Mullahs' war-cry fades as inflation takes off

In the first of a series of articles from Iran, Robert Fisk, Foreign Correspondent of the Year, finds that the Islamic Revolution is losing ground to the mighty dollar

What struck your eye at Mehrebad airport was not the speed with which you cleared immigration, nor the disinterest of the customs men in the word processor, cameras and tape recorder, nor even the litter- free concourse where drivers try to take you for a ride into town for double the price of a taxi.

It was the tall man wearing glasses in the Bank Melli Iran, whose eyes were fixed on the automatic counting machine as it absorbed new, pale blue 10,000-riyal notes. He scribbled on the back of the receipt and passed the paper to me. "Our rate today: 2349," it said.

I handed him three $100 (pounds 65) bills and he ran his fingers carefully along the edge of the dollar notes. You can't be too careful, it seems, about fake $100 bills in Tehran these days. All the while, the machine was eating and spitting out notes.

Until a few hours earlier, President Ali Akbar Hashemi Rafsanjani had fixed an official ceiling of 3,000 riyals to the dollar. But on the black market, it has been climbing to 6,000 or7,000. Ayatollah Morteza Moqtadaie, the Attorney-General, is preparing a law that will entail the death penalty for "speculators and profiteers", those allies of "global arrogance" (code for the United States) who undermine what the newspapers call "the Islamic system".

None of this disguises the collapse of Mr Rafsanjani's currency free- market, or the death of the economic liberalisation programme that heralded the end of war with Iraq.

The counting machine was throwing up the notes - eight every second - until the man in glasses scooped them up and pushed them through the glass partition with an embarrassed smile. "Count them if you like," he said, brightly. "I stuffed them into a small plastic bag and had just left the airport security desk when he bounded up behind me. "Excuse me, can I count them again?" he asked. His thumb slapped into them with almost the speed of the counting machine, and he pulled one out. "Sorry, a mistake," he said. "This one belongs to the bank. Have a nice day." It is a beautiful note, delicately embossed in blue, green and vermilion, with Iran's highest mountain, Damovand, on one side and Ayatollah Khomeini on the other. The study is from a photograph in which the leader of the Islamic revolution almost smiles. There was little reason for him to smile on the 10,000-riyal note yesterday. It had lost half its worth in only 18 weeks.

Tehran was cleaner than I remembered it three years ago. The public gardens were better kept, the streets were swept and smart new private houses were going up in the suburbs.

Even the muggy old Laleh Hotel had changed. It had been the Intercontinental until the Revolutionary Guards threw the hotel's champagne and wine into the swimming pool back in 1979 and renamed it Laleh, after the tulip of "martyrdom".

The rooms were seedier than ever, but the old doormat painted over with the Stars and Stripes has been replaced by a dull red carpet. In the coffee shop, Western businessmen, many of them Americans who have missed President Bill Clinton's trade ban, were sipping scalding tea with Iranian friends.

Outside the university, the roads were roped off, as they always are at Friday prayers, for revolutionary sermons. Old men sat with sons and grandchildren while women in chadors walked underthe trees on the other side of the road. The revolution has not died. Yet, I've watched half a million people flock these streets to hear the words of Mr Rafsanjani and yesterday perhaps only 4,000 or 5,000 heard Ayatollah Imami Koshani abuse the United States for its economic embargo and protest against the use of the word "terrorists" for Muslims. When the loudspeakers re-broadcast the faithful's call for Marg ba Amrika - "Death to America" - it was almost too faint to decipher.

The newspapers seemed more preoccupied with the temporal world. The Tehran Times approvingly noted Vladimir Zhirinovsky's condemnation of President Clinton for trying to destroy Iranian-Russian nuclear co-operation, after Russia's nationalist leader had given an interview to the Iranian News Agency. It carried an even longer article on last week's Clinton-Yeltsin talks without mentioning Chechnya. Koyhan International noted the continuing Russian attacks without comment and without mentioning that the Chechen fighters are predominantly Muslim. Perhaps it is part of the price for maintaining good trade relations with Moscow.

Outside the roped-off roads, a few hundred yards from Friday prayers, the shops had reopened. The parks were filled with picnicking families and the Ayatollah's words were a mere whisper above the hum of the midday traffic. It was only a first impression, but there seemed to be a message: fewer prayers to heaven, more riyals to the dollar on Earth. It did not sound like good news for the government of the Islamic Republic.

n Paris - Hundreds of Iranians gathered in several European capitals yesterday to protest against the murder of two women members of Iran's armed opposition AFP reports