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Year-Ender: Iran Looks To Build On Momentum

December 26, 2015
by Golnaz Esfandiari

Months of intense nuclear negotiations between Iran and major world powers dominated the headlines in 2015. In 2016, we get to see the first signs of how the deal that was reached will shape the future of the Islamic republic.

Two major elections slated for February 26 -- likely before economic sanctions are lifted when the deal goes into effect sometime in the first half of 2016 -- promise to make it a momentous year in Iran.

One, in which voters will choose a new parliament, has the potential to reshape the conservative-dominated body and bring changes that can be seen at the local level. The other, for the Assembly of Experts, could determine the successor to Supreme Leader Ayatollah Ali Khamenei -- the highest authority in the Islamic republic.

Parliamentary Shift?

The current parliament, elected in 2012, is dominated by hard-line conservatives who have made life anything but easy for President Hassan Rohani. The relative moderate reached the presidential office in 2013 on pledges of economic and social reforms, and the promise of working with the international community to end the standoff over Iran's contentious nuclear program.

The hard-liners voiced their opposition to a nuclear deal throughout the negotiation process, however, and pressured Rohani over his efforts to give Iranians more social and cultural freedom.

If pro-government and more moderate candidates were to gain seats in parliament, it could, at least in theory, give Rohani a freer hand to push his economic initiatives forward and position him to win a second term.

The reality, however, is that the clerical establishment holds sway over who sits in office, and while Rohani is himself part of that establishment, it is dominated by more conservative elements. He would still face opposition from hard-liners in charge of key institutions, including the judiciary and the Islamic Revolutionary Guards Corps (IRGC).

Alireza Nader, a senior Iran analyst with the Rand Corporation, does see some room for Rohani's camp to make gains, however.

'You can imagine economic technocrats associated with Rohani getting elected into the parliament as long as the regime doesn't view them as overly threatening,' Nader said.

Apparently seeing an opening, reformists who have been marginalized since their political era ended in 2005 have set up two new parties and have become politically more active.

But Nader says the return of a reformist majority to parliament is not going to happen -- at least not in 2016.

'You're not going to see any reformist or reformist-aligned candidate be able to get into the parliament,' Nader said. 'They're going to have a very difficult time.'

Supreme Decision?

The Assembly of Experts is tasked with selecting the supreme leader and monitoring his work.

Potential candidates are vetted by the 12-member Guardians Council, whose composition is heavily influenced by the supreme leader. The body has a record of disqualifying pro-reformists and those who are not deemed to be loyal enough to the supreme leader.

The 2016 elections are of particular importance for the Iranian establishment because the upcoming Assembly of Experts could choose the successor to Khamenei.

The current supreme leader is 76 year old and, according to unconfirmed reports, was treated for prostate cancer in 2014. Although Khamenei's purported health issues have led to speculation about what might happen in the event of his departure, particularly if more moderate figures entered the Assembly of Experts, expectations for major change should be tempered.

That is because Khamenei is likely to make sure that his loyalists will dominate the next assembly, according to the Rand Corporation's Nader.

'I think we can predict comfortably that you'll see the same sort of assembly as before,' Nader said. 'It's most likely going to be a very conservative pro-Khamenei assembly.'

Prominent Iranian analyst Reza Alijani expects the vetting by the Guardians Council to be 'sharp.' But he notes that election results are typically difficult to predict in Iran

'Iranian society is full of surprises,' he said. 'If the political forces, civil society, and the government become active, particularly regarding the vetting process, then we could see some [changes] in the [Assembly of Experts].'

A potential wild card adds to the intrigue. Hassan Khomeini, a grandson of Islamic republic founder Ayatollah Ruhollah Khomeini, has entered politics with an eye on gaining a seat in the Assembly of Experts.

A close family member told the ISNA news agency in December that the 43-year-old Khomeini was registering as a candidate. Khomeini has been described as a reformist who believes the aims of his grandfather's Islamic Revolution are misunderstood. He is reportedly close to reformist President Mohammad Khatami, who held office from 1997-2005.

Also running is Akbar Hashemi Rafsanjani, a centrist political figure who was president from 1989-97, and served as the head of the Assembly of Experts from 2007-11.

Tense Times

The upcoming election year can be expected to be filled with political tension.

Analyst Reza Alijani pointed to the candidacy of Rafsanjani and other high-profile figures as one potential bone of contention, should the Guardians Council decide to disqualify them as candidates for the Assembly of Experts.

Another is the long-simmering power struggle between President Rohani and hard-line conservatives, which could boil over in the weeks leading up to the February elections.

In 2015, the two sides openly disagreed as Rohani emerged as the main voice arguing the benefits of reaching a deal with world powers over its contentious nuclear program. As 2016 approached, their differences were again exposed when Rohani criticized the arrests of several journalists and others-- including an Iranian-American businessman and a Lebanese information-technology expert.

Rohani accused conservatives of using a warning by Khamenei about alleged U.S. infiltration efforts as an excuse to detain opponents.

But analyst Alijani says that Rohani could face increased pressure even among average citizens to deliver on campaign promises to improve living standards, lower the unemployment rate,and give Iranians more freedom.

'In my view after a new parliament -- that is likely to be more in line with the government -- comes into power, the extent to which Rohani and the government will be willing to deliver is the most important domestic issue in the coming year,' Alijani said.

Speaking from Paris, Alijani said Rohani will have to give 'a clear answer' amid the high expectations and demands of civil society and public opinion.

Relationship Questions

Ties between the Islamic Republic and the United States markedly improved in 2016, as evidenced by the negotiations that resulted in a deal under which Iran agreed to limit its nuclear activities in exchange for sanctions relief.

The scene would appear to be set for Tehran and Washington to consider engagement on other regional issues, such as fighting the Islamic State (IS) group.

'I think essentially what Khamenei wants is to receive sanctions relief, prevent any sort of domestic reform in Iran, and limit engagement with the United States,' Nader said. 'On certain issues, he would be open to engaging the United States within an international setting.'

In October, Iranian Foreign Minister Javad Zarif participated in international peace talks on Syria held in Vienna, attended by representatives of the United States and other countries.

But any possible cooperation is complicated by Iran's support for its ally, Syrian President Bashar al-Assad, whose departure from office is demanded by Washington.

'Iran's support for its Syrian ally has been steadfast, sustained, and consistent since the beginning of the crisis,' said Olivier Decottignies, a diplomat in residence at the Washington Institute for Near East Policy. 'Tehran will continue to leverage developments such as Russia's military involvement in Syria and the growing threat posed by IS to pursue its own policy objectives in the Levant.'

Going by the surge of anti-U.S. rhetoric among hard-lines after the July nuclear agreement was announced, there will be fierce resistance to any attempt to improve ties with Washinton.

Ultimately Khamenei has the last say, and he warned repeatedly in the last weeks of 2015 about alleged U.S. efforts to undermine the Islamic republic.

In October, he barred further direct talks with the United States, saying it would inflict 'countless harms' on Iran.

Road To Recovery?

When the nuclear agreement is fully implemented, the gradual removal of economic sanctions will follow, removing a major obstacle to foreign investment. Iran would also gain access to frozen funds, estimated to be more than $50 billion, that the country could use to revive struggling industries and reduce unemployment.

Iran is also set to increase its oil exports, which were cut by nearly half as the result of the sanctions. Iran's Oil Minister Bijan Zangeneh said in November that Tehran plans to export an additional 500,000 barrels of oil a day once sanctions are lifted.

Garbis Iradian, chief economist for the Middle East and North Africa at the Institute of International Finance, projects a surge in economic growth for Iran.

'Lifting economic sanctions, combined with the return of foreign expertise to the energy sector and import of spare parts, would allow for crude-oil exports to rebound to their pre-sanction levels by end-2016,' Iradian wrote in comments emailed to RFE/RL. 'Assuming all goes smoothly, growth could accelerate from about 1 percent in fiscal years 2015/16 to 6 percent in fiscal year 2016/17.'

Rohani described the July deal as the beginning of 'co-operation with the world,' and almost immediately foreign business delegations started lining up to enter the Iranian market.

Iradian noted that international companies have shown particular interest in helping develop Iran's energy sector, which suffers from great infrastructure deficiencies. Tehran has been favorable energy contracts that could encourage investment in the sector, which Iradian estimates needs at least $100 billion over the next five years to make up for under-investment in the past decade.

Decottignies, who served as second counselor in the French Embassy in Tehran from 2012 to 2015, is less bullish, and expects European investors to step carefully.

"While European companies are eager to benefit from Iran's economic potential, their exposure to the U.S. market – and thus to U.S. courts and regulators – commands caution,' Decottignies said. 'The [Joint Comprehensive Plan of Action] (JCPOA) provides that agreed guidelines will be published for businesses."

He concluded that "clear and fair rules are needed" before significant investment is seen.

Source: http://www.rferl.org/content/iran-year-ender/27450474.html

Copyright (c) 2015. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036.

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