Everything’s coming up Rouhani…for now

Hassan Rouhani has good reason to smile at the moment

Forgive me for being a couple of weeks behind on this story, but Iran held the second round of its parliamentary election on April 29. This was a runoff round for 68 seats for which no candidate was able to get at least 25% in the first round, held on February 26. The result, as it was for the first round, was a fairly decisive victory for the pro-JCPOA/pro-Rouhani coalition of reformers, moderates, and conservatives (which I call “moderates,” for simplicity’s sake, even though that’s somewhat misleading):

But of the 68 seats being contested Friday, 36 went to the pro-Rouhani List of Hope coalition and 17 to conservatives with just four constituencies yet to be declared, according to official results.

That would give reformists at least 131 seats in the new 290-member parliament, 15 short of a majority but more than their rivals’ 124 MPs. Remaining seats went to independents who could hold the balance of power.

Al-Jazeera is using the term “reformists” very loosely here; not all, or even most, of Rouhani’s support comes from those who want to fundamentally reform Iran’s clerical system. And you’ll also note that they’re qualifying the tally by saying that Rouhani’s supporters will have “at least” 131 seats in the next parliament. This is because Iran’s political system doesn’t have a strong party ID component to it, and so it’s often difficult to know where any particular MP might fall on the political spectrum. There are other analyses that have given Rouhani’s supporters more seats, though still not enough for an outright majority. Iran expert Ali Vaez looks at the results slightly differently:

Iran’s political landscape can be divided into four camps: those who prioritise the system’s republican institutions (republicans) and those prioritising its theocratic bodies (theocrats). The former camp is generally aligned with President Rouhani and former President Akbar Hashemi Rafsanjani, while the latter takes its cues from Supreme Leader Ali Khamenei. Each camp is further divided into pragmatists and radicals, or those who seek, respectively, more gradual or faster change. With this in mind, I would argue that the new parliament is composed of 123 republicans (almost all pragmatists), 80 theocrats (mostly pragmatists, with a few radicals) and 84 independents.

This represents a significant change in the parliament’s makeup, though Rouhani will have to win some support among that large bloc of independents in order to build a working majority. Many of Rouhani’s most vocal critics lost their reelection bids, which only adds to the significance of the change. But as Vaez says, the degree to which this really matters in Iranian politics is debatable; hardline/theocratic elements, i.e., those opposed to Rouhani, still control more levers of power than Rouhani and his allies, even if the new parliament becomes a reliably pro-Rouhani one. And at the top of the pyramid sits the Supreme Leader, Ayatollah Khamenei, who has at best been skeptical of Rouhani’s policies around the nuclear issue but willing to give him some leeway to pursue them. The two men clearly don’t see eye to eye when it comes to domestic matters.

But the election results are good news for Rouhani for no other reason than they represented a public referendum on his first term in office, and the Iranian electorate clearly gave him a big thumbs up. With another presidential election probably less than a year away, Rouhani’s chances of being reelected are looking pretty good. But a lot can happen even in a few months in politics, and Rouhani needs some positive economic news in order to ensure a positive result next year. There has been a bit of that recently; Iran recently announced that its non-oil exports ran a surplus over the past year (the Iranian new year starts on Nowruz, or March 20) for the first time since the Islamic Revolution. That could be spun as good news, though it’s not unambiguously good, and it’s also got to be tempered by the fact that low oil prices are limiting growth in Iran’s oil export revenues (this frank appraisal of Iran’s economic fortunes given today in a speech by IMF Deputy Managing Director David Lipton to Iran’s central bank is getting some attention). What Rouhani really needs is some clear sign that Iran’s economy is turning a corner, particularly if that sign validates his efforts in securing the nuclear deal. He’s not really getting anything like that right now, partly due to uncertainty around continued US sanctions on Iran and partly due to uncertainty around the Iranian financial system.

While most American firms, particularly banks, are still prohibited from doing business in or with Iran due to non-nuclear sanctions, European firms, including banks, were expected to rush into the Iranian market as soon as sanctions were lifted. And while the Bomb Bomb Iran caucus doesn’t want to see that happen, the Obama administration should be encouraging those European firms to start doing business with Iran, because the economic boost that would mean for Iranians would, again, validate Rouhani’s signature achievement (the JCPOA) in the eyes of Iranian voters. (While American hawks labor under the belief that the Iranian clerical system is a hair’s breadth from collapse and just a little more international pressure will do the trick, there’s no evidence to suggest they’re right. Rouhani’s pragmatic/moderate conservatism is the best Iranian political outcome that the US can hope for, and American policy should support Rouhani when feasible.) Unfortunately, the administration hasn’t done nearly enough to work with European companies to make it clear exactly what kinds of potential Iranian investments are now OK and what kinds might still run afoul of other US sanctions, and consequently those European companies have largely decided that getting involved with Iran is still too big a risk. But those European firms are also, not without cause, worried about investing in an Iranian economy that still has considerable issues around transparency and corruption, and that’s a problem that only the Iranians themselves can alleviate.

There also continues to be a concern over allowing Iran limited access to the US dollar for the purpose of conducting international business transactions. JCPOA opponents, mostly Republican, are fighting any attempt by the Obama administration to get around US sanctions that bar Iran from doing business in dollars, which is shutting Iran out from a considerable amount of international commerce. The opposition isn’t exactly being assuaged by Iran’s ongoing ballistic missile tests, which may (it’s debatable) violate the JCPOA but definitely violate other UN Security Council resolutions. But the barriers preventing Iran from accruing the full benefit of the JCPOA and sanctions relief are being used as anti-West propaganda by hardliners inside Iran, and if that propaganda starts to sway Iranian popular opinion it will certainly hurt Rouhani’s standing. On top of all of these things, there’s the matter of the next US administration to consider. Of the two (presumed) nominees, Hillary Clinton at least says she’ll preserve the JCPOA (Donald Trump wants to scrap it altogether), but Clinton’s rhetoric on Iran suggests that her administration would be unlikely, at least initially, to use the JCPOA as a platform on which to build further US-Iran diplomatic engagement. So the US-Iran relationship is likely to take a step, or steps, backward in the near future. Read this Robin Wright interview with Iranian Foreign Minister Mohammad Javad Zarif for his (obviously biased but also obviously important) take on these issues.

Not everything about next year’s campaign revolves around the United States. Rouhani also has to contend with the power of Iran’s hardline Revolutionary Guard, with the fallout from Iran’s involvement in Syria, and with ongoing tensions with Saudi Arabia. To the latter point, there’s now a real change that Iranians will be prohibited from making the Hajj this September, as Tehran and Riyadh have so far failed to come to terms on logistical arrangements for Iranian pilgrims. It’s possible that some would-be Iranian pilgrims might blame Rouhani, even a little bit, if this impasse doesn’t get resolved.

Syria is also going to be an election issue, especially since the death toll for Iranians fighting there is starting to add up. Rouhani would be reluctant to say so publicly, but it’s likely that he’d prefer to drawn down Iranian involvement in Syria if he had his way–hell, there are signs that even Iran’s military hardliners are starting to look for a way to show Bashar al-Assad the door and get on with negotiating an end to the civil war. But Rouhani has no control over Syria policy; that’s being run by the Islamic Revolutionary Guard Corps (IRGC), which reports to Khamenei, not to Rouhani. The IRGC is probably the most powerful hardline organization in Iran, holding considerable economic leverage and political power, and it is deeply opposed to engaging the US. Rouhani may be trying to reduce the IRGC’s power–he’s proposed shifting some budgetary resources away from it and toward Iran’s comparatively neglected regular army–but a fight with the IRGC is a fight that Rouhani might not be able to win, so he’s got to tread carefully. And although casualties are mounting and, as I noted above, there are signs that even the IRGC wouldn’t mind cutting ties with Assad, they will nonetheless remain committed to bolstering the current Syrian government unless and until they can be convinced that Iran’s interests will be protected in a post-Assad Syria.

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