relations with the United States. Regardless of the election, Congress is
about to renew sanctions on foreign oil firms that invest in Iran and
Libya, perhaps for "only" two years rather than the five sought by
Washington's Israel lobby.

Iran's leaders are bound to regard such a move as hostile and as proof
that it is the United States, and not Iran, which needs to change policy
before there can be any rapprochement.

© 2003 All Rights Reserved. Atieh Bahar Consulting.