One year ago, Hassan Rouhani, a cleric running on a moderate platform, won the Iranian presidential election. Iranians hoped that Rouhani would pursue reformist and pragmatist causes from his centrist position within the establishment and make good on his campaign promises for social and economic liberalization, women’s rights, a new approach to nuclear talks, and a strategy to ease international financial and diplomatic isolation. The West hoped Rouhani, who served as Iran's chief nuclear negotiator between 2003 and 2005, would be a better partner to advance nuclear negotiations. But Rouhani is contending with a powerful conservative bloc within the Iranian regime that is highly skeptical of the reforms and compromise with the West on the nuclear program.
One year later, how has Rouhani fared? Four Iranian experts discuss Rouhani’s policies and prospects for change.
Please join the discussion by sharing your own views in the comments section.
Rouhani’s Domestic Tightrope Act
Eskandar Sadeghi-Boroujerdi
Dr. Eskandar Sadeghi-Boroujerdi, Associate Editor of the British Journal of Middle Eastern Studies.
Rouhani’s presence in the corridors of state power for three decades has served him well. He knows on which issues he might press without hazardous repercussions, and which ones yield little by way of tangible dividends. To that end, the Rouhani administration has adopted the slogan of e‘tedal, or moderation. The term tondrow (radical), meanwhile, is applied derisively to describe the government’s critics, who now find themselves in a minority and out of step with the country’s prevailing mood.
Rouhani's allies among the Executives of Reconstruction Party, their sympathizers, and the E‘tedal faction, which formed in the Majlis following Rouhani’s victory, are now making a concerted effort to capture the middle ground and persuade as large a swath of the political elite as possible to support the government’s chosen path. So far, the focus on the nuclear issue, sanctions relief, and the poor shape of the economy has managed to secure a coalition between regime “centrists”—encompassing more conservative Reformists and what used to be known as the “modern right” associated with former President Akbar Hashemi Rafsanjani—and the “moderate Principalists,” among them Parliamentary Speaker Ali Larijani and centrist elements within the Society of Combatant Clergy.
Undoubtedly many, if not most, voters were first and foremost preoccupied with making their daily lives more tolerable. But the reformist backing of Rouhani, embodied in former President Mohammad Khatami’s vocal support and presidential candidate Mohammad-Reza Aref’s less-than-enthused stepping aside, was crucial in galvanizing Rouhani’s electoral base of support. Despite never being associated with the Islamic left or a “reformist” organization, Rouhani did call for the rule of law and respect for people’s privacy, yet he made little real effort to ensure the execution of his government’s much feted “citizen’s rights charter.”
The reformists themselves pragmatically realize they have few alternatives, and so their support for the government is ongoing. Nevertheless, Rouhani has been careful not to press on the truly sensitive issues, such as the Guardian Council’s “approbatory supervision” (nezarat-e estesvabi) of the election process and the Assembly of Experts’ supervision of the Supreme Leader.
Moreover, Supreme Leader Khamenei has ignored requests to either release or put on trial the leaders of the Green Movement—Mir Hossein Mousavi, Mehdi Karroubi, and Zahra Rahnavard—after an over three year house arrest. He is also reportedly hostile toward former President Khatami for perceived disloyalty. These attitudes convey a basic unwillingness to permit Rouhani and his allies to reintegrate those who once dared to challenge (often mildly) him and the office he occupies.
Attempts are now underway to institutionalize the political marginalization of reformist figures, as a new and prospective Majlis bill on political parties illustrates. In the stated law, any individual who has either been convicted of “activities against state security” or was a member of a dissolved party will be prohibited from either joining or establishing a political party. The immediate targets of this bill appear to be two reformist organizations that the Interior Ministry barred in 2009. The first is the Islamic Iran Participation Front, whose first chairman was Khatami’s younger brother. The second is the Mojahedin of the Islamic Revolution Organization, a stalwart leftist group whose members include Behzad Nabavi, Feizollah Arabsorkhi, and Mostafa Tajzadeh; all three were imprisoned following the 2009 unrest and state crackdown. These considerations indicate that conservative politicians are trying to preempt the reformists from reestablishing a viable political platform that could reignite and unite their support base.
While there has been a tangible shift and loosening of the political atmosphere (particularly for “insider” forces), arrests and detentions continue. Much like conservative retrenchment after the Tehran Spring of 1997-1999, the institutionally entrenched and unaccountable conservative establishment will push back if it feels its privileges are under threat.
Should Iran reach a durable solution to the nuclear impasse—which has received cautious support from the Supreme Leader’s office—this will undoubtedly secure Rouhani’s place in history. It will likewise strengthen the president’s hand against his critics. Yet it could also mean that the office of the Supreme Leader loses much of its incentive to restrain those who have been openly belligerent toward the president and his administration’s agenda.
However, if interfactional cohesion among Rouhani's allies can be maintained in the run up to the 2016 parliamentary elections, the conservative Endurance Front and even the Principalist Faction, headed by Gholam-Ali Haddad-Adel, could find their political stake in the legislature precipitously decline. This may occur even as the reformists, especially the more radically inclined among their number, continue to face the threat of “legalized” political and civic marginalization by the deep state.
Overall, the so-called E‘tedalis (in a broad sense) will continue to cautiously eschew the issues they know the Supreme Leader’s office, supervisory institutions, and security forces are sensitive to. They will instead quietly concern themselves with issues that advance their vision of Iranian prosperity and have broader support within the political elite, such as strengthening the private sector and improving relations with powerful Western states. Their ultimate goal is arguably to create a Shia Singapore in the Persian Gulf. But how they will manage the almost inevitable judicial and deep state pushback is yet to be seen.
Human Rights Left to Languish
Azadeh Moaveni
Azadeh Moaveni, former Middle East correspondent for Time magazine and the author of Lipstick Jihad and Honeymoon in Tehran.
When Hassan Rouhani was campaigning for president during the spring of 2013, he chose a key as the overarching symbol of his electoral platform and vision for a new Iran. That key, he vowed, would open up the country’s tightly sealed political sphere and unlock the path to basic civil rights. One year into Rouhani’s tenure, the key has emerged as rich fodder for caricaturists, who have shown it to be alternately lost, blunted, or mismatched to its lock. Today, the president finds himself presiding over a roughly unchanged Iran.
The lawlessness and arbitrary detentions that overshadowed the era of Mahmoud Ahmadinejad have continued unabated. The state regularly arrests civil society activists and journalists, and executes scores of prisoners without fair trial. The country’s once-vibrant NGO and media climate remains intimidated and quiet, and the political bullying that pushed reformist politicians and other critics to the margins of public life remains firmly in place. The sameness has been so evident that UN Secretary General Ban Ki-moon chastised Rouhani's government in March for not having “changed its approach” to the death penalty or the protection of free expression.
Since the start of this year, the state has executed nearly 400 prisoners, many of whom human rights groups believe were activists for ethnic minority rights spuriously charged with criminal offenses. Authorities have also imprisoned at least 30 journalists and technology specialists, and in a particularly aggressive move in July, arrested the Washington Post’s Tehran correspondent.
Not only have Rouhani’s most notable electoral pledges about bringing Iranians digital freedom, dignity as citizens, and respect in private life remained elusive, the state has revitalized its efforts to enforce Islamic dress codes and limit women’s access to public spaces. Parliament recently held a session on the moral threat posed by leggings, and authorities forbade women from watching volleyball matches in Tehran’s Azadi Stadium.
The Rouhani government’s scorecard on human rights and civil society is now widely discussed even within his administration as its most alarming and public failure. The president’s allies argue that he must focus first on securing a nuclear deal, and then use the political capital such a victory would garner to push forward more contentious social and political reforms. That strategy, however, risks losing the Iranian public—who are seeing neither a spike in living standards nor greater freedom—along the way.
The sheer scope of ongoing violations under Rouhani’s watch has overshadowed the small measures his government has sought to enact. These include releasing a number of political prisoners and issuing press permits to previously banned publications like Iran-e Farda and Zanan-e Emrouz, which in their respective eras had been crucial to the debate and coverage of women’s and democracy issues. Both outlets were the sort of platforms where controversial state moves like the ban on vasectomies and promotion of larger families would have been discussed and carefully skewered.
Rouhani’s allies argue that the executions, arrests, and lingering Ahmadinejad hangover on civil society and the press are the work of the hardline judiciary. They say that blame should be placed on the pole of the establishment that is responsible.
His allies would also note that Rouhani has pushed back against hardliners far more forcefully than former president Mohammad Khatami, the last president who tried and failed to moderate Iran. Rouhani warned hardliners, in regard to securing Iranians free access to the internet, that the “era of the one-way pulpit” is over. In response to his opponents’ protestations about the erosion of Islamic culture, he said with exasperation, “You can’t drag people into heaven with whips.”
But ordinary Iranians, and indeed the international community, do not pause to make flowcharts of power distribution in the Islamic Republic before weighing Rouhani’s record. For them, the nezam, or state, is inseparable from the executive. A profound disillusionment is seeping into the youthful ranks of those who voted Rouhani into office. In their eyes, it is no great feat that Rouhani and his diplomats are on their way to securing a nuclear deal. The Supreme Leader has backed those endeavors, leaving the dirty work for the negotiating tables of Europe, not the political backrooms of Tehran.
For those expecting the Rouhani key to open at least a few doors, the president’s first year has been a disappointing one. Rouhani’s Iran is as lawless and intellectually cowed as the one he inherited, a country where a muscular intelligence apparatus makes the political decisions, not the politicians Iranians voted into office.
Ineffective Economic Stewardship
Mohammad Jahan-Parvar
Mohammad Jahan-Parvar, American-Iranian economist.
Many key decision makers and ideologists of the Islamic Republic have repeatedly expressed suspicion of the conventional paradigm of economic growth and development. They consider economic development a Western ploy and have repeatedly declared their intention to pursue other objectives.
Rouhani, however, has publicly committed himself to improving the livelihood of ordinary Iranians. Yet one year into his tenure, Iran continues to suffer from a host of short and long-term issues. In the short run, the harsh and prolonged stagflation caused by tightening international sanctions remains the most pressing issue. Between 2012 and 2013, for instance, Iran faced 40 percent inflation and an almost 6 percent contraction in GDP. Today, inflation still hovers around 25 percent and GDP is set to contract by another 3 percent by the Persian new year (March 2015). Ironically, of all policy areas, economic growth offered the Rouhani administration its greatest chance of success.
This prolonged recession is primarily an outcome of sanctions, particularly those imposed by the United Nations, the United States, and the European Union. These sanctions have been effective; Iran’s economy is in a severe slump. An Iranian minister recently admitted that at least 50 percent of industrial plants are operating below capacity.1 Without a negotiated agreement with the West over Iran’s nuclear program, the continued freeze of Iranian assets will likely cause the economy to remain in recession. Fears of stagnation and a lost generation are now talk of the town. Iran’s economic recovery roadmap document, published last week by Rouhani’s economic team, is written with the explicit assumption that international sanctions will be in place for the foreseeable future.
Meanwhile, double-digit inflation rates remain a curse for the Iranian economy. Perennially high inflation, coupled with persistent double-digit unemployment, low labor force participation, low productivity growth, rampant corruption, a hostile business environment that actively discourages entrepreneurship, weak financial institutions, and ineffective macroeconomic stewardship, has led to one of the world’s worst peacetime economic performances in the last three decades. These underlying weaknesses are masked to some degree by sizable oil revenues, which buoy the per capita income level.
The Rouhani administration so far has no plan to address these long-term problems. The published recovery plan yields little more than slight changes to pre-Ahmadinejad economic policies, which clearly failed to generate sustained growth and keep inflation at bay. The plan does not offer innovative solutions, and reads instead as a wish list, invoking unrealistic assumptions and expectations (i.e. harnessing “hot money”) as the basis for delivering the desired outcomes (raising capital for investments in infrastructure). What is new in this document is the administration’s ill-advised intention to scrap the underwriting standards of the financial sector. Banks will as a result lend based on their own judgment rather than adhering to prudential lending practices. This policy will open the door for abuse and corruption and lead to financial suppression and credit rationing. In plain language, team Rouhani is setting the stage for a banking crisis in the not too distant future.
The document also demonstrates the limits to Iran’s macroeconomic policy toolbox. Since the mid-1980s, officials have removed interest rate targeting from policymaking. Monetary authorities have in response increased the money supply. But in the absence of a developed and active debt market, this process leads to an almost irreversible expansion of the monetary base and perennially high inflation. For example, the optimism that accompanied Rouhani’s election last year, along with his team’s success in engaging the P5+1, led to reduced inflation expectations and an initial drop in actual inflation from 40 percent to 25 percent. However, the administration freely admits that the monetary base expanded by 27 percent in the 2013-2014 fiscal year. Simply put, we can confidently predict another episode of high inflation for 2014-2015.
Turning the interest rate into a political and religious issue—by implementing no-interest Islamic banking—has led to a host of unsavory consequences. In the absence of market-based interest rates, investors cannot perform accurate cost-benefit analysis and are more likely to shy away from long-term investments. Because private investment is the main catalyst of job creation, high unemployment and low productivity continue to plague Iran’s economy.
To address these long-term problems, the Rouhani administration should have strengthened its decision-making institutions and enhanced their credibility. The administration has in practice done the opposite. Through repeated appeals to Shia clergy for support over quotidian issues, Rouhani’s team has inflicted long-term damage to the authority and effectiveness of economic institutions.
A year into his tenure, Rouhani must reassess his economic policies and his economic team. He holds the future of 78 million people in his hands. Clinging to tried and failed policies will not unlock the gates to a brighter future.
1. Mohammad Reza Nemat-Zadeh, minister of Industry, Mining, and Trade – July 30, 2014. ↩
Reconciling the Irreconcilable
Karim Sadjadpour
Karim Sadjadpour, Senior Associate at the Carnegie Endowment for International Peace.
During Iran’s 2013 presidential campaign, Hassan Rouhani marketed himself to a wary Iranian public and hardline political establishment as the man who could reconcile the ideological prerogatives of the Islamic Republic with the economic interests of the Iranian nation. Iran needn’t decide whether to wage Death to America or détente, whether to resist the global order or reintegrate with it, or whether to be theocratic or democratic. Under his leadership, Rouhani implied, the Islamic Republic of Iran could do it all.
From the outset of his presidency, Rouhani understood that Iran’s economic malaise could not be reversed without lifting sanctions, and lifting sanctions requires a nuclear deal. He accordingly invested all of his political capital in foreign policy rather than domestic affairs, and refrained from unsettling Iran’s conservatives—whose support he needs to secure a nuclear compromise—with talk of democracy and human rights. Iranian civil society nonetheless patiently accommodated him, hoping that a more relaxed external environment could usher in a less repressive domestic environment.
One of Rouhani’s greatest advantages as president has been that his bombastic predecessor, Mahmoud Ahmadinejad, set an incredibly low bar for competent management and public diplomacy. Indeed some of Rouhani’s most tangible achievements have been simply undoing the damage wrought by Ahmadinejad, such as restoring relations with the United Kingdom that were severed after a government-sanctioned mob ransacked the British Embassy in Tehran in 2011.
Most importantly, Rouhani deserves credit for helping to normalize direct dialogue between Tehran and Washington. For three decades the nearly sole method of communication between the two countries had been public threats and invectives. While mutual antipathy remains, today U.S. and Iranian officials communicate regularly via email and telephone, when they aren’t negotiating in European hotels. Rouhani himself broke a 35-year Islamic Republic taboo by talking via phone with President Obama.
But Rouhani has had less success moderating the revolutionary principles that most animate the U.S. Congress, namely Iran’s active rejection of Israel’s existence and support for militant groups such as Hezbollah, Islamic Jihad, and Hamas (a once-fraught relationship that rekindled after Israel’s recent onslaught in Gaza). Nor has Tehran’s support for the Syrian government wavered, despite Bashar al-Assad’s brutality—including an August 2013 chemical weapons attack just weeks into Rouhani’s tenure that killed, by some estimates, nearly 1500 people, including over 400 children.
This record, together with worsening human rights and a still-elusive nuclear deal, has led to public disillusionment with Rouhani. Such criticism is misdirected. Rouhani is at best second lieutenant to Supreme Leader Ayatollah Ali Khamenei, a rigid 75-year-old ideologue whose goal is to conserve Iran’s revolutionary principles, not alter or dilute them. After eight years of Mahmoud Ahmadinejad, an exasperated Iranian public and international community had unrealistic hopes that Rouhani, a pragmatic regime insider, had both the will and ability to bring fundamental change.
While Rouhani’s international detractors—such as Israeli Prime Minister Benjamin Netanyhayu—accuse him of being duplicitous, Rouhani’s domestic supporters worry that the fate of his presidency rests largely on a nuclear deal he does not have the authority to consummate. He must convince a skeptical Khamenei that Iran is giving up a little for a short time in exchange for a lot, while a skeptical U.S. Congress must be persuaded that Iran is giving up a lot for a long time in exchange for a little. This will be a much taller order than the November 2013 interim nuclear deal.
Rouhani’s greatest asset is the fact that a clear majority of his population and much of the outside world want Iran to emerge from political and economic isolation. Indeed, there are few nations in the world with a greater gap between what they once were and what they aspire to be. Rouhani’s popular mandate was, in essence, to narrow this gap. But the Islamic Republic’s 35-year history has shown us that what hardliners lack in popular support, they make up for in coercive strength. And unless and until Iran prioritizes national and economic interests before revolutionary ideology, it will continue to remain a country with enormous but squandered potential.
