The Iran Primer

      The two men have competed for power and the right to define the revolution since the death of revolutionary leader Ayatollah Ruhollah Khomeini in 1989. Rafsanjani originally had the upper hand in two sweeping changes. He oversaw constitutional changes that created an executive president, which he then ran for and won. And, in Tehran’s worst-kept secret, he orchestrated Khamenei’s selection as the new supreme leader, reportedly because Khamenei was a middle-ranking cleric and dour figure who could not rival Rafsanjani’s political base or charismatic wiles. Khamenei actually owes his power and position to Rafsanjani, the man known in Iran as the “shark.”

      But since 1989, Rafsanjani’s master plan has gradually unraveled. In 2013, Khamenei has now managed not only to emerge from Khomeini’s shadow. He has also sidelined most of his old rivals, including the crafty Rafsanjani. On May 21, Rafsanjani was disqualified from running for the presidency—even though the 12-man Guardian Council had qualified him to run in three earlier elections. He had been elected twice. Rafsanjani is 78. Winning elected political office is likely to be increasingly difficult. Hardliners in parliament even considered legislation this year that would bar any candidate over the age of 75.

            For now, Khamenei is his own man. Yet the two rivals still epitomize a core schism among the original revolutionaries.

            Rafsanjani believes Islam should be the basis of Iran’s political system. But he also advocates facets of modern politics, including republican institutions, an essentially capitalist economy, and a foreign policy that honors international practices. It is not liberal democracy. It instead has electoral outlets with strict safeguards that protect religious and revolutionary doctrines. Rafsanjani appears to view himself as a modern day version of Amir Kabir, the reformist chief vizier for Qajar dynasty Naser al Din Shah in the 19th century.

            In contrast, Khamenei is more conservative and dogmatic. He believes that the supreme leader, rather than the president, should be the theocracy’s key decision-maker. He also appears to view the Iranian people more as subjects than citizens. For Khamenei, the supreme leader’s authority is primarily derived from God and the Hidden Imam. Elected institutions are meant to implement his policies rather than shape them.

            Khamenei has spent the last 24 years converting his vision into a reality—and taking on his revolutionary peers. Between 1989 and 1997, he tolerated President Rafsanjani’s economic liberalization and attempted détente with the West because he had little choice as a newly minted leader. But he used the time to build his own power base, tapping into close connections to the Revolutionary Guards. He had served as their supervisor and deputy minister of defense during the revolution’s first decade and the tough eight-year war with Iraq.

            Once Rafsanjani’s term was over, Khamenei used the Guards to suppress reformists under President Mohammad Khatami, who held office for two terms between 1997 and 2005. Khamenei was widely believed to feel threatened by Khatami, a suave cleric who had popular appeal and a historic connection to Khomeini. Like Rafsanjani, Khatami was also thwarted from running again in the 2013 presidential election.

            Khamenei’s initial support for Mahmoud Ahmadinejad, who first ran for the presidency in 2005, was partly because the Tehran mayor’s had no connections to Khomeini. He was also not a cleric with religious standing that could undermine the supreme leader. The other two major candidates in the disputed 2009 presidential race — Mir Hossein Mousavi and Mehdi Karroubi — had both been close to Khomeini. As prime minister from 1981 to 1989, Mousavi had frequently clashed with Khamenei at a time Iran had a parliamentary government and Khamenei was titular president. Karroubi had been head of the Imam Khomeini Relief Committee and the Martyr's Foundation as well as speaker of parliament. Both men are now under house arrest for challenging the 2009 election and serving as leaders of the so-called “sedition” against Khamenei’s rule.

            Khamenei has managed to clear the field. Yet his position at the top is also lonely and potentially unwieldy.

            Ironically, Iran’s supreme leader now faces opposition from an unexpected source — the family of the only other man who held the job. Khomeini’s daughter recently published an open letter to Khamenei stating that her father wanted Iran to be ruled by Khamenei and Rafsanjani working side-by-side. She warned that Rafsanjani’s removal from power would make the regime a dictatorship — and could even imperil the revolution.

 

 

            For Iran, 2013 could be one of the most challenging years—both at home and in relations with the outside world—since the 1979 revolution. The Islamic Republic faces the potential of stronger economic sanctions and even an Israeli and/or U.S. military strike because of its intransigence in complying with U.N. resolutions on its nuclear program.

 

            But the world’s only modern theocracy also must deal with twin domestic challenges-- deepening malaise among the young and increasing tensions among the political elite. Both could be important factors in the presidential election scheduled for June 14, which will feature a new slate of candidates since President Mahmoud Ahmadinejad will have served the two-term limit. Home-grown problems could outweigh the regime’s foreign policy woes.

 

            Iran and the world’s major powers have all indicated an interest in a new round of diplomatic talks in 2013 to end the long standoff over Tehran’s controversial nuclear program. The gap is still enormous, however, after three rounds in Istanbul, Baghdad and Moscow in 2012. The big question is whether Supreme Leader Ayatollah Ali Khamenei is truly interested in making a deal—and on terms that will also satisfy the United States, Britain, China, France, Germany and Russia.

 

            Khamenei is not easily swayed by pressure. He has survived imprisonment and lived through the revolution, assassination attempts, the eight-year Iran-Iraq war, popular uprisings, and decades of sanctions. He views Iran’s uranium enrichment program not only as a natural and legal right, but also a measure of Tehran’s success against the United States. In 2012, he often publicly talked about the U.S. “decline” in the Middle East, reflected in part by the fall of three pro-American rulers with other U.S. allies wobbling. Tehran also spins the so-called Arab Spring as an “Islamic awakening” modeled on its own Islamic revolution.

 

            Despite what he says publicly, however, Khamenei is also savvy enough to know that the same political changes represent new challenges for his regime as well. Syrian President Bashar Assad, Tehran’s most important Arab ally, is under siege from a protest movement that turned into a surprisingly powerful military campaign. The spillover impacts Lebanon’s Hezbollah, which also faces its own unique problems. And other regional powers, most notably Turkey, are increasingly questioning Iran’s geopolitical aspirations.

 

 

            Iran begins 2013 with growing economic woes that may be an important calculation in Khamenei’s decision. He needs tens of billions of dollars in oil revenues to maintain a vast and often loyal network that has maintained his rule as Iran’s ultimate leader for the past 23 years. But the world’s toughest sanctions, soaring inflation, and the plummeting value of Iran’s currency produced the perfect economic storm in 2012. And Tehran’s economic crisis will not end any time soon.

 

            Iran’s oil exports declined by as much as one-half in 2012, a factor that could produce additional pressure from key Khamenei constituents, including the Bazaar merchant class and the powerful Revolutionary Guards. 

 

            But chronic mismanagement is the chief cause of Iran’s economic problems. After his 2005 election, President Ahmadinejad eliminated economic planning agencies such as the Management and Planning Organization. He also sidelined skilled technocrats who were not politically loyal to him.  He fueled inflation by injecting massive cash into the economy and reducing subsidies. During his presidency, imports of goods from Asia and Europe skyrocketed, contributing to the closure or bankruptcy of hundreds of Iranian factories. The list goes on and on.

 

            Corruption across the regime has contributed to the economic crisis. In 2012, the Islamic Republic was perceived as one of the most corrupt in the world, according to Transparency International. It ranked 133rd—tied with Russia, Kazakhstan, Honduras and Guyana—out of the 176 countries and territories that were ranked.

 

            The Revolutionary Guards, which control large parts of the economy, are also reportedly corrupt. The most powerful military organization in Iran has charitable foundations (bonyads) that are tax-exempt and largely free of government scrutiny. The Guards have also been linked to illicit smuggling and narcotics trafficking. Some veteran officers have reportedly amassed significant wealth.

 

            The economy is now the Islamic Republic’s Achilles Heel. Iran has been successful in educating millions of Iranians and rebuilding its infrastructure after the Iran-Iraq War. But it has not reached the potential of a country with one of the world’s largest reserves of oil and natural gas and a well-educated and resourceful population.

 

             The Islamic Republic begins 2013 with anxiety among both the public and the government over the impending presidential election. The 2009 election produced the deepest political schism since the revolution, with millions turning out in massive popular protests across the country to challenge the official outcome. It gave birth to the opposition Green Movement and created an enduring crisis of legitimacy for the Supreme Leader.

 

             The 2013 election may be more tightly scripted than any earlier presidential race to prevent serious debates or competition. Candidates are technically vetted by the Guardian Council, but they must also have the Supreme Leader’s unspoken approval. As the regime becomes increasingly militarized, candidates may also need to either have ties to the Revolutionary Guards or be amenable to its interests.

 

             In December 2012, the Iranian parliament passed legislation requiring all candidates to have the endorsement of more than 100 of the regime’s “experts” and to be between the ages of 40 and 75. Ayatollah Hashemi Rafsanjani, a former president who has long been Khamenei’s main political rival and a focus of hardline ire, is now 78 years old. He ran again in 2005 against Ahmadinejad, but lost. He is now excluded from running again.

 

             Other potential challengers also appear to be sidelined—at least for now. Among them is Esfandiar Rahim Mashaei, who is Ahmadinejad’s ally and in-law. (Their children are married.) Khamenei loyalists have called him a “deviant” threat to the clergy and the Supreme Leader.

 

             The spectrum of rivals reflects the unprecedented divisions. All were among the early revolutionaries who ousted the shah and hung together for more than a decade. Ahmadinejad, a hardliner who had Khamenei’s full endorsement just four years ago, is now perceived as a threat to the Supreme Leader’s hold on power.

 

             But the most important challenge to the regime may still come from the Green Movement. Its symbolic leaders, Mir Hossein Mousavi and Mehdi Karroubi, are under house arrest but they remain a potent threat to Khamenei’s rule, perhaps even more than an Israeli military strike or U.S. sanctions.