Rouhani has his chips on a deal

On Thursday, the Wilson Center hosted a panel discussion entitled Rouhani at Two Years: An Assessment on the Cusp of a Nuclear Deal. Panelists included Robin Wright, USIP-Wilson Center Distinguished Scholar, Suzanne Maloney, Interim Deputy Director and Senior Fellow, Saban Center for Middle East Policy at Brookings and Karim Sadjadpour, Senior Associate at the Middle East Program, Carnegie Endowment for International Peace. Haleh Esfandiari, the outgoing Director of the Middle East Program at the Wilson Center, moderated. The panelists related how the Iranian people are largely motivated by economic concerns today. President Rouhani has staked his political future on improving the economy. A nuclear deal is the linchpin of his plan.

Wright has visited Iran three times in the past 18 months and has witnessed tremendous change. The political climate has become more stable because people are tired of years of oscillation between reformists and hardliners. Supreme Leader Khamenei has pushed back attempts by hardliners to scuttle a nuclear deal. No one in parliament wants to say that they are against a deal outright. However, the current climate of stability is unlikely to last; political divisions run deep.

Wright said that Rouhani has implemented bold economic reforms, including subsidy reductions that led to a 40% increase in gas prices. He has also fought corruption. His administration has carefully studied the potential aftermath of a nuclear deal and has been in talks with numerous international companies.

Rouhani has not tackled human rights abuses. Public expectations that he would do so have ebbed. Arrests of journalists continue. The judiciary is a hardline check on change. The public is no longer heavily motivated by the causes of the Islamic Revolution and cares more about material concerns like the economy and pollution. There are 14 million Tehranis, but only 100,000 go to Friday prayers and chant “death to America.” The public is looking ahead to the upcoming elections for both parliament and the Assembly of Experts. Ayatollah Khamenei is ailing, so the next Assembly of Experts will likely pick his successor.

Wright sees Rouhani as worried about the crumbling Middle East. The Iranian government may approach Syria with increasing realism, and will ultimately walk away from Assad. Rouhani had wanted to reach out to Saudi Arabia and the Gulf Cooperation Council but tensions have only increased.

Maloney agreed that economic concerns are central for Rouhani. Government performance, not adherence to revolutionary ideals, is now key to legitimacy in the eyes of the public. Rouhani criticized former President Ahmedinejad or the effect of his policies on the economy. Rouhani believes that Iran’s political system must help the economy and has pushed back against the economic role of the Iranian Revolutionary Guard Corps. Rouhani does not face as much opposition to economic reforms as Khatami and Rafsanjani faced. When Rouhani took office, inflation was at 45%. The technocrats he appointed imposed greater fiscal discipline and cut inflation to 15%. Economic growth has gone from negative to slightly positive. However, the government has fed the people unrealistic expectations for sanctions relief, which is unlikely in 2015.

According to Maloney, a deal is unlikely to transform Iran’s relationship with the West because Khamenei views the deal as transactional, not transformative. Rouhani can improve the economy and get some sanctions relief, but we are unlikely to see a significant change in Iran’s regional posture.

Sajadpour concurred that Rouhani is putting all of his eggs in one basket: achieving a nuclear deal with the West. If improving the lives of Iranians is a priority, then sanctions must be removed. Thus Rouhani has focused on a deal and not improvement of human rights. In 2005, Iran had robust oil exports, as well as a stronger civil society and more press freedom than exist today. Ahmedinejad was responsible for the damage since then, and a nuclear deal would represent Iran digging itself out of this hole.

Rouhani will have difficulty effecting change in other areas, Sajadpour said. He will not be able to fight the IRGC because he needs it to enforce a nuclear deal. Khamenei is crafty and holds the real power. The Supreme Leader has outlasted both his former kingmaker, Rafsanjani, and the reformer Khatami. Khamenei wields power without accountability, with a president who has accountability but lacks power. Saying “death to America” is not helpful for improving the economy for average Iranians, but the smallish minority that chants this holds a monopoly on power and coercion.

Sajadpour stated that Saudis and Israelis have good reason to fear a nuclear deal, since it provide more money to support for Hezbollah. It could also open up an opportunity for US-Iranian cooperation against common enemies, but we have to ask ourselves if enlisting Shi’ite radicals to kills Sunni radicals only creates more Sunni radicals.