Hassan Rowhani: the new man in Iran

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EIU: Hassan Rowhani, a moderate conservative cleric, has won a landslide victory in Iran’s presidential election. His victory reflects a consolidation of support for a president who will prioritise reversing the negative momentum in Iran’s economy. Mr Rowhani is also likely to take the Islamic Republic on a less confrontational path in its nuclear negotiations with the West. The new president will face challenges at home in accommodating the demands of regime stalwarts who will view any compromise on the nuclear programme as a defeat for Iran. However, the quick acceptance of the poll results suggests that Ayatollah Ali Khamenei, the supreme leader, is prepared to back up his new president to avoid any division in Iran’s leadership.

Mr Rowhani won over 50% of votes cast in Iran’s presidential election on June 14th, securing his victory on the first ballot and avoiding a run‑off vote, which had been widely expected. He far outpolled the other conservative candidates, including the popular mayor of Tehran, Mohammed Bagher Ghalibaf (who came second with just 17% of the vote), and the current chief nuclear negotiator, Said Jalili. Overall turnout in the election was high, at over 72%, compared with around 60% in 2005 and 85% in 2009.

Mr Rowhani is by no means a radical reformist and his election reflects voters’ concern over the economic effects of sanctions rather than a revival of the political reform project of the presidency of Mohammed Khatami (1997‑2005). But he is committed to seeking reconciliation internationally and to cautious reform at home. The vote also marks a dramatic swing away from the hardline, or principlist, conservatism under the eight‑year presidency of Mahmoud Ahmadinejad.

High turnout favoured Rowhani

The strong turnout—higher, as the Iranian media has noted, than the 57.5% turnout in last year’s US presidential election—shows that, whatever exiles say, most Iranians believe they are offered some meaningful choices within the Islamic system. The election has also highlighted continued rivalries within the principlist camp, with three credible candidates refusing to unite around a single figure. It has also shown the political durability both of the reformists and of the pragmatic conservatives associated with Akbar Hashemi Rafsanjani, a former president, despite their many setbacks since the suppression of unrest following the disputed 2009 presidential election.

The endorsement of Mr Rowhani by Mr Rafsanjani and Mr Khatami will certainly have boosted his campaign, but the extent of his win shows an appeal to voters beyond the political camps of reformists or the technocratically inclined pragmatic conservatives.

Why he won

A key point during the election was the third televised debate, in which Mr Rowhani and Ali‑Akbar Velayati, a former foreign minister, lambasted Mr Jalili, who has conducted Iran’s talks over the nuclear programme since 2007. The two‑pronged attack—especially from Mr Velayati, a long‑term adviser to Ayatollah Khamenei—smashed the earlier consensus among the candidates that the nuclear programme was in no way to become an election issue.

Iranian voters, who understand that tightening US-led sanctions over the past year have seriously squeezed the economy, were suddenly presented with the option of a president who, rather than just repeating a mantra of “resistance”, would work to reduce international tension while defending Iran’s interests diplomatically.

Economic priorities

Mr Rowhani won the votes of millions who were attracted in 2005 by Mr Ahmadinejad’s campaign against corruption and promise to “put the oil money on the sofreh (the square carpet on which poorer Iranians eat meals)”. Mr Ahmadinejad’s replacement of the state subsidies on everyday items, like bread and petrol, with cash payments has probably reduced inequality in the country. But prices have risen by 40% year on year in the first quarter of 2013 and unemployment has reached 15%, with around 30% of young people jobless. Many medicines have been in short supply, and the Iranian rial has fallen sharply since the advent of more stringent US and EU sanctions in 2012.

Whatever steps the Iranian authorities have taken to boost domestic production have been undermined by populist economic management, such as forcing the banking system into unsustainable lending, and by the effect of sanctions that have halved oil exports to around 1m barrels/day.

Mr Rowhani’s presidency will probably herald a less populist approach, but he did little in the election to advance coherent economic plans. His father was a bazaar merchant in Semnan, northern Iran, and Mr Rowhani’s inclination may be towards the more liberal economic policies followed under the Rafsanjani and Khatami presidencies before Mr Ahmadinejad’s election in 2005. But given the more immediate economic priorities, with the private sector battered by sanctions, inflation continuing to run high and exports constrained, any sudden blossoming of free-market economics is unlikely in the near term.

Sanctions and the nuclear programme

Mr Rowhani’s diplomatic credentials—widely discussed in the election—are clear. In leading negotiations in 2003‑05 with the EU over Iran’s nuclear programme as secretary of the Supreme National Security Council (SNSC) he took Iran closer to a substantial diplomatic agreement with the West than at any time since the 1979 Islamic revolution. Voters apparently share the judgement of one of the president‑elect’s fellow negotiators, Hossein Mousavian, who in his 2012 memoirs called the 2003 Saadabad agreement with the Europeans “a comprehensive step forward” that “opened a middle road between submission and confrontation”.

But the simple fact that Mr Rowhani failed—in the sense that the Saadabad agreement had broken down by 2005—illustrates the challenges he will now face as president in reaching out for ways to reduce international tensions both around the nuclear programme and around Shia‑Sunni regional conflicts enflamed by the escalating violence in Syria.

Although the president will need to manage the hopes of reformists expecting greater political freedoms, he will also face renewed criticism from principlist conservatives who back in 2003‑05 argued that he was selling out Iran’s interests by suspending uranium enrichment as a goodwill gesture during the talks with the EU. Mr Rowhani’s strong electoral mandate will strengthen his hand, but he will also need to maintain his close relationship with Ayatollah Khamenei, who appointed him to the SNSC and who personally entrusted him in 2003 with negotiating with Europe.

Ayatollah Khamenei has shown on several occasions—including through his 2006 decision to back direct talks with the US over Iraq—a willingness to face down principlists who oppose any dialogue with the “Great Satan”, and Mr Rowhani will need the leader’s backing to fend off principlist attacks. A key concern for Ayatollah Khamenei is that Iran is able to avoid the public disunity within its leadership that has been so prevalent since 2011, when Mr Ahmadinejad publicly rebuffed the supreme leader’s directives over cabinet allocations. Establishing a manageable relationship with Mr Rowhani will help the supreme leader to co‑ordinate support among conservative elements in the regime, including the powerful Revolutionary Guards, for any changes to the nuclear programme.

Just as importantly, Mr Rowhani will also need negotiating partners, including an Obama administration that can recognise that Iran has national interests in pursuing a nuclear agenda and can accept that an agreement is possible to limit Iran’s nuclear programme while accepting it will continue uranium enrichment. Attention will now turn to the next round of nuclear talks, set to take place by August. Mr Rowhani’s victory and more workable negotiating style may mean that the pattern of escalating tensions may be avoided in future negotiations.