Conservative forces have retained their grip but the regime has been threatened by widespread protests.
Much of Iran consists of a high central plateau ringed by mountains, the highest of which are in the volcanic Elburz range in the north. Iran is not very fertile—more than half the territory is barren wasteland, most of which is salt desert and uninhabited. Only around 10% is suitable for arable farming, much of this in the fertile northern plateau. Another 20% can be used for grazing. Iran is vulnerable to severe earthquakes, the most recent of which in 2003 in the city of Bam killed 43,000 people.
Ethnically, Iran is quite diverse. Just over half the people are ethnic Persians, who are to be found throughout the country. But one-quarter are Azeris, who live in the north-west. The least assimilated minority are the Kurds, who make up 7% of the population and have a largely nomadic existence in the mountains of the west. This diversity is also reflected in language: Persian (Farsi) is the official language but one-quarter of people use Turkic languages. Iran has also received millions of refugees, chiefly from Afghanistan and Iraq. On the other hand, around 200,000 Iranians leave each year, seeking a better life abroad.
Most people are Shia Muslims, but around one-tenth, including the Kurds, belong to the Sunni sect. In theory there is religious freedom, but in practice those who are not Shia Muslims are second-class citizens. Islam also places restrictions on women, particularly on their dress. But by the standards of other Islamic countries, Iran is relatively liberal— women have good access to education and can enter most professions.
Despite Iran's hostile terrain, agriculture accounts for about one-tenth of GDP and one-quarter of the workforce. The main crops are wheat, barley, and potatoes. But only one-quarter of the potential area is being cultivated and productivity is low—hampered by poor management and political uncertainties. Hopes of reaching food self-sufficiency were dashed by a series of droughts. Around one-third of agriculture is based on livestock, chiefly sheep and goats.
At the heart of Iran's industrial economy is oil. Iran has enough reserves for 75 years of extraction at current rates. In 2007 oil accounted for over 90% of export earnings. Reserves are in the south-west, and also offshore in the Persian Gulf. Iran also has the world's second largest reserves of natural gas but these remain under-exploited.
Iranian industry was nationalized after the 1979 revolution. Most is inefficient and runs far below capacity. Foreign investors have been discouraged by official coolness to foreigners, and also by a US ban on trade and foreign investment imposed since 1995. The most promising manufacturing area is petrochemicals, though steel and cement also offer prospects for diversification from oil.
Most Iranians struggle to survive. Unemployment is officially around 13%, but many professional people are on such low salaries that they need to take on two or three extra jobs. Corruption is widespread.
An Islamic republic run by religious jurists
Political life in Iran was transformed by the 1979 revolution that swept aside the Pahlavi dynasty of the Shah and by 1981 had established a strict Islamic Republic which was to be run by ‘religious jurists’. At the head of these was the formerly exiled Ayatollah Khomeini, supported by another cleric, Hashemi Rafsanjani, who in 1980 became the speaker of the Majlis, the 207-member parliament.