From: clarinews@clarinet.com (CHRISTINE HAUSER)
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Subject: Moderate Iranian Parliament may help improve ties with West
Keywords: international, non-usa government, government, election, politics,
	non-usa economy, economy, oil, energy
Date: Tue, 14 Apr 92 9:03:41 PDT
Location: iran, mideast
ACategory: international
Slugword: iran-analysis
Priority: regular
Format: regular
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Note: (1grafinsert4thgraf xxx gulf war. pickup5thgraf: tehran has --
 outpointing hard-liners retain some power)

	DUBAI, United Arab Emirates (UPI) -- The apparent election of a
moderate Iranian Parliament will encourage President Hashemi Rafsanjani
to press ahead with economic reforms and improve ties with the West,
reopening the door to foreign investment, diplomats in the region said.
	Last week's general elections, the first since the death three years
ago of the Ayatollah Khomeini, spiritual leader of the Iranian Islamic
Revolution, shows a Parliament dominated by moderates.
	As of Tuesday, vote-counting was continuing for the 270-seat
Parliament, and runoff elections were expected for at least 70 seats.
But with 139 candidates declared elected, the trend appeared to indicate
hard-line Islamic fundamentalists were being pushed aside, analysts
said.
	The softer government also may improve ties with neighboring Gulf
states, which have slowly rebuilt relations with Tehran after its
neutral stance during the Gulf war.
	But Rafsanjani still will have to look over his shoulder because
hard-liners retain considerable power. They control groups of armed
revolutionary guards, run three newspapers in Tehran and have supporters
in key government positions.
	Tehran has already received applications from French, German and
Italian firms for investment in new petrochemical projects in Iran's
developing free trade zones. But a more moderate government may also
eventually open the door to U.S. dollars, especially in Iran's oil
sector.
	``A moderate pragmatic government will not only encourage foreign
investment but undoubtedly bring all countries on both sides of the Gulf
closer together,'' an Arab diplomat based in the United Arab Emirates
told United Press International.
	The virtual rout of hard-liners will close a longstanding gap between
the executive and legislative branches of the government, the diplomat
said.
	``If the members of Parliament are on the same side as the president,
private sector business will get the support it deserves,'' said an
executive of ENIITCO, an Iranian trading firm based in Dubai.
	Iran and the six Gulf Cooperation Council (GCC) countries have close
commercial and demographic ties, with up to 1 million Iranians living in
neighboring Gulf states.
	Since the end of the six-week war driving Iran's former war enemy
Iraq from its occupation of Kuwait, Tehran has resumed diplomatic ties
with Saudi Arabia and pledged military help to Gulf neighbors against
any future foreign aggression.
	Trade with the U.A.E., its biggest regional economic partner, reached
$1 billion in 1991, mostly in exports from Dubai.
	Iran's trade in 1989 with Saudi Arabia reached $92 million and with
Kuwait $32 million.
	Tehran is inviting foreigners in the U.A.E. to invest in Iranian
companies as part of its privatization program to help fund the
rebuilding of the country's economy, shattered by an eight-year war with
Iraq that ended in 1988.
	Tehran is giving priority to GCC countries for investments in the
Qeshm Island Free Trade Zone as part of the post-war $120 billion five-
year development plan.
	Since his election in 1989 after Khomeini's death, Rafsanjani has
fought hard-liners in Parliament to improve relations with the West and
its Arab neighbors.
	The president wants foreign loans of $27 billion for a five-year
reconstruction plan, but his plans to push economic reforms and expand
ties with the West have been frustrated by clerics who fear Western
influences will corrupt the conservative Islamic state.
	Iran, with a population of 56 million and the second largest natural
gas reserves in the world, is seeking foreign technology to complete
refinery upgrading and develop its industrial sector, mining and metals
deputy minister Ali Shams Ardekani said.
	The country desperately needs funds to develop its oil and mining
sector and is turning to Japanese and European firms for the capital.
	``With the new Parliament business will grow, especially in
industrial production and the private sector involvement,'' said the
ENIITCO executive said.
	European Community agencies approved financing for Iran's $1.6
billion Al Ahmadi aluminium project in a move signaling increased
confidence in Iran's market, said Mahdi Sajjad, a partner in the
project.
	U.S. oil companies have been eyeing the market with interest. Some of
them are working in Iran through joint ventures. The Dubai-based Dow
Schlumberger, a joint venture between the U.S. firm Dow Chemical and
Schlumberger Ltd. this week began a subcontracting project with the
National Iranian Oil Co.
	``My clients feel the mood will be more favorable for enterprise and
business following these elections,'' said David Stockwell, managing
partner of Stockwell and Associates, a Dubai-based law firm.
	Iran, OPEC's second biggest crude oil producer after Saudi Arabia,
needs funds to increase production to five million barrels per day from
current production of 3.5 million barrels.
	``Ideally, we'd like to become partners with Iranian companies,
especially to license our technology or enter into exploration
production and refining agreements,'' Dan Tetzlaff, a Texaco, Inc.
executive said at a recent oil conference in Dubai.
	``Hopefully these elections will serve as a catalyst or departure
point for more Americans to do business in the Iranian market,''
Stockwell said.
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