By Ali Fathollah-Nejad
The November presidential election victory of Joe Biden against the incumbent Donald Trump raised alarm bells within the anti-Iran front in the Middle East – most notably Israel and Saudi Arabia. They reckon that the days of Trump’s ‘maximum pressure’ campaign against Iran are numbered, and fear that President-elect Biden will follow through on his campaign promise to return the USA to the Joint Comprehensive Plan of Action (JCPOA, or the Iran nuclear deal), which will include easing sanctions on Iran in exchange for the latter’s return to the limits and restraints imposed by the JCPOA on its nuclear programme.
With just over a month left for the Trump administration, there has been a sense of urgency among Iran’s foes not only to sustain but to increase the pressure on Tehran in this period, by creating new facts that the Biden administration would not be able to ignore, and which will complicate any smooth transition to a new US Iran policy. These new facts could be achieved through new sanctions on Iran, or through other means, such as covert operations against Iran’s nuclear programme intended to provoke an Iranian reaction. This last possibility reportedly featured prominently in a November visit to the region by US Secretary of State Mike Pompeo, especially in his meetings with Israeli, Saudi and UAE leaders. Given these attempts at increasing agitation by the anti-Iran front, as well as Trump’s unpredictability, concerns were raised in Tehran. Iran’s military leadership has, as expected and in its usual manner, reacted with a language of defiance and counter-threats.
By Mahdi Ghodsi and Ali Fathollah-Nejad
The COVID-19 pandemic has ravaged Iran’s already ailing economy, but the country’s economic crisis is rooted in factors beyond the pandemic’s fallout. Since the United States’ 2018 withdrawal from the Joint Comprehensive Plan of Action (JCPOA – or Iran Nuclear Deal), it has become clear that Iran’s economic woes – especially its currency devaluation – are strongly correlated with key political and geopolitical events. The volatility in the exchange rate and Iran’s currency depreciation are signs of an unhealthy economy.
By Ali Fathollah-Nejad and Amin Naeni
The outcome of the 3 November US presidential election will reverberate far beyond the USA, especially in Iran, where it may influence the fortunes of rival political factions as well as the results of Iran’s own presidential elections next June.
The Trump administration’s ‘maximum pressure’ campaign has imposed unprecedented economic sanctions against Iran and severely undercut the credibility of the reformist camp. Massive popular disillusionment with so-called moderates made it easier for hardliners to win control over the Iranian parliament in February. Now, due to the reluctance of many Iranians to participate in future elections – out of disappointment at the failure of reformists to fulfil their promises of economic progress and political reform – hardliners are hoping to gain the presidency as well.
By Phyllis Bennis
When US president, Donald Trump, announced his latest threats against Iran on Rush Limbaugh’s show last week, it was unclear whether he or his steroids were talking. Even this president rarely uses language like, ‘If you f**k around with us, if you do something bad to us, we are going to do things to you that have never been done before’ in announcing foreign policy.
The possibility of an ‘October Surprise’ looms over every US presidential election. This year, twenty-some days from the election they’re likely to lose, with more than 215 000 people across the United States dead from the pandemic, the White House transformed into the latest coronavirus hot spot, the economy still in free-fall, and the commander-in-chief high on drugs, the Trump administration’s latest harsh new sanctions on Iran do not look surprising at all. The political use of the term October Surprise, after all, started with the Iran hostage crisis of 1980.
But this not-so-shocking surprise is actually incredibly dangerous and reckless for the future, and incredibly cruel and heartless – even sadistic – right now. The new economic sanctions will shut down the last eighteen Iranian banks still able to finance the import of desperately-needed humanitarian goods, including medicine desperately needed during the Covid-19 crisis, and even basic foodstuffs. Earlier US sanctions had already brought massive suffering to Iranians. At the beginning of April, as the pandemic was at its height, Democratic Senator Chris Murphy acknowledged that ‘U.S. sanctions are stopping medical equipment from being sent to Iran. As a result, innocent people are dying.’
The White House claims this latest escalation of its ‘maximum economic pressure’ sanctions campaign will force Iran to the negotiating table. But years of punishing the entire population of 80 million Iranians has shown that this is almost certain to fail to achieve stated US goals, and even if it succeeded, the human price paid in hunger, lack of medicine during a raging pandemic, and the death of children and other vulnerable people is simply far too high.
During an earlier sanctions campaign against Iran, Democratic congressperson Brad Sherman blithely noted that ‘critics also argued that these measures will hurt the Iranian people. Quite frankly, we need to do just that.’ Sherman, who is now running to chair the House Foreign Affairs Committee, had the audacity to compare Washington’s brutal sanctions against Iran to the global movement against apartheid South Africa in the 1980s. In so doing, Sherman deliberately ignored a critical distinction: the vast majority of South Africans supported anti-apartheid organisations that called on the world to impose sanctions, accepting the consequences, and linking those external sanctions to their broader national strategy for liberation and freedom. In Iran, people and organisations fighting to broaden democratic rights are calling desperately for an end to sanctions – because the sanctions are killing them.
This newest punishment on Iranians will exacerbate the devastating impact of the broader sanctions regime the USA has imposed on Iran for years. While the State Department brags that it ‘continues to stand with the Iranian people’ and that ‘exceptions for humanitarian exports to Iran…remain in full force’, the reality is that existing economic sanctions, despite those exceptions, have destroyed Iran’s economy and the lives of most of the 80 million Iranians, especially the poorest and most vulnerable among them.
The latest escalations in broad US sanctions against Iran began with Trump’s withdrawal from the 2015 Joint Comprehensive Plan of Action (JCPOA), or Iran Nuclear Deal. Despite virtually unanimous international and US intelligence agreement that the JCPOA was working (Iran was not building nuclear weapons), and UN inspectors remained on the ground in Iran, and despite UN sanctions being stopped, Trump made it clear that abandoning ‘Obama’s deal’ was top of his agenda. In May 2018 he pulled out of the deal and imposed a host of new crippling and unilateral sanctions against Iran.
Other signatories to the JCPOA – Germany, France, Britain, China, Russia, and the European Union – all opposed the US withdrawal, as did the UN Security Council, which had endorsed the deal and established a monitoring agency to guarantee its implementation. The biggest US demand that the UNSC had accepted was what became known as ‘snap-back’, by which any signatory could report an Iranian violation, and if confirmed by UN monitors, the UN sanctions that had been lifted would automatically be restored. With the USA having abandoned the deal, and US sanctions rapidly escalating, European countries made some efforts to protect Iran from the impact of the new sanctions, but largely failed. Iran eventually responded by taking some calibrated steps in nuclear power enrichment beyond what was permitted in the JCPOA.
In early August, Washington tried to convince the UNSC to extend some conventional arms’ restrictions on Iran that were set to expire. These restrictions had nothing to do with nuclear weapons, and the rest of the UNSC (with the exception of USA-dependent Dominican Republic) unanimously refused. A week later, in an effort to escalate ‘maximum pressure’ on Iran even further, Secretary of State Mike Pompeo announced he was invoking the ‘snap-back’ procedure, and demanded the restoration of UN sanctions against Iran. The rest of the Security Council (except the Dominican Republic) made it clear that since the USA had renounced the agreement, it no longer had standing to make such a demand. Pompeo’s response was that since the USA had originally signed the treaty, Washington still had all the rights of signatories, despite having officially withdrawn and thus ending all its obligations. He then simply announced that UN sanctions were back in force, though no other state agreed.
Then came the latest US sanctions. Along with new suffering for the Iranian people, the danger could quickly escalate if, for example, the USA decided to forcibly board and ‘inspect’ a ship that it might claim was carrying goods to or from Iran. If Iran were to resist, a serious military conflict could erupt. This threat of a deliberate US provocation, aimed at forcing Iran to respond militarily and giving hawks in Washington an excuse to use greater military force in time for pre-election boasting by Trump, could shape an incredibly dire and dangerous October surprise. Iran has not taken Washington’s bait, reacting instead to US provocations – including the assassination of powerful Iranian political and military leader General Qasem Soleimani in January – with significant caution. But Iran has its own elections scheduled in June, and there is growing pressure on the leadership for more decisive action.
Iran may also be holding back in anticipation of a change in the White House. Democratic Party presidential contender Joe Biden has not called for ending sanctions on Iran, but has made clear that he would: ‘offer Tehran a credible path back to diplomacy’, return to the JCPOA, end the Muslim ban on entry to the USA, and work to end the Yemen war. While his position is not nearly as strong as it needs to be to end the assault on ordinary Iranians’ lives, there is no question that it challenges some of the worst aspects of existing policy. This should not be surprising; the JCPOA represented the high point of Obama’s foreign policy achievements, and since Biden’s credibility is fundamentally bound up with Obama’s legacy, he needs to maintain the commitment to the JCPOA and the diplomacy-over-war framework that enabled it. It is public knowledge that pressure on Trump to impose new and ever-more-damaging sanctions on Iran come from Israel and the far-right Foundation for Defense of Democracies in Washington. Just a couple of weeks before the newest sanctions were announced, the FDD head co-authored a Wall Street Journal op-ed calling for a ‘12th-round economic knockout’ in the form of a Trump move to ‘[b]lacklist the entire Iranian financial industry’.
So, beyond the expectation of a last-minute electoral bump (which is not a sure thing, given significant public opposition to wars in the Middle East), what is the US goal in provoking a military clash with Iran that could quickly escalate out of control?
In the Trump era, clear strategy is generally outside the realm of possibility. But immediate goals can sometimes be discerned. From the beginning, the Trump administration – mainly in the person of Trump’s son-in-law Jared Kushner – has focused on building a US-backed regional anti-Iran alliance with Israel and key Arab allies Saudi Arabia, the UAE, and others. Much of that is underway, bolstered most recently by the USA-orchestrated agreements between Israel and both the UAE and Bahrain, with the blessing of Saudi Arabia. Those agreements, while leaving out any reference to ending Israel’s oppression, occupation and colonisation of Palestinians, are primarily aimed at increasing US arms sales to its Arab allies, and going public with the longstanding but formerly more-or-less hidden trade, commercial and security ties between Israel and the Gulf monarchies.
Preventing Iran from obtaining nuclear weapons certainly remains a longstanding US goal. Part of that is rooted in the US determination to prevent further nuclear weapons proliferation in the world. However, much of it is based on a US commitment to Israel to maintain Tel Aviv’s nuclear weapons monopoly in the region; it is Israel’s Dimona nuclear plant that houses the Middle East’s only nuclear weapons arsenal. On the other hand, US intelligence agencies have for years agreed that Iran did not have a nuclear bomb, was not building a nuclear bomb, and had not even decided it wanted to build a nuclear bomb. Under the JCPOA, Iran’s nuclear capacity and its ability to obtain nuclear components anywhere else were extremely limited, and UN nuclear inspectors were on the ground. That remains the case, but could change if US ‘maximum pressure’ continues to prevent Iran’s access to international trade, purchases of food and medicine, and so forth.
Maintaining Iran’s role as enemy makes it easier for the USA to justify ever-more-massive arms sales to repressive authoritarian kingdoms, and the ten-year $38 billion gift to the Israeli military. For the preposterously wealthy but strategically dependent Gulf states, the real fears of Iranian influence (on Shi’a populations in their countries, competition for oilfields and pipeline routes, etc.) are matched or even outstripped by the value of Iran-as-bogeyman to ensure continuing US strategic support and protection.
Reports have been floating around that Washington may close the giant US embassy in Baghdad, and pull out diplomatic and other non-military personnel. That may be in anticipation of a future Iranian response to continuing US escalation – perhaps something like a US military attack on the Iraqi Popular Mobilization Forces – that could lead to Iranian retaliation against US military forces in Iraq. With Israeli backing, a strike against Iranian interests by some combination of the UAE, Bahrain and/or Saudi Arabia, even without direct US participation, cannot be completely ruled out. Under such circumstances, it is not impossible that public pressure could lead the Iranian regime to make different and much more dangerous choices.
US escalations may not be over yet. There are several more weeks of October for new surprises.
* Phyllis Bennis is an advisory board member of the Afro-Middle East Centre. She is also a fellow of the Institute for Policy Studies. Her most recent book is the seventh edition of Understanding the Palestinian-Israeli Conflict: A Primer.
** This article was first published online by Common Dreams
By Ali Fathollah-Nejad *
Iran’s 21 February parliamentary (Majlis) elections, which took place amid massive internal and external challenges to the state, ended with an all-too predictable result: the conservative camp – the so-called ‘principlists’ (osoul-garâ), consisting of conservatives and ultra-conservatives – emerged victorious, not least because of the mass disqualification of most reformist and moderate contenders (including eighty sitting MPs) by the ultraconservative Guardian Council that vets candidates for elections. As a result, the reformists had refused to endorse candidates in twenty-two of the country’s thirty-one provinces, including the capital Tehran where thirty seats were up for grabs.
Although these elections, the most uncompetitive in years, signalled the hardliners’ bold willingness to seek the monopolisation of power within the Islamic Republic’s institutions, the historic low turn-out has dealt a major blow to the legitimacy of the regime, and reflected the low level of people’s confidence toward it. As such, the elections’ outcome may complicate the realisation of such ambitions for power monopolisation, potentially constituting a Pyrrhic victory.
Against this backdrop, various scenarios regarding the domestic distribution of power can be envisaged, especially in view of presidential elections set for June 2021 – from monopolisation of power by hardliners all the way to a reformist comeback for the sake of regime survival. In foreign policy, the conservatives’ increasingly tight grip on all institutions – contrary to conventional assumptions of further hardening the fronts between Iran and the USA – might actually facilitate an arrangement with Washington.
Many candidates, little participation
These elections assembled a few superlatives compared to the eleven parliamentary elections held under the Islamic Republic since 1979: While a record number of people applied to run (around 16 000), the Guardian Council only approved a record low number (forty-four per cent of applicants); in total numbers, three times as many were disqualified in 2019 as compared to the last elections in 2016; and the number of approved candidates was the highest ever. The Guardian Council, whose members are directly and indirectly approved by the Supreme Leader, is responsible to vet candidates for parliamentary, presidential and Assembly of Experts elections. Most of those disqualified in these elections were reformists, undermining the Council’s allegedly non-partisan claim that most were excluded because of pending financial corruption charges.
Another superlative is the historic low voter turnout. It was officially put at 42.6%; yet, in reality, it is believed to be much lower, with some estimating it to be half as much. In the 2016 parliamentary elections, the official turnout was 61.8%. The hardliners are usually believed to represent only 15% of the population, who remain loyal to the system because of ideological persuasion and/or material benefits. Thus, a high turnout has usually benefited reformists.
The low turnout this time around is a major blow to the regime as a whole, but especially to the Supreme Leader who had argued that the election results will define the ruling system’s very ‘prestige’. The reduced participation was despite an unprecedented campaign led by state media and the Supreme Leader to urge people to vote, portrayed as a national and religious duty to protect the nation from its omnipresent enemies; despite various coercive elements conventionally deployed by the state to persuade people towards the polling stations (from bussing in military conscripts to hidden fears by segments of society that not voting will negatively impact their access to state allocations and job prospects); and despite the voting period being extended by several hours. Hence, the low turnout is a reflection of a general public mood toward a ruling system seen by many as increasingly illegitimate, incompetent, and anathema to the interests of many citizens.
The low turnout was rationalised by Interior Minister Abdolreza Rahmani-Fazli as reflecting the prevalent social mood in the country and people’s deep discontent and disillusionment following the nationwide anti-regime protests of January 2018 and November 2019, and, more recently, the January 2020 downing of a passenger jet, killing all 176 on board, with authorities having lied about their responsibility for three days.
The Conservative victory
Conservatives won 230 of the 290 parliamentary seats, including all 30 in Tehran (where not a single MP was re-elected), while reformists won sixteen seats. The Hope Faction, which supports President Hassan Rouhani and is headed by reformist Mohammad-Reza Aref (who had topped the Tehran results in the 2016 parliamentary elections, but decided not to run this year) is believed to have lost more than 90% of its MPs (with only seven MPs in the next parliament instead of the current 120), while the entire moderate camp is believed to have won a maximum of fifty seats. The parliament will thus completely be transformed, with less than one fifth of sitting MPs represented in the next Majlis.
In the capital, Mohammad-Bagher Ghalibaf, a former Tehran mayor with higher political ambitions, topped the list with over a million votes. In contrast, in 2016 all Tehran MPs got more than a million votes, indicating the widespread stayaway in the capital city in 2020. The victors in Tehran were, thus, the conservative camp and Ghalibaf.
The wider conservative camp, composed of numerous factions, emerged victorious, with the Islamic Revolutionary Guard Corps (IRGC) as its most powerful institution expected to further gain ground and Ghalibaf, the most successful conservative candidate, well positioned for higher political offices. With its new power over the parliament, the IRGC could extend its current dominance in the military, intelligence, and economic spheres onto the political one, making the military-rule component in the Islamic Republic more pronounced.
The mass disqualifications and the low turnout may signal a miscalculation on the part of the ultraconservatives, as well as their sense of hubris – due to a large extent to the moderate camp’s weaknesses and failures. The miscalculation is because this election could end a rather well-functioning safety net meant to channel public discontent, and a mechanism for regime resilience, namely, offering the choice – as many Iranians refer to it – between a lesser and a greater evil (i.e., the moderates or reformists against the hardliners). However, despite the conservative camp’s victory, its sense of hubris ahead of the elections had allowed for fiercer confrontations and contradictions within it openly, which might play out in the next years. The conservative camp includes three main factions, which both compete and cooperate with each other:
Ghalibaf future president?
The most prominent figure emerging from the elections is Ghalibaf, whose Proud Iran (Iran-e Sarboland) list, uniting many principlists and critics of the Rouhani administration, had fielded thirty candidates. He ranked first in Tehran, and is thus poised to assume the powerful position of parliamentary speaker, which he could use to position himself as the next president. Ghalibaf had failed to win the presidency thrice: 2005, 2013, and 2017. He began his career in the security-military establishment, then delved into the economic and political spheres – most of which was closely connected to the IRGC. During the Iraq-Iran War, he held chief commander positions in several brigades and divisions. After the war, he became managing director of the IRGC’s engineering arm, Khatam-ol Anbia, the main economic entity of the Guards since then-president Rafsanjani integrated them into the post-war reconstruction economy, and which has developed an economic empire of its own. Ghalibaf was later appointed by Khamenei as the commander of the IRGC air force (1997-2000); became chief of police (or the Law Enforcement of the Islamic Republic of Iran, or NAJA, 2000-2005); more recently, mayor of Tehran (2005-2017); and is currently the Expediency Council’s Economic Commission Deputy. In 2001, he obtained a doctorate in political geography from Tarbiat Modares University in Tehran, with a dissertation entitled Analysis of the Local State in Iran.
With a security background, Ghalibaf’s political agenda combines economic populism, technocratic management (he was largely seen in this light during his twelve years as Tehran mayor) and militaristic nationalism (during the parliamentary campaign, he played on his close friendship with the late head of the IRGC’s Quds Force, General Qassem Soleimani, during the Iraq-Iran War). Given more extremist elements within the conservative camp, he will have a good chance of becoming president as a ‘’lesser evil’ option.
Facilitating talks with Washington
For Iran’s regional and international friends and foes, the historic low turnout, which did not escape their attention, indicated the depth of the regime’s legitimacy crisis, while the hardliners’ victory signalled the political trajectory to be expected. There is little chance of foreign policy changes as a result of these elections. Until the 2021 presidential elections, it is likely that there will be a duality of voices from Tehran: a moderate one from the Rouhani administration and a hardline one from other institutions (the IRGC and, now, the Majlis). Both voices operating in tandem have usually demonstrated their usefulness for the regime and the Supreme Leader.
Contrary to conventional thinking, the hardliners’ increasing grip on power might actually help facilitate talks with the USA; such talks are indispensable given Iran’s desperate need to unshackle itself of US sanctions for the sake of regime stability. One major reason for such a scenario, which may play out only after the US and Iranian presidential elections, is that a key impediment to hardliners’ rejection of an opening with the West or negotiations with Washington would be removed. Currently, hardliners’ concern is that an opening to the West, a process which will be negotiated by their rival elite moderate forces if the president is from that camp, would endanger or not sufficiently guarantee their politico-economic and ideological interests. Such concern may just be the result of paranoia; after all, the Supreme Leader supervises and controls any such process of negotiations, thus acting as a guarantor of his hardline allies’ interest.
No redistributive measures
There might be more bold attempts by the future conservative parliament to unseat important figures of the moderate administration, but this is unlikely to be supported by the Supreme Leader – given the aforementioned benefits for the balance of a duality of elite voices. Regarding state-society relations, the gulf between the two sides will likely widen, given the unlikelihood that people’s socioeconomic demands will be met in the short term, with US sanctions continuing unabated, and no major economic policy changes or redistribution of wealth on the horizon. Thus, the conservative camp’s victory may only be a Pyrrhic one for the Islamic Republic as a whole, and will probably prompt some soul searching within its strategic circles about how to deal with such widespread public alienation and disenchantment.
Ideally, a unified hardline camp could offer some socioeconomic relief to lower strata of the population, by utilising its unrivalled access to state and semi-state resources (which they largely control), even in the absence of US sanctions relief. The timing of such redistributive measures will be important: Doing so before next year’s presidential elections might inadvertently polish the tarnished image of the moderate Rouhani administration, increasing the moderate/reformist camp’s chances for his succession and thus diminishing their own. Thus, it is more probable that the hardliners’ parliamentary victory will further explicitly deepen the lame-duck performance of the current administration – soon entering its last year in office – in order later to increase their own political fortunes.
Down the road, the emerging dominant line in Iranian politics could be a kind of right-wing populism, i.e., promoting a discourse around delivering social justice without actually engaging in a redistribution of wealth, while the ideological role of nationalism will continue to rise relative to Islamism, potentially opening up some space (e.g., on the mandatory headcover for women) to absorb some public pressure, while repression against protests and civil society activism will continue unabated. In other words, the IRGC acting – or pretending to act – as iron-fisted modernisers. Be that as it may, a de facto military dictatorship will also have a hard time satisfying the population’s desire for more social equality and political freedoms. A key variable would be if any emerging political regime can maintain the current gulf between the lower classes and the middle class by playing their respective priorities against each other. In the meanwhile, as long as the coronavirus crisis rages in Iran, it is likely to impede the re-eruption of large-scale popular mobilisation, especially by the middle class, thus entrenching the feeling of resignation and despair among many.
The election results also reinvigorated discussions about the fate of reformism in Iran, most notably about whether the moderate and reformist camps’ losses could spell the ultimate demise of the already crisis-ridden reformists; in other words, whether their losses will be the kiss of death for the reformist-conservative duality within the Islamic Republic’s political establishment. Over the years, Iran’s reformists have experienced a significant loss of legitimacy among the social bases that had previously supported them, as a result of not only of the hardline camp’s combined opposition, repression and sabotage against them, but, also, and more importantly, of their own shortcomings to deliver on their political and economic promises. This has led to the belief that rather than constituting an agent of change from the top, the reformists have squarely positioned themselves within the establishment and against large sections of the population. In fact, for the first time, during the nationwide anti-regime protests since December 2017, they have been subjected to popular anger equally with the conservatives.
Against this backdrop, the future of reformism may involve two scenarios.
Such a move by conservatives to reintegrate the reformists could be deemed even more necessary if public perception would be that even a more powerful post-parliamentary election conservative camp had failed to address people’s grievances. In fact, the mass disqualification of reformist candidates led to disunity in the reformist camp, from some boycotting the elections to others participating (e.g., the former reformist president, Mohammad Khatami, whose public activities since the 2009 Green Movement have been heavily restricted by regime hardliners but who was shown casting a ballot in these crucial elections), potentially a signal of some among the reformists willing to forge a coalition with the conservative camp, or, at least, with those closest to the moderates.
The US assassination, on 3 January 2020, of Major-General Qasem Soleimani, head of the Quds Force unit of Iran’s Islamic Revolutionary Guard Corps (IRGC), greatly intensified tensions in the MENA region, taking it, by some accounts, to the brink of war. Iran responded five days later with attacks on American troops in Iraq, and will likely use its allies and proxies to undertake further attacks on US soldiers stationed in Iraq, thus maintaining a low-level war of attrition, less intense in the days after Soleimani’s assassination, but a longer-term strategy.
The assassination followed and intensified a series of incremental and escalating indirect attacks by Iran and the USA on each other’s interests in the MENA region, especially after the 2018 US withdrawal from the Joint Comprehensive Plan of Action (the 2015 Iran Nuclear deal), and more so after around March 2019, when Iran decided to respond more assertively to the US withdrawal. The USA subsequently accused Iran of increasing its support to armed groups in Iraq, Syria and Yemen; and of being involved in the May 2019 Fujairah sabotage of four oil tankers, and an attackon Saudi Aramco facilities in Al-Qaiq and Khuraise in September 2019. Both the tanker and the Aramco attacks were blamed on Iranian-backed groups. Contributing to a tense situation, The USA deployed a carrier strike-group to the gulf in May 2019, increased its troop presence in the region, and resolved to no longer grant oil wavers to countries purchasing Iranian oil.
However, neither Iran nor the USA wants an all-out war. Instead, the USA will continue pressuring Iran through current and further sanctions, while Tehran and its allies will conduct numerous low-level actions aimed at disrupting US operations and interests. Further, two of Iran’s main rivals in the region, Saudi Arabia and the UAE, have stretched their resources over the Middle East and North Africa, and have realised that they cannot rely on the USA to fight their battles with Iran. Both have thus made overtures to Tehran, especially after the tanker and Aramco operations; Riyadh advocated de-escalation after Soleimani’s assassination, and is negotiating an end to the Yemeni conflict.
Roots of current tensions
Iran and the USA have had long-standing tensions, heightened after the US role in the coup against Iran’s democratically-elected president, Mohammad Mosaddegh, in 1953. The ouster was supported, financially and diplomatically, by the CIA and the Eisenhower Administration. The Shah, whose powers were then strengthened, making him an absolute ruler, was subsequently propped up by successive US administrations through the 1960s and 1970s.
Relations between the two states further deteriorated after the 1979 Islamic Revolution, which forced the Shah out of power and into exile. He was granted asylum in the USA, prompting Iranian students to storm and besiege the US embassy in Tehran in November 1979, holding US diplomats hostage for 444 days. The USA imposed an economic embargo on Iran, and US sanctions have progressively been strengthened over the past forty-one years. Washington also actively supported Saddam Hussein in Iraq’s eight-year war against Iran, which sought to overthrow that country’s new government, and resulted in a million deaths.
In 2011, the USA, prodded by Israel, added sanctions on Iranian oil as a means of pressurising Iran to halt its nuclear programme. Since Donald Trump’s entry into the White House in 2016, relations between USA and Iran have mainly been related to or a consequence of Trump’s withdrawal from the 2015 Iran Nuclear Deal or Joint Comprehensive Plan of Action (JCPOA). The American president hoped to pressure Tehran to negotiate a more comprehensive agreement with him, to also address its support for groups such as the Houthi and Hizbullah, and the Syrian regime, as well as Iran’s ballistic missile capability. US allies Saudi Arabia and the UAE have used their economic clout, purchasing large quantities of American weapons, to convince Trump to maintain pressure on Iran. The Saudis successfully slowed down the initial JCPOA negotiations in 2013 by using its arms’ purchases to lobby France to demand more restrictions on Iran’s Arak reactor and on Tehran’s stockpile of uranium.
In 2018, after pulling out of the JCPOA, the USA began instituting new sanctions on Iranian companies, and, more significantly, decided not to issue new waivers on the import of Iranian oil, a key source of foreign exchange for Iran. These waivers previously allowed certain countries, such as Turkey, South Korea, Japan and India, to purchase Iranian oil. Then, in April 2019, Washington declared the IRGC a terrorist organisation, the first time the administration had labelled an entire military arm of another state in this way. Trump also deployed an additional 3 000 troops to the region, including an aircraft carrier and destroyer group. He imposed additional sanctions on Iran and Iranian officials, including on Iran’s supreme leader, Ayatollah Ali Khamenei and on its chief diplomat, Iran’s foreign minister Mohammed Javad Zarif, severely limiting his ability to travel within New York.
With an economy ravaged by the sanctions, rebellion from hardliners within the regime, and because of the failures of the EU’s proposed special purpose financial vehicle, which was supposed to facilitate the circumvention of US sanctions, the Rouhani administration began to incrementally reduce its compliance with the JCPOA, hoping to pressure the EU to comply with its side of the agreement and to ease trade and investment with Iran. This series of violations is what Iranian deputy foreign minister Abbas Araqchi referred to as a ‘rebalancing’ of, rather than a withdrawal from, the JCPOA. Tehran will still allow International Atomic Energy Agency (IAEA) officials to inspect its uranium enrichment facilities, has not (yet) increased the level of enrichment to twenty per cent, and has not sought to repurpose the design of its Arak nuclear reactor to process plutonium. This suggests the country wants to salvage the JCPOA, but wants compliance form other partners, especially the EU.
The EU responded by declaring a dispute under the JCPOA. Little will result from this, since any decision on imposing sanctions on Iran will need to be adopted by the UNSC in which Russia and China, both Iranian allies, hold veto powers. A key factor in Iran’s favour is that it has not enriched uranium to twenty per cent – the level which would radically decrease the time and effort required to enrich to weapons-grade ninety per cent.
Tehran has deployed mobile short-range missiles on naval vessels in the Gulf, in Iranian waters, in response to Washington’s deployment of an aircraft carrier and destroyer group to the region. Iran also used its proxies, especially the Hashd al-Shabi (Popular Mobilization Forces/Units) in Iraq and the Houthi in Yemen to attack US troops and interests in the region, and in June 2019 Tehran shot down an American Global Hawk surveillance drone, one of only four the USA possessed at the time.
Soleimani assassination – on a knife edge
On 3 January 2020, the USA military assassinated Soleimani and Abu Mahdi al-Muhandis, one of the most influential leaders of Iraq’s Popular Mobilisation Forces (PMF), largely supported by Iran. The assassinations, widely recognised by international scholars – including the UN Special Rapporteur for Extrajudicial, Summary or Arbitrary Executions, Agnès Callamard – as being illegal under international law, and even domestic US law. The White House initially claimed the assassination was a pre-emptive strike because Soleimani had been planning ‘imminent attacks’ on US interests, including American embassies in the region. This claim proved to be hollow, with even the US Defense Secretary, Mark Esper, stating that no evidence existed around the imminence and targets of the supposed plans.
Soleimani’s influence and popularity meant that the assassination was especially contentious for both Iran and the USA. He had been the key person involved in providing advice, training and weapons to Iran’s allies in Syria and Iraq, and coordinating between Iran and various PMF forces in Syria and Iraq, as well as with Hamas and Hizbullah. He was also revered by many Iranians who credited him with preventing the Islamic State group (IS) gaining a foothold in Iran. But he was also despised by many Syrians and Iraqis for his role in protecting regimes in their countries. Critics also blame him for Russia’s entry into the Syrian civil war, arguing that his July 2015 meeting with Russia’s president, Vladimir Putin, secured Moscow’s aerial support for the Syrian regime, without which it might have fallen. In Iraq, Soleimani consolidated support in the past few months for the Adel Abdul Mahdi administration, which has been accused of corruption and ineptitude, and which has violently cracked down on protests, killing hundreds.
Soleimani had previously worked with the USA in Afghanistan and Iraq. In the former, Soleimani coordinated certain activities with the USA in the fight against the Taliban, which both viewed as an enemy. The ‘relationship’ broke down, however, after then-US president, George W Bush, named Iran as part of an ‘axis of evil’ in 2002. Later, in Iraq, Soleimani was the point person dealing with the USA for Iran, including in discussions to form the Iraqi governing council, which took office in July 2003, and in 2009-10 to install the Nouri al-Maliki government.
After Soleimani’s assassination and funeral, which millions of Iranians and Iraqis participated in, Iran had to respond to the US aggression. Tehran decided on a two-pronged approach: a direct attack, in its name, on US troops, and a longer war of attrition with the USA through its partners and proxies. The direct response was through the attacks on the Ayn Al-Asad Airbase, west of Baghdad, and on the Irbil base, which host US troops, using around twenty Fateh and Qaim ballistic missiles on the 8 January 2020. Before the attack, the Iranians stressed that they would target only US military interests. They also informed the Iraqis which bases would be targeted. The warning, coupled with the fact that Iran conveyed a message to the USA, first via a Swiss back channel and later publicly, that this was the totality of its response, suggests that Tehran sought immediate de-escalation. The ‘indirect’ responses began soon after, in Iraq, with rockets launched at bases hosting US troops and even a the American embassy, but ensuring there were no casualties. Such attacks will likely continue, in Iraq and perhaps also in Syria and Yemen, targeting either US interests or those of its allies.
Run-up to the assassination
Before Soleimani’s assassination, regional tensions had been increasing. On 12 May 2019, four oil tankers belonging to Saudi Arabia, the UAE and Norway, were sabotaged off the UAE port of Fujairah; two days later, Houthi drones damaged Saudi Arabia’s reserve oil pipeline in Riyadh province, forcing its closure. While no one claimed responsibility for the tanker attacks, the Norwegian insurer alleged that the shrapnel from the explosions displays similarities to shrapnel from IEDs used by Houthi fighters in Yemen. Further, a Saudi-UAE-Norwegian investigation alleged ‘state involvement’ in the sabotage.
A month later, Iran shot down an American drone that had entered its airspace. Trump initially contemplated retaliatory airstrikes on Iranian missile defence systems, but later stood down. Then, in September 2019, precision drone and missile attacks on Saudi-Aramco oil facilities in Al-Qaiq and Khuraise forced a shutdown of over half of Saudi Arabia’s oil capacity, resulting in a loss of over two billion dollars. Although Yemen’s Houthi claimed the attack, a UN report suggests that the missiles originated from the north, likely from Iraq.
The USA and Israel responded by increasing attacks on Iranian troops in Syria, killing scores of people. US strikes were more limited than Israel’s, commencing in December 2019 after the death of an American contractor in a PMF attack on a military base in Iraq. Israel was more blatant, continually violating Lebanese and Syrian airspace, and launching missiles at Iranian assets in Syria. The USA also increased its troop deployment to the region, and dispatched more naval hardware to the Gulf.
Gulf countries, specifically Saudi Arabia and the UAE, shocked by what they saw as a lack of an adequate response by the USA to the tanker and Aramco attacks, and believing they could no longer rely on the USA for protection, responded through attempts at rapprochement with Iran. Riyadh sought to initiate indirect talks with Iran, having Iraq and Pakistan simultaneously acting as mediators. The UAE also sought to negotiate with Iran. In August 2019, in the aftermath of the Fujairah attack, a maritime border agreement was concluded between the UAE and Iran, regarding Abu Dhabi’s access to sea lanes. It is worth noting that the UAE’s Jebel Ali port is the largest in the region, while DP World, an Emirati port operator is the fourth largest globally. Abu Dhabi is thus invested in maintaining and enhancing sea lane access as a means of both economic growth and military influence.
In September 2019, Riyadh entered direct talks with the Houthi; Saudi coalition airstrikes in Yemen decreased by over eighty per cent in November 2019; and hundreds of prisoners, including around 130 in besieged Taiz, were exchanged between the two parties as a confidence-building measure. Further, the perceived lack of American support also saw Saudi Arabia commence negotiations to end the Qatar blockade, which Riyadh – along with the UAE, Bahrain and Egypt – imposed in 2017. Although differences still remain, the blockade has weakened at a diplomatic level with the Saudi, Emirati and Bahraini teams attending the Gulf Cup in Qatar in November 2019, and Qatar’s prime minister, Abdullah bin Nasser bin Khalifa Al Thani, attending the annual GCC Summit in Saudi Arabia in December 2019. A ‘cold peace’ between the two sides is likely soon to emerge.
It seems that both the USA and Iran, and regional heavyweight Saudi Arabia, do not want an all-out confrontation, especially since Iran possesses powerful military assets that can cause real damage, and Iran seems willing to use these. Saudi Arabia called for calm after Soleimani’s assassination, while Israel’s prime minister, Benjamin Netanyahu, shortened his trip to Greece and returned to Israel in an attempt to prepare for any Iranian response. Further, both the Iranian and American governments have cautioned against a war, even though Soleimani’s assassination had the potential to cause events to spiral out of control.
With 2020 being a presidential election year in the USA, Trump is unlikely to want a war (especially one that could result in a large number of American casualties) when a key promise of his 2016 campaign was to halt America’s wars and remove American troops from the Middle East. Even though he has not succeeded in this regard, Trump would not want the negative publicity that another war would bring, unless his popularity rapidly drops and he requires something to create a rally-around-the-flag effect.
For the moment, it seems as if Iraq will bear the brunt of these tensions, serving as a key battleground between the USA and Iran, especially since it is dependent on both countries, and because it is seen by Tehran as falling within its sphere of influence. Soleimani was assassinated in Iraq, and Iran’s response was to target American troops in Iraq. The Iraqi protests over unemployment, corruption and for a restructuring of the political system have thus been overshadowed. The protests, which saw tens of thousands gather in December 2019 in opposition to the government, waned after the US attacks on PMF forces in Iraq in late December. More recently, the larger protests have been those calling for US troops to leave, rather than the earlier ones which called for Iranian influence in Iraq to be decreased.
Hassan Rouhani’s landslide victory in the Iranian presidential election on Friday, 17 May heralds a continuation on the country’s path towards global re-engagement, both on a popular level and in terms of economic and political cooperation. However, the intense campaign that preceded the election points to increasing tension between state institutions such as the presidency, and parallel institutions, including the Revolutionary Guard and parts of the clerical establishment, especially since presidents have previously frequently become more confrontational towards such institutions at the end of their tenures, as evidenced by former president Mahmoud Ahmadinejad’s fallout with Supreme Leader Ayatollah Ali Khamenei in 2011.
With a turnout of nearly seventy-five per cent, Rouhani’s victory, by a margin of twenty per cent over his nearest competitor, principlist cleric Sayyed Ibrahim Raisi, suggests an evolutionary shift within the calculus of Iranians. Although many citizens had previously abstained from voting as it had been seen as endorsing the system, Iranians, in particular those from younger and urban backgrounds, are increasingly turning to the electoral process to shape the country’s politics. Further, most citizens prefer non-violent, incremental changes to Iran’s governance structures. Trita Parsi observes that in most Iranian elections the system outsider has had the most appeal – Khatami in 1997 and Ahmadinejad in 2005 are examples – because Iranian citizens see elections as the only means of altering the country’s political trajectory. Significantly, Khamenei tacitly supported Raisi, especially in the weeks preceding the poll through criticisms of the nuclear deal and of Rouhani’s ‘unwillingness’ and ‘inability’ to implement a ‘resistance economy’. He also publicly confronted the administration over its acceptance of a UNESCO-developed education curriculum, which some saw as undermining gender roles, although the programme had been endorsed, with little opposition, in 2015.
Rouhani’s victory also benefited from the successful conclusion of the nuclear deal in 2015 – despite the less-than-expected foreign investment that followed – and the growth of Iran’s economy by over 10 per cent in 2016, which caused the riyal to appreciate. Fears over a curb in social freedoms if a principlist candidate were to win also influenced the poll, especially since candidates such as Raisi and Mohammad Bagher Ghalibaf had repressed dissent in the past.
Campaigning had been vigorous, and the candidates – especially Rouhani – crossed many ‘red lines’. The president blamed the Islamic Revolutionary Guard Corps (IRGC) for stunting the gains of the nuclear deal; the judiciary for its limits on freedoms; and the public news broadcaster for backing Raisi. He also offended the clergy by demanding that the largest Islamic charity organisation, Astan Quds Razavi, headed by Raisi, be subjected to tax compliance. He further accused the IRGC of crowding out private business. Raisi and Ghalibaf conversely pointed out the nuclear deal’s failings, corruption and recent increases in unemployment during Rouhani’s incumbency. This is typical of Iranian politics, where intense competition for positions increases openness, accountability and criticism, especially in electoral years. The system thus provides room for and tolerates a diversity of opinions, despite vigorous vetting of candidates.
Although most power in Iran remains vested in the Supreme Leader, the president is able to shape most domestic and economic policies through his ability to appoint staff to key institutions, and because of the power he wields in formulating these. Further, in most instances the Supreme Leader prefers to maintain an image of political insulation, and usually contours his political pronouncements in line with popular sentiment, opting to work through informal institutions to realise his preferences. Rouhani’s victory will require him to continue his attempts of increased cooperation globally. This is despite the fact that Khamenei has become disenchanted with this stance, fearing potential reforms, and will act to inhibit it. Further, although many of Rouhani’s criticisms of the IRGC, judiciary and clerical establishment in the regime were politicking, these direct and sharp criticisms and the tendency of Iranian presidents to seek to empower their office in the second term will escalate confrontation between these competing centres of power. This will especially be the case as Rouhani considers his legacy, which is important for Rouhani since seventy-eight-year-old Khamenei reportedly suffers from cancer, and it is reliably believed that Rouhani (and Raisi), wish to succeed him. Therefore, Rouhani tacitly criticised the IRGC and the judiciary in his victory speech, acknowledged his support for the popular reformist cleric and former president Mohammad Khatami (1997-2005), and promised to negotiate directly with the Trump administration for the removal of non-nuclear sanctions.
At a regional level, Rouhani’s victory will not drastically alter the Syrian and Yemeni conflicts, although the administration seems to prefer political solutions to both. Khamenei and the IRGC largely control foreign policy, particularly in this arena. The Iranian-Saudi cold war will likely endure, especially since the Saudi monarchy continues to replenish its military capacity, and because the Trump administration’s pronouncements have emboldened hawks on both sides. Rouhani’s victory will, however, guarantee the maintenance of the nuclear deal, and intensify the administration’s attempts to increase its economic benefits. This will be challenging, especially since the USA is unlikely to remove its ‘non-nuclear’ sanctions component, which has so far complicated efforts to invest in the country and caused its economy to remain sluggish. Rouhani will need to consider domestic measures, such as enhancing productivity and cracking down on corruption, to stimulate economic growth.
Despite Rouhani’s massive victory, he will face constraints both from Iran’s complex governance structure and regional ructions. Significantly, Raisi’s populist rhetoric, including pledges to increase subsidies and create jobs, attracted over 15 million votes (thirty-eight per cent). If Rouhani fails to fulfil his campaign promises, we will see a rise in opposition numbers, opening the doors to a principlist resurgence.
By Afro-Middle East Centre
The decision by the Gulf Cooperation Council (GCC) on 2 March declaring Hizbullah a terrorist organisation is the latest in a string of moves by Saudi Arabia to blunt the perceived increase in Iran’s regional influence. The resolution will have dire consequences for Lebanon’s already fragmented and gridlocked institutions, but may have an effect opposite to that intended by the GCC; it could push Lebanon further into Iran’s orbit.
The GCC verdict followed Saudi Arabia’s decision on 19 February, which halted its four billion dollar aid to Lebanon’s state security institutions, and the subsequent GCC states’ ban on their citizens from visiting the country. At the heart of these decisions is the perception of increasing Iranian influence in Lebanon, especially after the nuclear deal between Iran and the P5+1 world powers. GCC states were furious over Beirut’s decision not to endorse an Arab League and Organisation of Islamic Cooperation statement criticising attacks on Saudi diplomatic offices in Tehran in January. Lebanon’s dissociation from international actions that may interfere with its fragile sectarian balance is seen by the increasingly assertive Saudi regime as a sign of Beirut’s proximity to Iran. Saudi Arabia believes this proximity is proven by the inability and unwillingness of the Lebanese Armed Forces (LAF) to disarm Hizbullah, and by the group’s activities in Syria. Saudi officials had already conveyed these concerns to Lebanon’s deputy prime minister and defence minister, Samir Mouqbel, in January, and had indicated that Saudi Arabia might reverse its decision if Lebanon were to change course.
The Saudi move will seriously impede Lebanon’s economy, which is heavily reliant on GCC tourism, investments, and five billion dollars in remittances sent by Lebanese nationals working in the Gulf. These remittances will dry up if GCC states act against the 750 000 Lebanese workers. It is possible that the GCC will impose further sanctions on Lebanon, which will be disastrous since the country relies on Gulf support to maintain its banking sector and currency.
However, these measures may have the opposite and unintended impact of pushing Lebanon closer to Iran. Already the Islamic Republic has offered to compensate for the shortfall if Beirut officially requests assistance. Further, those most affected, ordinary Lebanese citizens, may become disillusioned with the GCC – particularly Saudi Arabia. Ultimately, the measures will have little effect on Hizbullah, which is not reliant on GCC funds for its social service, patronage or any other activities, and because this will further increase the chasm in weaponry and training between it and the LAF. The party has thus confidently criticised the GCC, suggested that GCC states were cooperating with Israel, and pointed out that the GCC decision would have a harsher impact on average Lebanese nationals.
The Saudi and GCC positions will not collapse Lebanon’s confessionalist political system, whose sectarian nature prevents strong parties from dominating political institutions. Power balancing and coalition formation are promoted through the stipulation of cabinet and government positions on a sectarian basis. Although many within the March 14 coalition – Hizbullah’s rivals – have supported Saudi Arabia and criticised Hizbullah, talks to elect a president have continued between March 14 and the Hizbullah-led March 8 coalition. Lebanese politicians benefit from the system, and fear that too strong appeals to identity politics could result in a situation similar to that which sparked Lebanon’s fourteen-year civil war in 1975. Further, global powers – including the USA and France – regard Lebanon’s stability as paramount, especially in light of the growth of the Islamic State group, and have acted to mitigate the effects of the GCC decision by offering to mediate between the two parties.
What the GCC and Saudi positions indicate is an increasing willingness – especially by Saudi Arabia – to adopt aggressive stances to weaken Iran and ensure GCC allies close ranks – as happened in January when Saudi allies severed ties with the Islamic republic. Small and relatively week states such as Lebanon and Yemen will increasingly be forced to support one or other side in this Cold War-like regional atmosphere. In Beirut’s case the risk is larger because of the spillover of the Syrian conflict into Lebanon, especially with Hizbullah’s involvement in Syria. The Lebanese political establishment needs urgently to resolve its political problems, elect a new president immediately since the twenty-two month wait for a consensus candidate has imperilled much of the country’s institutions, and citizens have been forced to resort to patronage and sectarian networks to ensure the partial provision of state services.
By Afro-Middle East Centre
The International Atomic Energy Agency’s 16 January certification that Iran had complied with the provisions of the Joint Comprehensive Plan of Action (JCPA) negotiated between it and world powers over its nuclear programme means that sanctions relief would be forthcoming, will have substantial regional and global consequences.
Even prior to the deal’s conclusion, Saudi Arabia and certain members of the Gulf Cooperation Council (GCC) had expressed dissatisfaction and had resolved to intervene in Yemen, and to increase support to Syrian opposition groups. Fears of a resurgent Iran after the lifting of sanctions have led to many GCC members downgrading ties with Iran and reequipping their armed forces. Iran’s compliance with the deal has also reduced the probability of an Israeli air offensive against the Islamic Republic over fears of an international backlash. However, Israel’s weakened regional position and difficult relations with the Obama administration will increase covert relations between it and Saudi Arabia. Globally, increased Iranian oil and liquefied natural gas supplies have helped lower energy prices, and diplomacy and the nuclear non-proliferation treaty have been strengthened.
The deal is also triggering a significant effect domestically. Polarisation between Iranian institutions wary of relations with the West, such as the Islamic Revolutionary Guard Corps (IRGC) and those, such as President Hassan Rouhani and foreign minister Mohammad Javad Zarif, who have worked to improve Iran’s international standing, have increased. At the core of this is the fear among some that Rouhani seeks to liberalise Iranian society, and that the nuclear deal is the first step in a wider détente between it and the USA, which some perceive as posing a threat to the character of the Islamic Republic. Some in this camp are still distrustful of the role played by Rouhani’s benefactors after the disputed 2009 presidential election. Flexing its muscles, the IRGC, in the past three months alone, performed two missile tests, allegedly fired at an American aircraft carrier in the strait of Hormuz, and captured and later released ten American Navy personnel who had traversed Iranian territorial waters. Some referred to the deal as nuclear sedition, while others argued that the country had conceded too much. The Supreme Leader, Ayatollah Ali Khamenei, has adopted a more balanced position, supporting the negotiations while remaining critical of America and other western states.
Polarisation has been compounded by two impending elections in February: a parliamentary election, and the election for members of the Assembly of Experts. The latter body, whose members serve for eight years, appoints the supreme leader. Since it is believed that seventy-four-year old Khamenei may not survive the next eight years, the next assembly will likely choose his replacement, making this election extremely critical. Rouhani’s ally, the influential Akbar Hashemi Rafsanjani, has announced he will attempt to again become head of the Assembly, and seeks to empower it by granting it a supervisory role over the next supreme leader. Such a change will qualitatively alter Iran’s governance structures. This has been interpreted as posing an internal threat to the regime by some Iranians who view him as a ‘seditionist’, and have sought to minimise his role in the country’s governance.
Sanctions relief, a core tenet of Rouhani’s 2013 electoral platform, will likely result in increased popular support for reform-minded members in the parliamentary election, and Rouhani’s re-election in the 2017 presidential poll. Conservatives in the Guardian Council – which vets electoral candidates – have thus disqualified most Rouhani supporters wishing to contest the February poll. Only thirty-three of the over 3 000 Rouhani supporters were approved to run in February.
Economically, sanctions relief will aid Iranians and encourage development. The 100 billion dollars in unfrozen assets (thirty billion of it almost immediately) will boost government revenue, and assist it to compensate for the declining oil price. Relief from financial sanctions will foster investment, and increase the number and variety of consumer products. More than 140 business delegations have already visited Iran since the deal’s conclusion in June 2015. Manufacturing, energy, and transportation have attracted the most interest, and conglomerates such as Alstom, Eni, Renault and Ericson had expressed interest before the agreement was signed. Iran will, however, have to deal with corruption and inefficiency issues to fully benefit from sanctions relief. Further, the low oil price, which accounts for most government revenue, will reduce benefits gained from increased oil production and increasing sales. Economic liberalisation, one of Rouhani’s aspirations, has become more possible in light of potential new investment, but will likely increase the double-digit inflation rate, impacting on the country’s poor and lower middle classes. This will be felt once the jubilation and relief over the lifting of sanctions wears off. Significantly, the opening up of the country’s economy will impede the influence of the IRGC, which is heavily involved in the Iranian economy, and which will have to compete with foreign companies.
None of this poses an existential threat to the regime and the governance institution of the velayat-e-faqih. Despite the seeming contradictions, elite consensus continues to favour the system. Rouhani and his ilk do not seek the system’s dissolution, but hope economic and cultural liberalisation will ensure its survival. They therefore participated in electoral processes even after the 2009 election and subsequent crackdown, many of whose targets are still behind bars. Rouhani is, after all, a confidant of Khamenei, who appointed him to the Supreme National Security Council. Moreover, the system is still viewed favourably by most citizens, with seventy-two per cent participating in the 2013 presidential election. Although the nuclear deal’s greater impact will be on the regional and international stages where a Cold War-like atmosphere is developing between Saudi Arabia and Iran, its domestic implications will also be noteworthy in shaping the country’s societal and political evolution.
By Afro-Middle East Centre