New Delhi Times, 19 June 2017
- Although Rouhani’s victory in the presidential election strengthened the legitimacy of the Iranian state, the increasing polarisation within Iranian society suggests that he will struggle to implement his domestic programme and will lack influence over foreign policy.
- US president Donald Trump’s administration appears unwilling to completely cancel the nuclear agreement with Iran, but it is likely to maintain non-nuclear sanctions, as part of a campaign of putting political and economic pressure on Tehran.
- Attempts by Saudi Arabia, the United States, and some Gulf states to isolate Iran are likely to challenge Rouhani’s ability to shape the country’s direction domestically and risk increasing its reliance on Russian support.
Iranian president Hassan Rouhani’s decisive victory in May’s election will have implications for Iran’s stability and for the region. Aniseh Tabrizi , Sophie Cohen , and Kevjn Lim assess the outlook for the Iranian nuclear agreement, Iran’s domestic policy, and regional relations during Rouhani’s second term.
Approximately 42 million Iranians turned out to vote in the country’s 19 May presidential election, with incumbent Hassan Rouhani achieving a decisive victory, winning 57% of the vote. Rouhani defeated conservative candidate Ibrahim Raisi in a poll that was, in effect, a referendum on the nuclear agreement concluded in 2015.
Known as the Joint Comprehensive Plan of Action (JCPOA), the nuclear deal struck between Iran and the five permanent members of the United Nations Security Council plus Germany has been a source of controversy in Tehran’s internal politics. However, during the run-up to the presidential election, even Rouhani’s conservative opponents highlighted the need to continue implementing the JCPOA, suggesting that it is gaining acceptance in Iran.
The president of Iran has only a secondary role in shaping the country’s direction on foreign and security affairs, over which Supreme Leader Ali Khamenei has the ultimate say. Khamenei, together with the other heads of the complicated ruling system of the Islamic Republic, is in charge of defining Iran’s ‘red lines’ on these matters. However, as president, Rouhani has a degree of room for manoeuvre in terms of framing the tactics adopted by his administration to ensure that those red lines are not crossed.
Therefore, during his second term in office, Rouhani is likely to continue prioritising engagement with the West, the renewal of Iran’s commitments under the JCPOA, and improved relations with regional neighbours. However, because of the internal balance of power and his lack of influence on regional policy, Rouhani’s administration is likely to be able to only partially determine Iran’s agenda for the next four years.
The outcome of the presidential election played a significant role in further increasing the domestic legitimacy of the government. With a 73% turnout, one of the highest in the history of the Islamic Republic, Khamenei could stress the popularity of the revolution 38 years on and highlight the strong roots of ‘Islamic democracy’ in the country.
The election’s result was even more significant given the absence of any reformist candidate. According to an Iranian academic who spoke to Jane’s in May on the condition of anonymity, “Despite the absence of reformist figures in the elections, by presenting Rouhani as the least worst option in comparison to Raisi and [conservative Mohammad Baqer] Qalibaf, the regime managed to drag even the grey voters [those who do not usually vote] to the ballot box, in turn increasing the legitimacy of the regime.”
This suggests that a repeat of the protests that Iran experienced following the 2009 presidential election is unlikely. Instead, it appears that there is a majority within the Iranian population that has opted to pursue progressive change through the electoral process. However, the campaign also engendered, for the first time, the grouping of all candidates and voters into two main groups – moderates and conservatives – creating an almost perfect two-party system in a country in which political parties do not exist.
Although this simplifies the shaping of alliances in Iran, it also increases the polarisation of society. Furthermore, by consolidating their forces, conservatives may also pose a stronger opposition to Rouhani’s government, suggesting that he is likely to face greater challenges when seeking to implement his agenda.
Among Rouhani’s electoral campaign promises was a pledge to work towards the removal of the remaining non-nuclear US sanctions targeting businesses linked to Iran’s ballistic missile programme, human rights, support of terrorism, and regional activism. The sanctions have served as a major deterrent to investment by multinational financial institutions, hindering the development of Iran’s economy.
To deliver sanctions relief, Rouhani faces the challenge of improving relations with the administration of US president Donald Trump, or at least with key players in the USgovernment and in Congress. Rouhani would also have to convince Khamenei to rein in Iran’s ballistic missile programme and regional activism, both of which are led by the Islamic Revolution Guards Corps (IRGC), which answers only to Khamenei.
Just before Iran’s election, the Trump administration renewed the non-nuclear US sanctions. Trump’s rhetoric during his visit to Saudi Arabian capital Riyadh in May, marked Iran out for further isolation. Taken together, these indicators suggest that US policy on Iran is unlikely to soften in the foreseeable future.
Beyond the sanctions issue, Rouhani will continue to work towards increasing Iran’s attractiveness to foreign investors – it was ranked 120th out of 190 countries in the World Bank’s 2017 Doing Business survey. A senior UK government official told Jane’s in June, “Iran will also need to address the regulatory issues within its banking system, as well as change the types of contracts, particularly in the oil and energy sector”, which Rouhani failed to do in his first term.
US attitude on sanctions
Trump consistently criticised the JCPOA during his presidential election campaign in 2016, and he has maintained a hostile stance towards the agreement while in office, even as it has become increasingly widely accepted within Iran. However, the outright cancellation of the agreement by the US appears unlikely at present.
A former US negotiator of the nuclear deal, speaking to Jane’s on condition of anonymity in June, revealed that this seems mainly to be due to a lack of consensus within the US administration regarding the best approach to take on the JCPOA, which had led to proposals for renegotiation or cancellation of the deal being set aside. On 19 April, the US launched an inter-agency review, which is still ongoing, to verify whether the agreement was in the US national interest. However, on 17 May, Trump renewed the waivers that exempt non-US companies from sanctions for doing business with Tehran.
Rouhani’s re-election as president does not seem to have had any impact on the US administration’s attitude towards Iran. The former US negotiator told Jane’s, “In the eyes of many in the administration, it would have been easier to have a conservative candidate, such as Raisi, win the election, as that would have facilitated the framing of a tough stance on Tehran, but the victory of Rouhani will play no role in the decision-making process in [Washington] DC towards Iran.”
Far from congratulating Rouhani on his re-election, on the day after the results were announced Trump urged all nations to “work together to isolate Iran, deny it funding for terrorism, and pray for the day when the Iranian people have the just and righteous government they deserve”.
The appointment of a national security team that shares a vision of Iran as the main problem and threat to US interests in the Middle East suggests that the US administration will almost certainly seek to put increased pressure on Tehran. The unusually well-publicised appointment of Michael D’Andrea as the Central Intelligence Agency’s director of operations on Iran, reported by the New York Times on 2 June, and the emphasis on his hardline credentials fall within this pattern of public pressure.
On 25 May, the Senate Foreign Relations Committee approved the bill tightening non-nuclear sanctions on Iran, indicating that the US will also push back strongly on Iran’s ballistic missile programme, support for terrorism, violations of the arms embargo, and human rights abuses.
While abiding by its obligations under the JCPOA, the Trump administration is also very likely to hamper Iran’s efforts to attract foreign investment and to boost its economy. For example, on 24 May, the US Treasury announced that it would review the licences granted in September 2016 to Boeing and Airbus to sell 80 and 118 aircraft respectively to Iran.
The US posture will not facilitate Rouhani’s attempts to tackle the remaining hurdles to the implementation of the nuclear agreement and to realise the expected benefits for the Iranian economy. A senior Iranian official told Jane’s in June, “Iran has demonstrated patience and resilience in implementing the agreement despite the lack of tangible economic benefits from the deal, but there is a limit to this patience.” Trump’s stance on Iran is also likely to embolden the Gulf countries, particularly Saudi Arabia, in their anti-Iranian foreign policy, increasing the chances of a further escalation of the proxy war in the region.
Iranian regional policy
Although the Rouhani administration managed – almost exclusively – the nuclear dossier, which was handled by the Ministry of Foreign Affairs, during the president’s first term in office, regional policy was mostly led by the IRGC. Despite the administration’s attempts to take more control over the country’s regional policy in the past four years – particularly through the negotiations in Vienna, Austria, in 2015 and in Astana, Kazakhstan, in 2017 to find a diplomatic settlement to the Syrian crisis – the IRGC continued to shape Iran’s strategic interests on the ground. The IRGC deployed troops from its Quds Force alongside Shia militias in Iraq and Syria, and progressively increased its presence in the various conflicts in the region, including in Yemen. An academic expert on Iran told Jane’s in May, “Iran’s foreign policy in the region is characterised by continuity, no matter who is the president”, as this was shaped through a “consensus between all elected and non-elected institutions and is thus rarely reversible”. Furthermore, the IRGC is likely to use Trump’s stance towards Tehran, as well as the Gulf states’ escalation of the proxy war with Iran and the 7 June attack in Tehran claimed by the Islamic State, as a way to portray itself as the only entity capable of defending the country’s strategic interests in the region.
Rouhani will continue to call for the improvement of ties with countries in the region. In particular, he will seek to reduce tensions with Saudi Arabia. During the electoral campaign, Rouhani heavily criticised Qalibaf for having close ties with those responsible for the attack on the Saudi Arabian embassy in Tehran in January 2016, indirectly showcasing his opposition to the action, which had prompted the severing of diplomatic ties and an escalation of tensions between the two countries.
Whether Rouhani succeeds in triggering a rapprochement with Saudi Arabia will depend on the Saudi leadership’s response to his re-election. In a statement made in early May, Deputy Crown Prince Mohammed bin Salman Al Saud of Saudi Arabia ruled out the possibility of dialogue with Tehran. A senior Saudi official told Jane’s in May that the re-election of Rouhani did not increase the chances of rapprochement with Iran, because “he [Rouhani] does not have any real influence on [Iranian] regional policies such as [on] Yemen and Syria”.
Iran’s relations with Russia
Given unresolved tensions with the US, a good relationship with Russia will remain the linchpin of Tehran’s foreign policy strategy. However, in keeping with the likelihood of a trend towards moderation in his second term, it is likely that Rouhani will attempt to balance Russian support with an improvement in relations with the West.
In March 2017, Rouhani travelled to Moscow for talks with President Vladimir Putin. The visit was probably aimed at blunting attempts by Rouhani’s hard-line rivals to question his foreign policy credentials ahead of the May election, while undercutting any potential thaw in relations between Putin and Trump.
On 7 April and 18 May, US airstrikes targeted forces supporting Syrian president Bashar al-Assad in response to the Syrian government’s alleged use of chemical weapons. These airstrikes pushed Russia and Iran even closer together, just as Tehran had again officially allowed Russian military aircraft to conduct airstrikes in Syria from Hamadan Air Base in northwest Iran.
Russia and Iran nonetheless continue to have different long-term strategic interests in Syria and are united mostly by their support for Assad. Therefore, although in the months ahead the two countries are likely to continue fighting on the same front in Syria with the aim of defending the Assad regime, this will not entail strategic co-operation but rather military co-ordination of operations on the ground. Moreover, Moscow and Tehran will continue to differ over the future of Syria, particularly with regard to territorial integrity and the role of Hizbullah and Shia militias in the conflict, even as they press for a political solution within the context of the Astana talks.
Rouhani’s re-election was the most favourable outcome for Israel. Under Raisi, for example, it is likely that the IRGC would have enhanced its economic power and political influence. By contrast, Rouhani is likely to attempt to contain the power of more hard-line elements.
During his presidential election campaign, Rouhani criticised conservative opponents and voiced rare public criticism of the IRGC. In a statement widely reported by Israeli media, Rouhani criticised anti-Israeli slogans written on ballistic missiles during tests conducted in March 2016. “We saw how they wrote slogans on missiles and showed underground [missile] cities to disrupt the JCPOA,” he said during a debate on 5 May.
Raz Zimmt, Iran analyst at Israeli think tank the Institute for National Security Studies, told journalists in a conference call attended by Jane’s on 16 May, “Rouhani tends to be more pragmatic, [and] less ideologically orientated [than] Raisi. He seems to adopt this thesis mainly common among more moderate elements in Iran that Iran should not be holier than the Pope, or more Palestinian than the Palestinians.”
Rouhani’s comments should not be interpreted as a softening of his position towards Israel, which he has not formally recognised. Instead, they are best viewed within the context of his keen understanding that politics and the economy are interconnected. Sima Shine, former deputy director-general of Israel’s Ministry of Strategic Affairs responsible for the Iranian portfolio, told Jane’s on 21 May, “He [Rouhani] wants Iran to be less radical, and to open [the economy] in a way that will enable him to continue the programmes to bring a lot of money and technology from the outside.”
One important outcome concerns the JCPOA. Rouhani is less likely than Raisi would have been to try to exploit the grey areas in the agreement. Indeed, his substantial margin of victory in the presidential election – combined with Khamenei allowing the nuclear agreement to go ahead in the first place – may indicate a broader trend of greater Iranian engagement with the outside world, which would necessitate shifts in Israel’s longer-term regional strategy.
Previous Iranian presidents who served two terms in office were weaker in their second terms and tended to encounter stronger opposition from the Supreme Leader and other centres of power. Whether Rouhani will be able to implement his agenda over the next four years will largely depend on the posture of the Trump administration towards Iran, the proxy war advanced by Saudi Arabia, and the extent of the polarisation within Iranian society.
Iran’s foreign and security policy following Rouhani’s re-election is likely to be characterised by continuity, in line with the agenda pursued by his administration over the past four years. On the nuclear issue, this means that Iran is likely to continue implementing its obligations under the JCPOA, while working towards realising the full economic benefits of the deal.
Rouhani has a limited ability to shape Iranian foreign policy beyond the nuclear issue. On security and military matters, Khamenei and the IRGC are likely to continue to maintain the upper hand, particularly given the intensifying competition between Iran and Saudi Arabia, and the attacks in Tehran on 7 June. Insofar as he is able, Rouhani is likely to seek to maintain the status quo in Iranian-Russian relations in the coming months, even as he attempts to increase engagement with the European Union and the US. Failure in this would risk fostering a greater reliance on Russia.
Moreover, Rouhani’s watershed criticism of the IRGC during the election campaign is likely to encourage even greater conservative resistance to his administration’s second term, not least in the form of additional IRGC missile tests and maritime aggression. This, in turn, would reduce the likelihood of the US lifting non-nuclear sanctions.
Meanwhile, Iran’s strategic position on Israel is highly unlikely to change as a result of Rouhani’s re-election. For Israel, the IRGC’s ballistic missile programme and the build-up of Iranian-backed Shia militias across the region will remain a particular cause for concern, and these are areas in which Rouhani’s influence is limited.
DIVISIONS GROW AMONG GULF STATES OVER POLICY ON IRAN
Hardening divisions among Gulf States over the correct stance to take towards Tehran are likely to further complicate relations between Iran and Saudi Arabia. Following Trump’s visit to Riyadh in May, the emir of Qatar, Sheikh Tamim bin Hamad Al Thani, publicly stated that the Gulf states needed to engage with Tehran, not to isolate it. The Qatari emir even congratulated Rouhani on his re-election in May’s presidential election.
However, on 5 June, Saudi Arabia, together with Bahrain, Egypt, and the United Arab Emirates, cut trade and diplomatic ties with Qatar, accusing the country of playing a destabilising role in the region by supporting militant Islamist groups. This triggered one of the biggest diplomatic crises in the history of the Gulf Co-operation Council (GCC).
After the four Gulf states shut down all land, sea, and air links to Qatar, the Iranian authorities announced that they would allow Qatari airlines to use Iranian airspace, and secured food and water supplies to Doha, the capital of Qatar, which relies heavily on imports to feed its population.
These developments are highly likely to lead to a further escalation of tensions between Saudi Arabia and Iran, and their allies, and the formation of two opposing blocs within the usually cohesive GCC.
IRAN’S FIGHT AGAINST THE ISLAMIC STATE
On 7 June, six militants conducted two co-ordinated operations in Tehran, targeting the Iranian parliament and the mausoleum of the founder of the Islamic Republic, Ayatollah Khomeini. The attack, claimed by the Islamic State, left at least 12 dead and dozens injured. The Iranian Ministry of Intelligence revealed the identities of the assailants, who allegedly were Iranians who had joined the Islamic State to fight in Mosul in Iraq and Raqqa in Syria. According to the ministry, the attackers “intended to carry out terrorist operations in religious cities”.
The Tehran attacks – the first by the Islamic State in Iran – are likely to lead the Iranian leadership to further prioritise the fight against the militant Islamist group. The Iranian authorities had been warning of the increased direct threat that the Islamic State posed to the country since at least early 2016. For example, the Iranian authorities had announced IRGC operations aimed at preventing Islamic State-affiliated groups from entering Iran (February 2016), the dismantling of Islamic State cells in the western border province of Kermanshah (August 2016), and the prevention of Islamic State attacks in the country (October 2016).
Therefore, the Tehran attacks, although not a surprise for the Iranian leadership, will result in a stronger focus on counter-terrorism operations within Iran, as well as a stronger commitment to fighting the Islamic State in the region through a heavier presence in Afghanistan, Iraq, and Syria. This will, in turn, further increase the power of the IRGC in the shaping of Iran’s regional policy.