Iran: Officials Debate Rate Cuts To Curb Inflation

May 23, 2007 (RFE/RL) -- Iran's current five-year development plan foresees a gradual cut in key interest rates to 10 percent or less by 2010.

A rate reduction is viewed in some government circles as a desirable end in itself, given Islam's prohibition on usury and related practices; they also see it as a means of curbing inflation. But others argue that progress against inflation should precede any interest-rate cut.

Iranian inflation is currently estimated at between 13 and 24 percent, depending on the source. The state-capped lending rate for banks is 14 percent, although private banks can charge significantly higher (17 to 19 percent) borrowing rates for technical reasons.

The 14-percent rate is equivalent to Iran's base rate, and there is presumably a range of rates pertaining to various loans or interests on deposits. A legislator and member of the parliamentary Plan and Budget Committee, Hasan Seidabadi, spoke on April 22 of 30-percent interest rates on loans.

Financial Divide

Proponents and opponents of interest-rate cuts broadly disagree over how rates can impact inflation, which officials want to curb. Those who believe higher rates can help curb inflation -- and they have recently come to include members of the Money and Credit Council, a body affiliated with the Central Bank -- have opposed a cut this year. Backers of annual cuts have cited the need to rigidly abide by the stipulations of the development plan and a related law (the Law to Rationalize Bank Profit Rates), which call for a decrease in rates of roughly 2 percent a year. Under that model, interest rates are regarded as "bank profits."

Broadly speaking, proponents of interest-rate cuts are those with an enduring faith in state economic planning. Their opponents, on the other hand, are more inclined to look to market mechanisms. The government appears to lie somewhere in between. In principle, it supports rate cuts; but it appears reluctant to impose them in the face of inflation of above 13 percent.

Mohammad Khosh-Chehreh, a member of parliament's Economic Committee, on April 22 described the government as "stuck" in its implementation of annual interest-rate reductions, Fars News Agency reported. He said the Money and Credit Council's April 21 decision, not to recommend a rate cut from 14 percent in the Persian year to March 2008, revealed inflationary concerns within the government. The head of the parliamentary Economic Committee, Mohammad Shahi-Arablu, said less than a week later that the government is obliged to implement laws on rate cuts and that avoiding an interest-rate cut this year simply forces greater rate cut the following year, Aftab news agency reported.

The Cons...

Opponents of rate cuts have warned that reducing rates to below inflation could deprive banks of precious resources, as major investors seek higher returns elsewhere.

Gholamreza Mesbahi-Moqaddam, a member of the Money and Credit Council, told ISNA on April 22 that rates could not be cut when the inflation rate had evidently risen in the year to March 2007. A former parliamentarian, Ahmad Meidari, cautioned (on April 28) that cutting rates would lead institutional investors to keep fewer assets with banks and instead channel them into areas like the real-estate market ("Aftab-i Yazd" reported the next day). That, he said, could fuel a rise in the cost of housing. Meidari added that there were already signs that major companies, like insurers, had begun diverting resources into the real-estate sector.

...And Pros

Supporters of interest-rate cuts argue that the reduced cost of borrowing will reduce production costs, bringing consumer benefits.

Parliamentarian Mohammad Shahi-Arablu claimed to Mehr agency on April 22 that reducing rates "has had positive effects on investment and increasing non-oil exports in the past two years." He said lower rates had led to an increase in demand for loans and financing, which he said had prompted banks to prepare themselves to provide financing. On April 28, he dismissed banks' concerns at financial losses. He said banks had warned they would go bankrupt when the 2004-05 law on bank rates was ratified, but they were evidently still in business, while rates had dropped from 24 percent then to 14 percent. Iran's Labor Minister Muhammad Jahromi told Mehr agency on May 21 that production and employment would increase proportionately with falling rates.

The proponents of cuts seem at times to regard the cost of money as the only factor impeding Iranians from investing. They appear to ignore the possibility that factors like uncertainty, policy, distrust of state bodies, or a reluctance to become involved with red tape or complicated taxes might also play a role. Distrust is arguably a discernible factor in the economic choices of many who lived through Iran's 1979 revolution -- which led to the confiscation of many estates, homes, and businesses. Iranians appear to favor liquid assets -- cash deposits, informal loans to acquaintances, gold coins, dollar or euro notes, apartments -- more than their counterparts in more developed states. A key element that is arguably absent in Iran is a systematic trust in the financial and legal system that permits "abstract" investments with deferred returns.

Tehran-based economist and lecturer Mohammad Qoli Yusefi said in April that interest rates were not a decisive factor in Iran, because bank loans were only available to those with connections to the state economic or political apparatus, according to ILNA. Yusefi warned that Iran's banking system and money market had become "a political instrument." He said Iranians kept their savings in banks despite relatively high inflation because they had few alternatives and believed Tehran's stock market to be too volatile.

Slow To Decide?

The reformist daily "Etemad-i Melli" commented on May 21 that "prolonging economic decisions have slowly become a habit for the government." The paper said the perceived trend was causing "confusion among the public and many officials." It compared the issue to another thorny economic problem with which the government has been struggling: how much to charge drivers for gasoline. A new two-tier pricing system for gasoline that was due to start on May 22 has been postponed over apparent technical glitches and the government's failure to set those prices.

The latest news concerning the interest-rate debate suggests Iranian public discord that is not uncommon when it comes to state decisions. Finance Minister Davud Danesh-Jafari said on May 20 that there would be no cuts for the time being, ISNA reported. "Etemad-i Melli" quoted a deputy head of the central bank, Akbar Komeijani, as saying the same day that the issue would have to be examined for another six months. But two days later, government spokesman Gholamhussein Elham announced a presidential decision to cut interest rates for all banks to 12 percent this year, according to Fars.

President Mahmud Ahmadinejad's government can appear as indecisive when it comes to economics as it is bold and fiery in its statements regarding foreign policy.

At the moment, the potential costs of that indecision -- and indeed the boldness -- might appear affordable in large part due to the billions of petrodollars that are flowing into the Iranian treasury.

Washington Denies Iran's Accusations Against U.S.-Based Scholar

May 23, 2007 (RFE/RL) -- The United States has dismissed Iranian accusations that a detained American-Iranian scholar was trying to undermine the Islamic state.

Haleh Esfandiari, director of the Washington-based Woodrow Wilson Institute's Middle East program (and who is not related to the author of this report), was detained in Tehran on May 8 and has been accused of security crimes.

Washington's reaction followed a May 21 statement by Iran's Intelligence Ministry that accused Esfandiari of links to a U.S.-funded drive to topple Iran's Islamic establishment.

The ministry said the Wilson Institute's Iran-related activities are supported by the Soros Foundation, which it said had played a "key role" in the so-called color revolutions in former Soviet states.

The ministry also claimed that the 67-year-old Esfandiari has said in preliminary interrogations that the Soros Foundation has established an unofficial network in Iran whose main objective is "overthrowing" the Iranian government.

'Utter Nonsense'

On May 22, U.S. State Department spokesman Sean McCormack dismissed the Iranian accusations against Esfandiari. He also said she is no threat to the Iranian government.

"Whether or not the Iranian government actually follows through with these charges or not, they're just utter nonsense," McCormack said.

The Woodrow Wilson Institute has also denied Iranian suggestions that Esfandiari has been involved in efforts to promote a "soft revolution" in Iran.

Also on May 22, Wilson Center Director Lee Hamilton called on Iran to release the Iranian-American scholar.

"The Wilson Center's plea to the Iranian government is simple: Let Haleh go. Let her return to her husband, her family, and her work," Hamilton said.

Iran has said that the United States should not meddle in the detention of Esfandiari.

Iranian officials have said that the scholar -- who holds Iranian and U.S. citizenship -- will be treated based on Iranian laws. Iran does not recognize dual citizenship.

Nearly Incommunicado

Iranian officials have also prevented Esfandiari's relatives and chosen lawyers from meeting her. She has reportedly only been allowed to make brief evening phone calls to her 93-year-old mother in Iran.

Abdolfatah Soltani -- a member of the legal team that intends along with Iranian Nobel Peace Prize winner Shirin Ebadi to defend Esfandiari -- told Radio Farda that judiciary authorities have so far denied them access.

"[The judge] told us, 'I've spoken to her, she didn't say she wanted a lawyer,'" Soltani said. "But we said that she had called her 93-year-old mother and told her she wants to have a lawyer. It was clear that, despite the laws, they aren't allowing Haleh Esfandiari to have a lawyer. We have practically no information about [Esfandiari's] fate."

Bizarre Circumstances

Esfandiari had been visiting her mother -- as she had done in previous years -- when her nightmare began.

When she was about to leave Iran in December, her American and Iranian passports were stolen. Authorities did not issue her a new passport, and instead a series of lengthy interrogations by security officials began. Finally she was taken to Evin prison, where she has been jailed for the past two weeks.

Several U.S. politicians, academics, and rights groups have called for her release. Many have praised her work and described her as a voice for tolerance and peace and an advocate for equal rights for women. They have also said that she has been active in promoting mutual understanding.

About 100 Middle East scholars and experts on Iran have, in a joint statement, described her arrest as the latest "distressing episode" in an ongoing crackdown by Iran's government against those who strive to bolster the foundations of civil society and promote human rights in Iran.

Other Cases

Esfandiari's arrest comes amid heightened tensions between Iran and the United States. It also comes as human rights advocates and activists in Iran face an apparent crackdown.

Esfandiari is not the only Iranian-American to have been prevented from leaving Iran in recent months. Iranian authorities have confiscated the passport of Radio Farda broadcaster Parnaz Azima and refused to return it even though Azima and her family have posted a bail bond worth approximately $440,000.

"The Washington Post" today reports that Iran has also imprisoned a consultant for philanthropist George Soros's Open Society Institute programs.

According to the report, Kian Tajbakhsh was picked up around May 11. He had reportedly worked with the Open Society Institute in Iran since 2004 and has also done some work for the World Bank.

On his website, decentralization, democracy, and urban local governance in Iran are listed among his key research areas.

It is unclear whether there is any alleged connection between Tajbakhsh's and Esfandiari's cases, on one hand, and the Intelligence Ministry's recent statement accusing the Soros Foundation of involvement in attempts to topple the Iranian government.

The Iranian Intelligence Ministry said in its May 21 statement that the head and representative of the U.S.-based Soros Foundation in Iran has been identified and will be prosecuted.

The Soros Foundation's network is run through the billionaire's Open Society Institute, which is active in many countries. "The Washington Post" reports that the institute has said that its activities in Iran are centered only on humanitarian relief, public health, and culture.

Iranian Sufi Leader's Arrest Roils Supporters

May 21, 2007 (RFE/RL) -- Prominent Iranian Sufi leader Nurali Tabandeh (aka Majzub Ali Shah) was detained today by security forces on the outskirts of the northeastern city of Gonabad.

Tabandeh loyalists claimed that several of his supporters were beaten and detained along with him.

The reason for the arrest of Tabandeh, the leader of the Nematollah Gonabadi order, is unclear.

In October, 300 security forces surrounded Tabandeh's Gonabad residence after he refused to leave his city of birth.

Gonabad is the birthplace of the leaders of the Nematollahi Gonabadi dervish order, many of whom lived and were buried there.

Tabandeh's arrest has upset many supporters, who have said they will peacefully protest his arrest and call for his release.

One of Tabandeh's loyalists in Tehran who asked not to be identified told RFE/RL that this arrest followed calls by authorities for him to leave Gonabad.

"Some time ago, intelligence officials in Mashhad said [Tabandeh] should leave [the city], but he said, 'I will remain in Bidokht' -- because there was no legal reason for him to leave the city and go to Tehran and because they had asked to do that forcefully and illegally," the supporter said. "It's been15 days now [since the warning] that he had stayed in Bidokht. But they acted like thieves -- they arrested him on the road [to Aliabad] -- they didn't come to Bidokht."

The same source said some supporters have considered far more serious acts to draw attention to what they regard as official persecution.

"By tomorrow, all the [dervishes] will depart for Bidokht -- they're going from different provinces to Bidokht," the source said. "Two of the dervishes had wanted to immolate themselves in front of the governor's office because none of the officials have provided a response. But other dervishes prevented that from happening because it could have a negative impact. But they cannot end this story like this. What the government has done is illegal."

Increasing Pressure On Religious Minorites

High-profile cases like Tabandeh's suggest that pressure on minority religious groups, like Sufis and dervishes, has increased in Iran.

Last year, a Sufi house of worship was destroyed in Qom, and hundreds of Sufis were detained.

The U.S. Commission On International Religious Freedom said in a May 2 statement that an already "poor" government record on religious freedom had deteriorated in the past year -- particularly for religious groups like Sufi Muslims and Evangelical Christians.

Critics are likely to claim that Iranian authorities' latest move against the leader of the Nematollahi order is another sign of intolerance toward those who do not practice Islam as it is promoted by the political and religious establishment.

Several conservative clerics have in recent months described Sufism as a danger to Islam.

Tabandeh's Nematollahi Gonabadi order is reportedly among the largest Sufi groups in Iran.

Persian Gay And Lesbian Activist Urges Tolerance

May 17, 2007 (RFE/RL) -- Growing up in Iran was not easy for Arsham Parsi. Early in his childhood, he recognized that he was "different." When he realized during his teenage years that he was attracted to other men, his life became even more complicated.

"I grew up with religious and Islamic ideas," Parsi says. "'Well,' I thought, 'I'm a sinner.' I was trying to become a good person by practicing religious rites, including by praying a lot and fasting. Becoming good was one of my main concerns, and because of that, I entered a very difficult period. I decided to get to know myself. Now I'm glad that I know myself. I have my beliefs, I believe in my God, and I have my sexual orientation."

Gay and lesbian groups are marking International Day against Homophobia today, celebrating the day 17 years ago that the World Health Organization (WHO) removed homosexuality from its list of mental illnesses. Since then, the situation for homosexuals has improved in many parts of the world.

But they still face discrimination and harassment in many countries -- including Iran, where a strict official interpretation of Islam threatens homosexuals with the death penalty.

Pressure...And More Pressure

Parsi now lives in Canada, and is secretary-general of the Toronto-based Iranian Queer Organization (formerly called The Persian Gay and Lesbian Organization). He says homosexuals in Iran live in fear.

Under Islamic laws as applied in Iran, homosexuality is punishable by death. But in recent years, there have been only a few reported cases of individuals being officially charged with homosexuality.

Yet Parsi says the specter of the harsh sentences casts a shadow on the life of homosexuals.

"There is pressure on all [people] in Iranian society," Parsi says. "But if they arrest women, they don't execute them for being a woman; if they arrest [unmarried] couples, they don't execute them for being together at a party; they put them under pressure. But in the case of homosexuals, even if nothing happens, they always face fear. Many believe that the punishments for homosexuals are only on the books and they are not being applied. But we don't accept this -- we think homosexuals are being sentenced, but perhaps [these cases] don't get reported."

Sexual issues are considered taboo in Iran, and there is widespread misinformation about homosexuality. Many Iranians consider it a disease or sickness. For some, homosexuality among men is synonymous with pedophilia.

As a result, gays and lesbians in Iran cannot be open about their sexual orientation. Many suppress their feelings. There are also reports of sex-change operations or hormone therapy to escape persecution. Some also face arranged or forced marriages insisted on by their families.

Parsi claims a lack of knowledge and homophobic culture that rules Iranian society puts enormous pressure on homosexuals.

Fear Factor

"Execution and flogging are punishments [that homosexuals can face], but these sentences are not being applied only after arrest," Parsi says. "Before the government detains and flogs someone, the families, friends, and acquaintances [harass] that person, they ostracize him and create many problems for that person."

Parsi says social forums for homosexuals -- whether online, at private parties, or in cafes -- are accompanied by fear.

Police frequently raid private parties and detain young Iranians who have been socializing, dancing, and sometimes drinking alcohol. Such raids target more than just the homosexual community.

In 2001, when Parsi was still in Iran, he launched a small Internet group that later became known as the Persian Gay and Lesbian Organization. The aim -- through connections with human rights organizations around the world -- was to address the unique hardships of lesbians and gays living in Iran.

He left Iran in 2005 in large part out of fear of arrest and sought asylum abroad. He has lived in Canada since 2006, increasing his activities in defense of Iran's homosexual community.

He says his group informs the world about violations of the rights of gays and lesbians in Iran.

"We have created a link between the voices inside the county and those outside [the country]," Parsi says. "We try to be a platform for informing others in case there is an arrest in Iran, in case someone has been flogged or another similar incident -- because today in Iran no one is really interested or cares to listen to the problems of homosexuals."

Trying To Inform

The Iranian Queer Organization also tries to increase awareness about homosexuality through a monthly email magazine, "Cheragh" (Light).

Parsi argues that many people act homophobic owing to a lack of knowledge.

"Fighting homophobia means treating the person who sits next to you properly; it means that if your son is homosexual and his [brother] shouts at him for it, you have to defend him," Parsi says. "You who are his mother, father, or brother -- you have to support him."

As his and other gay rights groups celebrate International Day against Homophobia -- with this year's emphasis on education -- Parsi urges tolerance.

To mark the day, Human Rights Watch (HRW) named Iranian President Mahmud Ahmadinejad to its annual "hall of shame." The list includes leaders who have undermined human rights by actively promoting prejudice against lesbian, gay, bisexual, or people who have undergone sex changes.

HRW says Ahmadinejad has overseen a creeping campaign to "counter public immorality," arbitrarily arresting thousands of Iranians for dressing or behaving differently. It accuses Ahmadinejad of using religious vigilantes to raid homes and other private places in search of "deviant" behavior -- including homosexuality.

Wariness Can't Disguise Interest In U.S. Talks

May 15, 2007 (RFE/RL) -- Politicians and legislators in Iran reacted promptly to recent reports that Iranian and U.S. representatives will soon meet in Baghdad to discuss security in Iraq. The tone of those responses highlights the allure of a prospective meeting with a near-constant protagonist in Iran's foreign policy discourse.

It will mark one of the very few formal diplomatic engagements between Tehran and Washington since Iran's 1979 revolution and the subsequent severance of mutual diplomatic ties.

No date for the U.S.-Iranian talks has been announced. But Iran's public stance is that -- as with an Iraqi security conference in the Egyptian resort of Sharm el-Sheikh in early May -- it is willing to talk in order to help neighboring Iraq.

The head of the parliamentary National Security and Foreign Policy Committee, Alaeddin Borujerdi, asserted that "talks between Iran and America in Baghdad are to help the Iraqi people and government," and "put a full stop to the present security crisis in Iraq," ISNA reported on May 14. Borujerdi added that Iran's Supreme National Security Council, a key foreign and security policy-making body, should determine who will represent Tehran.

The U.S. ambassador in Baghdad, Ryan Crocker, is expected to represent Washington at the meeting.

Iranian legislators say the United States requested the talks, and they have implied that Iran is in the position of regional strength. At the same time, they have reiterated Iran's persistent distrust of the United States and its motives. They also wonder aloud what Iran might get in return for helping bring stability to Iraq.

What's In It For Us?

Iranian officials frequently claim that Tehran has helped Washington at sensitive junctures in recent years -- including in connection with the U.S.-led ouster of the Taliban regime in Afghanistan -- and received little in return. The editor of the conservative Iranian daily "Kayhan" on May 13 accused the United States of "want[ing] talks for [the sake of] talks, not to resolve mutual problems." Editor Hossein Shariatmadari described negotiations as a "great and strategic mistake" that would inflict "irreparable" harm on Iran, ISNA reported. Shariatmadari is widely associated with Supreme Leader Ayatollah Ali Khamenei. But he is also one of Iran's more outspoken public figures, and his views need not always reflect state policy.

It goes without saying in Iran that there could be no talks with the United States without the tacit approval of key decision-makers headed by Supreme Leader Khamenei. But Shariatmadari argued that no change in U.S. conduct toward merited any verbal engagement. He said Iran and the United States have "essential" differences related to the nature of their systems, with tense relations an inevitable consequence.

Hossein Nejabat, a member of the parliamentary presidium, took a softer line on May 14. Nejabat said that "if America has asked [Iran] to help with stability in Iraq, and supposing it is sincere" -- which he described as doubtful -- then he said that Iran "will cooperate with it" and "all state institutions and factions confirm" such a position, ISNA reported. Nejabat said Iran and the United States must talk and back "anything that benefits" the Iraqis. But he stressed that Iranians "have to have [their] share in the matter."

Reza Talai-Nik, a member of the parliamentary National Security and Foreign Policy Committee, warned that talks yielding "weak" results could prompt the United States to launch a new round of accusations against Iran, ISNA reported. Talai-Nik argued that if "America fails" in the talks, it will "blame and intensify the psychological and political pressures against Iran." He counseled not allowing bilateral talks to become a "crux" of Iranian policy-making toward Iraq.

An 'Open Door'

Some of those same parliamentary voices have hinted at cautious interest in such talks' potential for opening the path toward a tentative rapprochement or broader discussions.

The parliamentary presidium's Nejabat suggested on May 14 that "negotiations about the nuclear dossier are a separate chapter" that might be discussed "whenever the parties accept each other's conditions." He stressed Iran's "many issues" of divergence with the United States, but added that they require "transparent" discussions. Nejabat cited an ongoing dispute over frozen Iranian assets in the United States and what he described as an openly stated U.S. desire for regime change in Iran.

The Security and Foreign Policy Committee's Talai-Nik noted that Iranian officials arrested in the Iraqi city of Irbil in January are still being detained, and said there are "limited grounds" for using talks to benefit the nuclear dossier. Talai-Nik said some agreement and an "approximation" of Iranian and U.S. policies in Iraq could advance the "possibility of reducing other tensions and challenges," although he cited "strategic differences" between the "aims of America and Iran over Iraq" as an obstacle to agreement.

Other legislators from the National Security and Foreign Policy Committee have also commented on the talks' potential beyond Iraq-related matters. Suleiman Jafarzadeh claimed on May 13 that "the Baghdad talks are basically to open the door to formal and open talks between Iran and America." He also urged talks at the foreign ministers' level.

Lawmaker Heshmatollah Falahatpisheh said on May 13 that the prospective talks alone demonstrate that the two states can resolve "some issues" through dialogue, ISNA reported. He said Baghdad talks could yield positive results if Iran feels there is "good will" on the other side.

Stealing Reformist Thunder

Mohammad Sadr, a deputy foreign minister under the reformist government of President Mohammad Khatami, said on May 14 that Tehran should make the talks "comprehensive" to ensure that Iran's needs -- notably in the nuclear area -- are also met. Sadr described Iraq as "Iran's winning card" and said Tehran "must use this winning card in comprehensive negotiations with America, to benefit from the negotiations," "Aftab-i Yazd" reported on May 15.

Conservative commentator and journalist Amir Mohebbian argued that Iran must -- in these talks -- ask the United States to put aside "senseless projects" like regime change in Iran and to stop causing "problems" for Iran, Mehr news agency reported on May 14. He said there is no sense in talks wherein Iran would help Washington without reciprocity or reliable commitments on respecting Iranian interests.

Many of these comments suggest that -- whatever Iranian officials' expectations -- the prospect of direct talks with the United States is tantalizing. The subject of engagement does not appear to be the "taboo" that it once was in Iran -- particularly during the Khatami presidency. Indeed reformists -- now outside the halls of power -- have frequently claimed that conservatives would do everything in their power to ensure that they -- and not a reformist-led government -- would initiate any dialogue with the United States. That tack reveals a belief among Iranian politicians that the political leadership could reap benefits -- and added public credibility -- that might be conferred by reduced tensions with the United States.

So even as it proves difficult to promote any relations with a global power frequently regarded as Iran's nemesis, it might be argued that the perspective on limited contacts is not inherently negative.

Perhaps no breakthroughs will occur at these Iranian-U.S. talks. But there is a chance that -- in time -- direct and public contacts between U.S. and Iranian officials will cease to be a rarity.

Repatriations Spark Debate On Tehran's Aims

May 10, 2007 (RFE/RL) -- Iran's forcible repatriation of tens of thousands of Afghan refugees has raised suspicions that Tehran is trying to destabilize Afghanistan, and prompted complaints from the Afghan Foreign Ministry.

Afghan politicians, media, and even some repatriated refugees say they think the mass evictions since mid-April are an attempt by Tehran to destabilize western Afghanistan.

With tension heightened between Washington and Tehran over Iran's controversial nuclear program, analysts say such fears are understandable.

The discovery of Iranian-made weapons that NATO says were bound for Taliban fighters has fueled further concern.

But while experts on South Asia interviewed by RFE/RL said they thought Tehran would like to prevent the U.S. military from building up a strategic airfield near Afghanistan's western border with Iran, they expressed doubt the Iranian government was using mass repatriations and weapons smuggling to try to achieve that goal.

Shindand Effect

Since 2003, the U.S. military has been developing the strategic Shindand airfield near Iran, in the western Afghan province of Herat.

Ian Kemp, an independent defense analyst in London, said the presence of U.S. forces at Shindand is seen by Tehran as a threat because Shindand could serve as a launching point if the United States decided to attack Iran's nuclear facilities from the air.

"The Iranians have a significant military capability," Kemp said. "They are likely to offer far greater resistance [on the ground] than the Iraqi forces did. And with the U.S. and its allies being bogged down in Iraq and Afghanistan at the moment, any form of conventional military action on the ground [against Iran] can be ruled out of the question. I think if the United States was to decide upon military action, a combination of missile strikes using sea and air-launched cruise missiles and air strikes would probably be the preferred option."

Making Things Difficult

Peter Lehr, an expert on South Asia at St. Andrews University in Scotland, said the Iranian government might be trying to complicate the situation for U.S. forces in western Afghanistan by sending thousands of Afghan refugees there.

"That's a kind of war by proxy," Lehr said. "If you take a look at other borders between Pakistan and India -- especially the Kashmir problem -- you see that Pakistan is busily exporting many of these former Afghani fighters into Kashmir so that it can raise some troubles there and keep the Indians busy. With the same logic, you can say that Iran is trying to get as much mileage out of the refugee crisis as they can get just to annoy the Americans. That's the way to fight back against the Americans. [Iran] can't come out with [naval war ships]. They can't come out with sophisticated [war planes]. What they can do is things like hostage taking, sending out some agents. What they can do is send a deluge of refugees across the border. That's possible."

Pakistani journalist and author Ahmed Rashid said he thinks the repatriation of thousands of Afghan refugees by Tehran could destabilize the Afghan government and cause problems for U.S. forces at Shindand.

"That's a possibility," Rashid said, "but I don't think [Iranian officials] need to do that, because they have long-running relations with many of the commanders and small-time warlords in western Afghanistan -- both Pashtun and non-Pashtun."

Still, regardless of whether Afghan refugees are being used as pawns in a geopolitical struggle, Rashid said he is convinced that Tehran wants to make life more difficult for U.S. forces in Afghanistan.

"I have no doubt that Iran has been involved in channeling money and arms to various elements in Afghanistan, including the Taliban, for the last few years," Rashid said. "I think Iran is playing all sides in the Afghan conflict. There are Pashtuns and non-Pahstuns who are being funded by Iran who are active in western Afghanistan. If the Iranians are convinced that the Americans are undermining them through western Afghanistan, then it is very likely that these agents of theirs have been activated."

'Confrontation By Proxy'

British Defense Secretary Des Browne has suggested that Iran might be helping Taliban forces that are fighting NATO troops in Afghanistan.

Browne told the House of Commons Defense Committee in London on May 8 that Iran has "sought confrontation by proxy" with Britain and the United States, as well as other NATO members, in the Middle East. Without elaborating, Browne said there is "some indication" that Iran is doing the same in Afghanistan.

But Lehr said he is suspicious of claims that Iranian agents slipped into Afghanistan alongside the thousands of repatriated refugees in order to instigate recent violence near the Shindand airfield.

Lehr said he also doubts suggestions by U.S. and British officials that the Iranian government has been directly involved in supplying weapons to the Taliban.

"I see a connection to this nuclear issue," Lehr said. "The United States are desperately looking for a casus belli, in my opinion. Of course, it is tempting for [Iran] to instigate even more hatred against the Americans around this very air base. They are deniable effects; if some of these people get caught, well, they can always deny that they are working for the Iranian government. But if you take a look at the context -- at this nuclear issue -- and if you take a look at the fact that the Americans tried to link up a weapons shipment from Iranian territory into Afghanistan with the politics of the Iranian government, then it starts to get a bit smelly."

One of Lehr's areas of expertise is the organized criminal groups that smuggle illegal drugs from Afghanistan to Western markets. He says drug payments made by those groups are much more likely to be the reason that Iranian weapons are being found by NATO soldiers in western Afghanistan.

"If you take a look at the weapons smuggling, well that's been going on for decades," Lehr said. "That is part of this drug route where heroin is shipped from Afghanistan via Iran and other countries and Russia to Europe. The best way of paying for drugs is either, of course, with money -- or with weapons. And there is not even circumstantial evidence that the Iranian state, itself, is involved with that. That is organized-crime groups."

Afghan media and politicians speculate that one reason for Iran's expulsion of refugees probably is to show that it can indirectly pressure the United States by contributing to an economic crisis in Afghanistan.

They said another reason could be the internal economic difficulties now facing Iranian President Mahmud Ahmadinejad's administration. Sanctions against Iran have contributed to inflation and unemployment there. The expulsion of 1 million Afghan refugees could be seen by Tehran as a way to increase employment opportunities for Iranian citizens.