Courtesy Reuters

Ambitious Iran, Troubled Neighbors

A New Locus of Danger

EVENTS IN IRAN and its neighbors--Iraq, Saudi Arabia, Afghanistan, Central Asia, the Caucasus and Turkey--generated most of the Middle East's history in 1992. While the more northerly countries played in the shadows of the Soviet collapse, the southerly ones contended with the aftermath of Operation Desert Storm.

Violence and war characterized the year. Iran forcibly expelled residents of several Persian Gulf islets. Fighting continued in Iraq's Kurdish north and Shiite south, fracturing the country into three sections. Confrontation with the U.N.-mandated forces also continued, including U.S. air strikes just days before the change of presidents in Washington. The Najibullah regime in Kabul collapsed, exacerbating Afghanistan's civil war. Civil war in Tajikistan broke out, and fighting between Armenia and Azerbaijan took thousands of lives.

This turmoil spurred few responses from Washington. A generally passive Bush administration relegated much of foreign policy to the working level, while the policymakers (especially President Bush and Secretary of State James A. Baker) devoted their attention to domestic issues and the presidential campaign. As a result myriad Middle Eastern problems-oil supply and pricing, terrorism, drugs, refugees, arms proliferation-await decisions by the Clinton administration.

The Growing Iranian Threat

WITH IRAQ WEAKENED and under international sanctions, the principal threat to U.S. interests in the Persian Gulf region may in the future come from Iran.

In 1992 Iranians sent mixed signals regarding their intentions. Some signs suggest Tehran is prepared to drop the terrorism and belligerent rhetoric that have so isolated it. The most important indication of a moderating trend was the outcome of elections in spring 1992 for the Majlis (parliament). Less than a quarter of the candidates endorsed by the radical Islamic Clergy Association won. President Ali Akbar Hashemi Rafsanjani apparently had a mandate to bury revolutionary rhetoric and quietly to improve relations with Iran's neighbors and the West.

The deepening of economic reform provided a second sign of increased moderation. Rafsanjani abandoned the radicals' concept of Islamic economics, which consisted of

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