United States Institute of Peace

The Iran Primer

Can Rouhani Resolve Iran's Economic Crisis?

Bijan Khajehpour

            After taking over the presidential office in early August, President-elect Hassan Rouhani will face a long host of economic challenges. He has made the economy—especially tackling unemployment—his highest priority, but it is clear that the process of reversing the negative trends of the past few years will be a medium-term process.
            Incidentally, the country’s key economic stakeholders, especially the business community, have reacted very positively to Rouhani’s election. The free market rate of the Iranian rial gained about 20 percent in value between June 14 and 22, and then it bounced back (see graph below). The reason for the rebound was the fact that a price of 32,000 rial to the U.S. dollar is quite realistic. Experts agree that Rouhani’s trump card will be to return the technocrats from the previous governments to the fore. However, the road to recovery will be long.

Economic and Petroleum Sector Challenges
            The Iranian economy has been battered by the poor performance of the Ahmadinejad government. Today the economy, especially the petroleum sector, which has been an engine for the Iranian economy, is facing major issues. The new president will have to deal with several serious challenges. The complete list would be very long, but the most significant challenges are:
 

High inflation: Subsidy reforms, mismanagement, and the collapse of the rial have generated an inflationary economy that is eating away the average citizen’s purchasing power;
Unemployment: With an overall unemployment rate of about 13 percent and a youth unemployment rate as high as 27 percent, Iran is facing a major socio-economic issue;
Lack of investor confidence: Mismanagement and corruption alongside political uncertainties and favoritism among semi-governmental organizations have all contributed to a business environment in which private sector investors are very hesitant to invest. The consequence is lack of capital formation and jobs in the economy;
Sanctions: Iran’s economy as a whole, and particularly the petroleum industry, has been undermined by external sanctions. This has created numerous problems for the country’s economy like declining oil revenues;
Subsidy reforms: The next government will have to find ways to make the ongoing subsidy reforms more efficient for the economy as a whole. So far the reforms have had major inflationary impacts and negative consequences for the local industry;
Lack of investment and technology in the petroleum sector: As a direct result of external sanctions, Iran has been deprived of the needed capital and technology in its petroleum sector;
Collapse of the domestic industry: Misplaced trade policies as well as subsidy reforms have put a lot of pressure on the domestic industry. Though the recent devaluation of the rial has made the Iranian industry more competitive again, it will take time for the local industry to regain their lost financial and technical strength;
Brain drain: The undesirable conditions of the past few years have led to a growing brain drain in the economy. This will be significant in specialized industries such as petroleum, but it will generally be an issue that the next government will have to attend to;
Lack of professionalism: The Ahmadinejad government’s policies in awarding projects to its own trusted circles has led to a disastrous level of unprofessional behaviors in project management and project quality and a weakening of the more professional subcontractors in the country. 

Rouhani’s Approach
            Hassan Rouhani has stated clearly that Iran’s economic issues are mainly caused by poor management and society’s lack of confidence in government institutions. He also believes that sanctions and international tensions have resulted in economic deterioration, inflation, and frustration. The consequence of all these shortcomings has been a loss in purchasing power of the average Iranian family and subsequent economic hardship.
            During his campaign and also in interviews after his victory, he has favored actions that can contribute to a sense of stability in the economy. He also wants to achieve higher living standards by: a) creation of national wealth and b) fair distribution of national wealth.
 
His other economic pledges are:
Giving more independence to the Central Bank of Iran;
Reviving the Management and Planning Organization that Ahmadinejad dissolved in 2005;
Offering short-term and long-term solutions to issues such as inflation, unemployment, housing, cash subsidies, and healthcare;
Empowering domestic production;
Improving the business and regulatory environment.
 
Potential Economic Policies
            Rouhani’s top economic advisor, Mohamad Baqer Nobakht, has provided some insight into the next government’s priorities in the field of economic management. These include:
 
Looking for initiatives to secure sanctions relief to reduce their negative impact on the economy of Iran. Rouhani was Iran’s nuclear negotiator between 2003 and 2005, and he is familiar with the complexities of the Iranian nuclear negotiations. His first goal will be to make sure that there are no new sanctions, followed by what he calls “increased transparency” in order to secure sanctions relief.
Redefining the redistribution of cash generated through subsidy reforms. The Rouhani government intends to discontinue cash handout payments to higher income groups in order to be able to increase cash payments to lower income classes. In the words of Nobakht: “The real need of the rich is not cash subsidies but they need protection for their investments.”
Supporting the local industry, not just manufacturing, but also investing in larger agricultural production, promotion of tourism, etc.
Immediately implementing the “Law for the Continuous Improvement of Business Climate,” which had been passed by the Majles but was then ignored by the Ahmadinejad government. The law foresees the lowering of the government’s role in the economy, the empowerment of the non-governmental sector, investment guarantees, etc., which will all be meant to restore some investor confidence in the economy.
 
Outlook and Conclusions
            Experts agree that the Iranian economy will initially benefit from the change of government and the associated positive momentum. However, restoring economic normalcy and a return to medium-growth scenarios will require time—potentially three to four years.
            High inflation is likely to persist in the following years due to subsidy reforms and the delayed impact of the rial devaluation. The average inflation rate will fall moderately to about 27 percent in 2013 and move toward 20 percent in 2014. The outlook for economic growth will depend on the outcome of the nuclear negotiations and the future of sanctions.
            The value of the rial against the U.S. dollar will consolidate around 32,000 rial to one USD in 2013, but will fall further due to inflationary effects. There will also be a positive impact on job creation due to the new government’s attention to private sector activity. However, unemployment figures will not drop significantly due to the negative impacts of demography, subsidy reforms, and privatization.
            All in all, the election of Rouhani has the potential of reversing the negative economic developments of the past few years. Iran is moving toward a more pragmatic set of policies, but it will take time to return the economy to a degree of normalcy.
            Rouhani’s main focus will be the economy and here the return of the old technocrats will generate a positive momentum. A more creative and de-escalating approach to the nuclear negotiations could pave the way for some degree of sanctions relief and also a growing presence of foreign companies in the market.
            One of the significant moves by Hassan Rouhani has been the inclusion of Mohammad Nahavandian, the president of the Iran Chamber of Commerce, in the new cabinet, which will facilitate the promotion of private sector activity. Nonetheless, the Iranian economy will have to continue to deal with high inflation, but a degree of sustainability in government policy as well as legal reforms could improve the overall business environment.

This piece was first published as Viewpoints 33 by the Middle East Program at the Woodrow Wilson Center for International Scholars.
 
Bijan Khajehpour is a managing partner at Atieh International.
 

US Eases Rules on Export of Humanitarian Aid

            On July 25, the United States introduced new measures to ease the export of humanitarian goods, especially medical supplies, to Iran. Humanitarian supplies are technically not restricted by sanctions, but U.S. sanctions on key Iranian banks has affected the ability to pay for medical goods. The limited flow of medical supplies has produced shortages and a growing health crisis. The U.S. move comes 10 days before the inauguration of President-elect Hassan Rouhani.

TREASURY EXPANDS LIST OF BASIC MEDICAL SUPPLIES AUTHORIZED FOR EXPORT TO IRAN AND FURTHER CLARIFIES EXPORT AND FINANCING MECHANISMS AVAILABLE FOR HUMANITARIAN GOODS


            WASHINGTON – Today, the U.S. Department of the Treasury took actions to reinforce longstanding U.S. Government efforts to ensure that our extensive economic and financial sanctions on Iran – adopted to encourage Iran to comply with its international obligations – do not impede Iran’s humanitarian imports. Treasury’s Office of Foreign Assets Control (OFAC) expanded the list of basic medical supplies authorized for export or reexport to Iran under an existing general license by adding hundreds of items; OFAC had previously issued specific licenses authorizing the export or reexport of these items. OFAC also issued further clarifying guidance on existing broad authorizations and exceptions applicable to the sale of food, agricultural commodities, medicine, and medical devices by non-U.S. persons to Iran.
 
            “Today’s action to expand the general license for the export of medical devices to Iran reflects an important element of our sanctions policy. Even as we continue to implement and enforce our rigorous sanctions regime against Iran, we are committed to safeguarding legitimate humanitarian trade,” said Under Secretary for Terrorism and Financial Intelligence David S. Cohen.
 
            In today’s action, OFAC expanded the list of basic medical supplies authorized for export or reexport under an existing general license, originally issued in October 2012, to encompass a broad range of medical supplies and devices, including electrocardiography machines (EKGs), electroencephalography machines (EEGs), and dialysis machines, along with other types of equipment that are used by hospitals, clinics, and medical facilities in Iran. These items, which were previously eligible for specific licensing from OFAC, can now be exported without prior approval from OFAC. Exporters are also still encouraged to apply for specific licenses for medical devices that may not be included in today’s expanded list.
 
            Even as the U.S. and international sanctions have tightened, the Treasury and State Departments have had extensive discussions with foreign pharmaceutical and medical supply companies that sell, export, and get paid for exports to Iran, as well as the foreign financial institutions involved in those transactions, to ensure that the exemptions from our sanctions are understood. Medicine and medical supply exporters reporting barriers to trade have repeatedly pointed to obstacles placed by the Government of Iran, including the Central Bank of Iran’s failing to allocate sufficient foreign currency. The Central Bank of Iran has access to sufficient foreign currency funds outside of Iran – which are otherwise usable only to fund bilateral trade – to finance the import of medicines and medical equipment.
                  
            As OFAC has made clear in its Clarifying Guidance: Humanitarian Assistance and Related Exports to the Iranian People, issued on February 6, 2013, and in the Iranian Financial Sanctions Regulations (31 C.F.R. part 561) (IFSR) [*1], foreign financial institutions may process transactions for the purchase of humanitarian goods including, food, agricultural commodities, medicine, and medical devices, using funds in Central Bank of Iran accounts without being subject to U.S. sanctions. Today’s Guidance on Sales of Food, Agricultural Commodities, Medicine, and Medical Devices to Iran is meant to ensure that all parties to these transactions fully understand the broad humanitarian allowances embedded in our sanctions laws.

For a link to the expanded List of Basic Medical Supplies authorized for export or reexport to Iran issued today click here
 
For a link to OFAC’s Guidance on Sales of Food, Agricultural Commodities, Medicine, and Medical Devices to Iran click here
 
For a link to OFAC’s Clarifying Guidance: Humanitarian Assistance and Related Exports to the Iranian People click here
 
For a link to OFAC’s Iranian Financial Sanctions Regulations click here


 

Rouhani Tweets! Change in 140-characters?

Garrett Nada

            Hassan Rouhani is big into Twitter. (Or at least someone in his office is.) Since his election, Iran’s new president has tweeted prolifically —in both English and Farsi – on everything from World Cup soccer to women’s rights, from nuclear negotiations to Internet censorship.
            His English language account is @HassanRouhani. It now offers one of the most telling (not to mention concise) windows into his thinking—and how the Scottish-educated cleric wants the world to perceive him. Although Twitter is periodically banned in Iran, Rouhani also has a feed in Farsi @rouhani92 for an Iranian audience, according to an administrator who responded to inquiries through the president’s official Facebook page.
 
            Rouhani’s two Twitter accounts have even been used to declare his policies. Some tweets offer tantalizing hints at change.
            On the nuclear controversy, Rouhani’s English feed tweeted that Iran could take “more steps” to show compliance with an international treaty.
            On foreign policy, it tweeted about a new openness to direct U.S.-Iran talks.
            On basic freedoms, his tweets criticized censorship and supported women’s rights. 
 
      Iranians seem to have a “don’t ask, don’t tell” relationship with Twitter and Facebook. Both have been periodically blocked, especially around elections. But millions of Iranians use software to get around government blocks on websites and social media. And many Iranian leaders and organizations have accounts that appear official.       Seven of the eight presidential candidates opened Twitter accounts for the 2013 campaign. Even Supreme Leader Ayatollah Ali Khamenei has official Twitter and Facebook accounts.

            Rouhani’s English-language account was launched on May 5. It had more than 13,000 followers by late July and produced up to 50 tweets per day. But @HassanRouhani only followed four on Twitter — Supreme Leader Ali Khamenei, former President Mohammed Khatami, former President Akbar Hashemi Rafsanjani and former presidential candidate Mohammad Reza Aref.
            The scope of the president-elect’s personal involvement in his Twitter accounts is unclear. But he is fluent in English. Rouhani received master’s and doctoral degrees from Glasgow Caledonian University in the 1990s. @HassanRouhani even tweeted a link to a video of him receiving his doctorate. And the pace of Rouhani’s tweets has increased since the election, as has the range of topics tweeted.
            The English account is savvy in its use of Twitter shorthand and hashtags. In a country where Western media is hard to find, the account has retweeted articles from The Wall Street Journal, CNN and other American media—notably pieces that portrayed his election as a fresh start for Iran and the outside world.A third account— @HassanRouhani_, which tweets in Arabic, English, French and Spanish—is not associated with the president-elect, the Facebook administrator claimed. The following is a rundown of tweets by @HassanRouhani on key issues.
 
On the United States
            Rouhani’s English feed has tweeted frequently about the United States—and indicated potential openings. “131 Congressmen have signed a letter calling on President #Obama to give peace a chance with Iran’s new President,” it tweeted on July 20.
            One of the most intriguing tweets – just two days after Rouhani was elected—was a decade-old picture of him at a U.S. field hospital that treated earthquake survivors in historic Bam. Rouhani is shown next to a female American medic in the 2003 photo. The tweet even featured the #US hashtag.
            Rouhani has said that the time has come to “rectify things” with the United States. His Twitter account posted live translations of these remarks from his June 17 press conference, one day after election results were announced.
 

On the Economy
            @HassanRouhani’s tweets have been especially candid on Iran’s troubled economy, which has shrunk during the past two years for the first time since the 1980-1988 war with Iraq. Rouhani’s account tweeted his pledge to parliamentarians not to fool them with inaccurate statistics. 
 

            Rouhani has claimed that job growth under Ahmadinejad’s administration was exaggerated. Only 14,000 jobs were created each year since 2005 on average, his Twitter account noted. “Our youth go to uni, get their BA, MA & PhD – and then straight to #unemployment,” it tweeted. Boosting foreign tourism would help, it said.
 
On Women
            Rouhani’s tweets have been almost progressive on women. He campaigned to reverse female unemployment.
 
             The new president’s tweets have supported increased women’s participation in society, including in sports. Some tweets congratulated the women’s futsal team on winning the silver medal at the July 2013 Asian Indoor and Martial Arts Games. (Futsal is a form of indoor soccer.)
 

 
            Rouhani’s tweets have promised a new ministry of women’s affairs and financial support for female heads of households.
 
 
On Personal Freedoms and Censorship
            Rouhani’s tweets have taken bold stances on sensitive issues. His tweets warned that Internet filtering creates distrust between people and the government.
 
            Two of Rouhani’s tweets admitted that many Iranians prefer foreign channels to the official Islamic Republic of Iran Broadcasting (IRIB).
 
            His tweets have also challenged censorship and encouraged personal freedoms. 
 
 
On Nukes
            The new president’s tweets have advocated building trust with the outside world on Iran’s controversial nuclear program. A promise at his first press conference (in Farsi) that Iran would provide more information was instantly tweeted (in English).The nuclear issue is one of Rouhani’s specialties. He was chief nuclear negotiator and national security adviser for 16 years between 1989 and 2005.
            Rouhani’s tweets have denied that Tehran wants nuclear weapons. “Iran was not, is not, and will never be after #nuclear bomb,” his account tweeted. “We only seek peaceful #technology.” Another tweet linked to a letter he wrote to TIME magazine in 2006 expressing opposition to nuclear weapons.
On Sports
            Rouhani’s tweets have even been playful. @HassanRouhani posted a dozen messages of congratulations or encouragement to Iranian teams, including several after the June 18 win over South Korea that qualified the men’s soccer team for the 2014 World Cup. The game was “an introduction to bigger #victories and #powerful presence our nation in all fields,” Rouhani’s account tweeted. Youth had already taken to the streets to celebrate his June 15 electoral victory earlier that week.
 

Garrett Nada is a Program Assistant in the Center for Conflict Management at the United States Institute of Peace. 

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Iran: The Week in Review

Hanif Zarrabi-Kashani
            The Middle East Program at the Woodrow Wilson International Center for Scholars offers the latest news on Iran, based on a selection of Iranian news sources. It is a weekly summary of up-to-date information with links to news in both English and Farsi.

  • July 17: During the first meeting of the Guardian Council’s new session, Ayatollah Ahmad Jannati was chosen to remain as head of the power vetting council. Mohammed Alizadeh was also re-elected as the Deputy Secretary of the Council.
  • July 17: Rahmatollah Hafezi, a member of Tehran’s newly elected 4th City Council, said that currently the city council is in the process of choosing the next Mayor of Tehran and at the moment there are about 20 people being discussed. When asked about the possible retention of former presidential candidate Mohammed Qalibaf as mayor, Hafezi said, “We prefer the relationship we have with Qalibaf… There will be two to three rounds of screenings in which three to four individuals will be invited to share and present their plans that they have for the position of mayor of Tehran.” Hafezi concluded, “After the candidates have made their presentations, the city council will begin to debate the choices, and we predict that after the first city council meeting we will be able to introduce the selected mayor of Tehran.”
  • July 17: Fars News posted photos of one of the last meetings of the 3rd City Council of Tehran, in which council member and sister of President Mahmoud Ahmadinejad, Parvin Ahmadinejad is present. She was not re-elected to Tehran’s 4th City Council during this summer’s city council elections. Fars News also posted a series of photos of Parvin’s brother Mahmoud heading one of the few remaining cabinet meetings of his administration.
  • July 18: Ayatollah Naser Makarem Shirazi cited statistics that brought him to the conclusion that most marriages that have ended in divorce are among married students. "Unfortunately, today in Iran, divorce is rising and marriage is decreasing, and divorce is a social necessity, but only when there are no other options." He went on to say that "Islam never prohibited divorce,” and that, "We need to bring divorce to a minimum in our society. Today in our society, it is not easy for two people to marry one another, but it is easy for them to divorce." Shirazi concluded, "After a divorce, the woman may be allowed to stay in the spouse's house and be free to do what she likes and not have to wear a hijab in the house until a certain amount of time, where the tension and animosity subsides and then they could reconcile."
  • July 18: MP and First Deputy Speaker of Parliament Mohammed Reza Bahonar said, “The people have seen eight years of Reformist rule and eight years of conservative rule and have seen their narrow mindedness. After 16 years the people have turned toward moderation.” Bahonar also admitted, “Running the country at this current moment is a very difficult task.”
  • July 18: Filmmakers and artists once again protested outside of Iran’s House of Cinema building today. ISNA posted photos that reveal that during their latest rally, the protesters somehow opened the lock that authorities placed on the doors. As a result, security forces intervened to stop any further escalation. Photos also reveal Iran’s very own Oscar winning director, Asghar Farhadi, also present at the rally.
  • July 19: During Friday prayers, the head of the Guardian Council Ayatollah Ahmad Jannati emphasized the responsibilities of the Guardian Council. “Since its establishment, the Guardian Council has been bound to the law and the policies of the Supreme Leader. The Guardian Council has carried a heavy burden with legal, religious, and political issues in multiple elections. But sometimes we encounter situations in which not everyone is satisfied, especially in elections in which some (people) find it hard to restrain themselves and hold their tongue, while some feel free to say what they want. But we tolerate them because it is our duty to do so.” Jannati also referred to “seditionists” (the term used for people who disputed the 2009 election results) and said, “Those who claimed cheating in the 2009 elections should face the people and be ashamed of themselves. Why did they disregard the votes of the people and leave such a bitter taste in people’s mouths? Up until now we have been too nonchalant with them (seditionists).”
  • July 19: Minister of Intelligence Hojjat al-Islam Haydar Moslehi responded to recent reports of surveillance equipment found in MP Ali Motahari’s office and said, “This story is important and raises many questions. We have been following this (case) since last Thursday. The ministry met with Ali Motahari, re-inspected his office, and made the necessary orders to pursue this matter.”
  • July 20: Female MP and a member of the parliamentary national security and foreign policy committee Zahra Elahian spoke about the possibility of former British foreign minister Jack Straw attending the inauguration ceremony of President-elect Hassan Rouhani. “It seems that Mr. Straw is trying to coordinate with this country’s government (Iran) and show his willingness to re-open the British Embassy in Tehran.” She added, “Mr. Rouhani and his foreign policy team should not adopt such a passive stance in regards to this relationship (with the British).” Elahian continued her warnings by citing British meddling in Iranian domestic affairs in after the 2009 elections, and how “the BBC broadcasts psychological warfare against the Islamic Republic of Iran.”
  • July 20: Ahmad Montazeri, the son of the late dissident cleric Ayatollah Montazeri, has written a letter published on his personal website to Iran’s Supreme Leader Ayatollah Khamenei in which he asks that Mir-Hussein Mousavi, his wife Zahra Rahnavard, and Mehdi Karroubi be released so that they can attend the inauguration of President-elect Hassan Rohani. Montazeri also called for the release of other political prisoners and prisoners of conscious as well. “Today, due to the political and economic conditions of our dear country, now more than ever we need to put effort into creating unity and national solidarity. The inauguration ceremony (for Hassan Rouhani) can be used to provide national unity and solidarity by having representatives from different opposition and current ruling political groups attending.
  • July 21: During an Iftar ceremony at the Hosseni Imam Khomeini mosque with a group of senior Iranian officials, Supreme Leader Ayatollah Khamenei said that he was not opposed to talk with Washington on certain issues. “I am not optimistic about negotiations with the United States, although I have not rejected negotiations over certain issues such as Iraq in the past years.” Khamenei also added, “We have always believed in interaction with the world,” but any interaction must be based on a proper recognition of the other side.” Mehr News published a set of photos of the event which reveal every top official in the Iranian government in attendance.
  • July 22: During a press conference, the spokesperson for Iran’s judiciary Gholam-Hossein Mohseni-Ejei was asked about speculation regarding Iranians that left the country after the 2009 election and the possibility of them returning to Iran as tied to the changing of administrations, and if this was in fact legally possible. Mohseni-Ejei said, “If an individual has committed a crime inside Iran, or if an Iranian outside the country has committed a crime, the judiciary can prosecute them. The judiciary will not ban anyone from entering Iran if they have committed a crime. It is possible that the individual could be forbidden from leaving the country once inside, but if the individual has committed a crime, we won’t stop them from entering the country but once inside, we will investigate the charges against the individual.”
  • July 22: Member of the Women’s Council on Reform, and former Deputy for Social Affairs of the Ministry of Interior, Ashraf Boroujerdi said, “The formation of an inclusive female (political/social) party is an extremely difficult task. If the group’s purpose is to form a group with women who hold and believe in different ideas, it will not be possible.” She continued, “A (successful) party is formed with a collection of like-minded individuals with clear goals… in this field (women’s activism) there many different types of ideas and the expression of those ideas somewhat defeats the purpose (of the group).”
  • July 22: Former president Mohammed Khatami celebrates an Iftar ceremony with a room full of poets. ISNA posted photos of Khatami laughing and smiling during the ceremony.
  • July 23: In his weekly press conference with reporters, Iran’s Foreign Ministry Spokesman Abbas Araqchi emphasized that “this is the first time since the victory of the Islamic Revolution that it has been decided to invite foreign officials to attend the inauguration ceremony.” In a turn of events, Araqchi threw cold water on the widely reported  possibility of a U.S. official being invited to the inauguration. “Our invitation includes all the countries (of the world), of course with the exception of the United States as well as the Zionist regime that we do not formally recognize us as a country,” said Araqchi.
  • July 23: Outspoken MP and member of the Parliament’s Cultural Commission, Ali Motahari weighed in on a potential future role for former president Mohammed Khatami in the Rouhani administration, as well as the recent controversy surrounding whether or not former British foreign secretary Jack Straw should attend President-elect Rouhani’s inauguration ceremony without pre-conditions. “Currently he (Straw) has no position in the British government. If these prominent figures request to attend the inauguration ceremony of the new president, why should we not allow them? Sometimes through such means, governments can improve their relationship. Iran could also send appealing figures such as (former president) Mohammed Khatami to some foreign countries in order to resolve some of the country’s foreign policy issues… these methods are commonly used in today’s world. Former and retired officials can sometimes thaw the frozen political relations between countries.” Motahari concluded his remarks by addressing the comments of a number of Iranian MPs regarding whether or not Straw should apologize before coming to Iran. “If Jack Straw has to apologize to the Iranian nation, the occupiers of the British embassy in Tehran should also apologize,” said Motahari.
  • July 23: While speaking to staff members of the judiciary, head of the judiciary Sadeq Amoli Larijani claimed that “Islam was the true harbinger of human rights,” and that the West imposes its own principles on the world. “Ignoring the situation in Bahrain and Egypt are prime examples of inconsistent behavior and respect for freedom that the west has for human rights.”
  • July 23: Majid Abhari, a pathology and behavioral science specialist, told ILNA that “67% of youth inside Iran have no real goals for their future.” His research with the Institute of Behavioral Sciences was fielded from numerous cities around Iran and studied over 8,000 boys and girls between the ages of 17-26. According to Abhari, the main factors for this phenomenon are “lifestyle changes induced by friends, satellite TV, and the Internet.” In order to solve this issue, Abhari claimed that the “best way for youths to reform this behavior would be to return to their Iranian and Islamic lifestyle.”
  • July 23: The director of Tehran Air Quality Control, Yousef Rashidi, said that based on pollution measuring stations in Tehran, “The air quality index today is at an unsafe condition as pollutant particles and particulates from car emissions are currently 2.5 microns beyond the safe limit.” He advised people with sensitive medical conditions to remain indoors or at least reduce the number of hours they spend outside. The city of Tehran annually battles and chokes on a fog of air pollution, usually in the winter and summer months.  
  • July 23: In an interview with Khabar Online, the managing director of Iran's Aviation Industries Organization (IAIO), Manouchehr Manteqi, spoke about the status of Iran’s aviation industry as well as new aerospace projects and said that Iran has designed and domestically manufactured a 52-passenger airplane. He also said that at the moment “Iran’s national aviation industry in conjunction with seven international companies are producing a short to medium range 150 passenger plane that can be compared to a Boeing 737 series airplane or an Airbus 320 airplane.” Manteqi admitted that international sanctions have had an effect on Iran’s aviation industry but that “Iran has prepared and dealt with sanctions from early on, and has a mechanism to deal with them.” ISNA posted a series of photos of an airplane manufacturing plant in Isfahan that resembles the 52-passenger plane that Manteqi is speaking about.
  • July 23: Tabnak News posted photos of Tehran’s police conducting their third sweep of “thugs and criminals in the capital of Tehran.” The items and evidence that were allegedly confiscated during the sweep were put on display for the public and media. They include guns, knives, swords, axes, drug paraphernalia, alcohol, jewelry, and prohibited music CDs from Western countries. The security forces also made sure to publicly shame those who were arrested during the photo-op by exposing the tattoos of those arrested. Tattoos are deemed by authorities as un-Islamic.
  • July 24: Members of the Central Council of the Islamic Students Association wrote an open letter to President-elect Rouhani with regard to who he wishes to name as his education minister. The letter begins with concern, “In choosing your minister to steer the ship of education, we expect you to carefully pick someone who will build the future generation, and who has the utmost intelligence.”
  • July 24: At an Iftar banquet, former presidential candidate and MP Gholam Reza Hadad-Adel was asked whether he had been suggested as a possibility to serve in President-elect Rouhani’s still to-be-determined cabinet. To which Adel responded, “No, I have not been recommended (to serve).”
  • July 24: During a meeting meant to praise representatives of the media that have covered the outgoing president for the past eight years, Mahmoud Ahmadinejad said, “We (the 10th administration) appreciate everybody, writers that are in agreement (with my policies), as well as writers that are opposed, we all work toward higher goals.” Ahmadinejad then flashed a little bit of his well-known charisma and said, “I want to add a little humor right now. One day a friend of mine told me, it is not important whether they write in favor about you, or write against you, what is important is that they are writing about you, and in this regard, I’d like to thank all my media friends in attendance today.” ISNA also posted a set of photographs of the event.
  • July 24: In a meeting with the staff of the Expediency Council, the head of the council and former president Ayatollah Hashemi Rafsanjani spoke about the recent presidential election and said, “God realized in the hearts of the people, a sense of consciousness and responsibility, and under the worst conditions they came out (to vote). We must utilize this situation and not let the hope of the election turn into disappointment.” Rafsanjani then referred to the “biased political grudges that the enemies of the Islamic Revolution have toward Iran” by saying, “There were no expectations that after the elections the new conditions would make them (enemies of Iran) behave out of the norm or diplomatic.”
  • July 25: At an Iftar ceremony, former reformist presidential candidate and MP Mostafa Kavakebian said, “I am not saying that Mr. Rouhani is 100% reformist, but his discourse is reformist.” Kavakebian also remarked on the notion that Rouhani would not have won the election without the help of former presidents Mohammed Khatami, Hashemi Rafsanjani, as well as other reformists. “This could be true, but Rouhani had great potential and capacity (to win.)”
  • July 25: The office of outgoing President Mahmoud Ahmadinejad announced that, at the president’s behest, this Friday’s ceremony meant to celebrate the past eight years of Ahmadinejad’s tenure and the work of his governors, deputizes, and ministers has been canceled. “In keeping with the spirit of simple living and conservative lifestyle, avoidance of extravagancies, and keeping in mind the lower levels of society, the beloved president has decided to cancel the event. In the last days of the tenth administration, this is yet another golden mark in his brilliant public service record.”
    Click here for a pdf version.

Rouhani and the Revolutionary Guards

Will Fulton

            Fulton is the author of “The IRGC Command Network: Formal Structures and Informal Influence,” which details the evolution of a powerful faction within the Revolutionary Guard’s core leadership and its influence on regime decision-making.

How have the Revolutionary Guards reacted to Hassan Rouhani's victory?
      Immediately after the mid-June election, the Revolutionary Guards (IRGC) issued a formal statement welcoming Rouhani’s election and pledging to work with him. “We are fully prepared to cooperate with the future administration in the framework of all our legitimate duties and missions. The grand and passionate presence of the people in the election on the one hand began a new chapter in the evolutionary movement of the Islamic Revolution and the progress of the country, and on the other hand, signaled another defeat for the enemies’ front.”
      Otherwise, the Revolutionary Guards leadership has refrained from commenting on Rouhani’s victory except to distinguish him politically from the reform movement led by President Mohammad Khatami between 1997 and 2005. Mohammad Safar Harandi, a senior IRGC adviser, for example, insisted that the new president is ideologically closer to the principlists (ultraconservatives), the political group most closely aligned to the influential Command Network.
            The “Command Network” is one faction of extremely influential hardline IRGC commanders. This is a group with relationships dating back to the 1980-1988 war with Iraq that has since remained remarkably cohesive. Many of its members almost certainly interacted with Rouhani during the war or his 16 years as secretary of the Supreme National Security Council. 
            On July 2, Brig. Gen. Ali Fazli, deputy commander of the paramilitary Basij and a Command Network member, attempted to legitimize the controversial 2009 reelection of President Ahmadinejad by pointing to the success of the 2013 election of Rouhani. “Those who accused the system of fraud in the [2009] election have realized with the people’s epic participation in the recent election that their claims were complete lies…. Those who made improper claims of fraud and entered the electoral process with doubt and created suspicion among the Iranian people should today come and apologize to the people and the system.”
 
How might Hassan Rouhani's election impact the Revolutionary Guards' influence on regime policy? And how might it be different from the Guards' influence during the Ahmadinejad years in power?
      One benchmark for IRGC influence in the new government will be Rouhani’s cabinet. Ahmadinejad had an unprecedented number of former IRGC officers in his cabinet, and change or consistency in this presence could be telling. The senior leaders, however, are unlikely to be forcibly removed from their current positions as a result of Rouhani’s election. The core IRGC leadership will, therefore, remain positioned to directly influence regime decision-making, particularly on national security and core foreign policy issues. In that sense, little may change.
            In the domestic realm, the IRGC may tolerate attempts by the new government to reform civil society, as long as reforms do not unleash currents that jeopardize regime stability. For example, the IRGC tolerated President Mohammad Khatami’s reformist government until the July 1999 student protests prompted the Guards’ leadership to threaten direct intervention if the government did not contain the situation. This is not a perfect comparison, however, as the IRGC has become more aggressive in responding to internal threats since IRGC commander Jafari’s 2007 appointment, and especially since mass demonstrations after the 2009 election. The Command Network, the same core group that then controlled the IRGC and warned Khatami, has only strengthened its grip in the intervening years. It is now is positioned to intervene again against any perceived challenges to the regime or the Guards’ interests.
 
Do the Revolutionary Guards have "red lines" for Rouhani's administration? What might they be?
            The Revolutionary Guards have articulated at least one red line. Three days after the election, Brig. Gen. Mohammad Esmail Kowsari repudiated the influence of reformist leaders in the 2013 election. He warned against allowing former presidents Hashemi Rafsanjani and Mohammad Khatami to have influence again.  Kowsari is a former senior IRGC commander linked to the Command Network. He currently represents Tehran in parliament and is a member of the National Security and Foreign Policy Parliamentary Commission. Kowsari said Iranians “fundamentally no longer trust” the reformists. Hardliners both inside and outside the IRGC appear to be united on this issue.
 
Who are the most influential Revolutionary Guards commanders? What is their relationship with Rouhani?
      The Command Network has steadily gained control of nearly all the key command and staff positions in the IRGC and Armed Forces General Staff (AFGS). Its members include IRGC commander Maj. Gen. Mohammad Ali Jafari, deputy chief of the AFGS Maj. Gen. Gholam Ali Rashid, Quds Force commander Maj. Gen. Qassem Soleimani, IRGC Navy Commander Brig. Gen. Ali Fadavi, AFGS Intelligence and Operations deputy Maj. Gen. Mohammad Bagheri, and others.
      Although very influential, the Command Network is also only one part of the IRGC leadership. Another faction of current and former IRGC commanders—including Ali Shamkhani (above with Rouhani) and Hossein Alaei— appears to be more closely aligned with Rouhani’s camp. After the 2013 election, former IRGC Navy Commander Alaei defended Rouhani as “a known figure in the Islamic Republic, and there are no issues with him. He has been, and is, a revolutionary individual and effective in the revolution,” while Shamkhani praised the role of former presidents Rafsanjani and Khatami, who both supported Rouhani prior to the election.
 
Will Fulton is an Iran Analyst for the Critical Threats Project at the American Enterprise Institute.
 
Click here for the full report on the IRGC Command Network.

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