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Case Analysis 04 April, 2012

Iran in the Wake of the Ninth Legislative Elections

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The Unit for Political Studies

The Unit for Political Studies is the Center’s department dedicated to the study of the region’s most pressing current affairs. An integral and vital part of the ACRPS’ activities, it offers academically rigorous analysis on issues that are relevant and useful to the public, academics and policy-makers of the Arab region and beyond. The Unit for Policy Studies draws on the collaborative efforts of a number of scholars based within and outside the ACRPS. It produces three of the Center’s publication series: Situation Assessment, Policy Analysis, and Case Analysis reports. 


Iran in the Wake of the Ninth Legislative Elections

The results of Iran's ninth legislative elections since the 1979 Islamic Revolution confirmed the expectations of many that supporters of the supreme leader, Sayyed Ali Khamenei, would defeat those of the president, Mahmoud Ahmadinejad. The results come at a time of increased economic difficulty, heightened sanctions and political impasse. The challenge facing Khamenei's supporters will be to answer these resultant economic, political, and social demands, which are combined with a genuine increase in foreign threats.


Domestic Challenges

Quite naturally, the Iranian authorities downplay such domestic challenges, putting a brave face on events and suggesting to the outside world that Iran is internally cohesive; as far as they are concerned, everything is going smoothly. The minister of interior, Mustafa Najjar, illustrated this state of normality by asserting that participation in these most recent elections stood at 64 percent of the electorate, 13 percent higher than the previous round in 2008. While official figures show participation at 48 percent in the capital, Tehran, it reached 89% in the province of Kohgiluyeh and Boyer-Ahmad.[1] Within this context, Khamenei's supporters took three-quarters of the seats in the 290-strong legislature outright, and analysts suggest that most of the 100 or so supposed "independents," who are widely described as technocrats, are more likely to support Khamenei than Ahmadinejad.
By contrast, opponents of the regime from various camps have postulated that participation in the polls did not exceed 30 percent. Some opposition groups have described the elections as a "fiasco revealing the isolation of the regime". They have disseminated media reports, backed by documented audiovisual materials, which purport to show inconsistency in official statistics, which critics describe as a product of the government's "sophisticated, engineered [approach to] fraud". To bolster their arguments, opposition figures point to the Iranian authorities' having blocked independent youth observers and foreign election monitors from monitoring the process, and to the restrictions placed on foreign journalists, whose movements were limited to pre-defined polling stations. In addition, say opposition figures, voters were allowed to cast ballots without having to show their national identification papers.

The boycotting of the elections by significant sections of the reformist camp (led by people such as Hussein Moussavi) was predictable; far more remarkable was that eight senior clerics - including Ayatollah Sayyed Ali Dastgheib, Ayatollah Youssef Sanei, Ayatollah Hussein Rouhi Khorasani and Sayyed Abdul Karim Moussavi Ardebili - and even the president's sister, Parvin Ahmadinejad, who was one of three defeated candidates, all filed complaints about alleged electoral fraud in the Ahmadinejads' hometown of Garmsar, citing "widespread accusations of vote-rigging" in their constituency and demanding that the official results be annulled.

Amid all the confusion, it is very difficult to determine the effectiveness of competing calls for boycott and heavy turnout; what is clear is that the domestic political impasse gripping before the elections remains in place. The poll results have enabled Khamenei's supporters to tighten their grip on the levers of power, and to further weaken reformist figures, who continue to be branded by official media as "those lacking insight" and "the fitna [strife or sedition] trend". In particular, the siege has been tightened on regime antagonists Mehdi Karroubi and Hussein Moussavi, who have been under house arrest for more than a year. Several other opposition figures have been jailed or forced to leave the country; the latter are therefore forced to seek political change from abroad, continuing their work from within international media organizations and pressure groups.

Ahmadinejad's faction, which just a few years ago was part of the machine purging reformists, now finds itself on the outside looking in: his supporters are now being excluded from key positions by Khamenei's. This is part of the same long-running power struggle which, last year, saw the supreme leader block the president's attempt to dismiss Intelligence Minister Haidar Muslehi. Khamenei's supporters are now employing some of the same tactics used against the reformers following the 2009 presidential elections; especially since the legislative polls, now it is Ahmadinejad's followers who are accused of "deviance," undermining the Islamic system, and being complicit in wide-scale corruption. This purge is understood to be a clear message to all concerned that any and all challenges to the regime will be met by the ruthless use of force, and that those responsible will be expelled from the political process. In this way, as predicted by an earlier paper published by the Arab Center for Research and Policy Studies,[2] the field is left wide open for competition among conservative movements eager to secure the favor of Khamenei, who enjoys particularly strong support from the Basij volunteer militia.  


External Challenges


As for Iran's foreign relations, the recent elections did not differ much from previous ones, as the Israeli and American threats were prominent factors at all stages of the electoral process. Khamenei asked the Iranian people to turn out for the polls in strong numbers in order to deter foreign aggression.

Likewise, the stance of the international community does not seem to have been influenced by the elections or their results. Japan, for instance, incrementally tightened its sanctions by banning Japanese financial institutions from dealings with Iran's third-largest bank, Tejarat, bringing the number of Iranian banks proscribed by Tokyo to 21. This same timeframe saw the publication of an international report on human right abuses in Iran, as well as the release of a statement by the head of the International Atomic Energy Agency accusing Tehran of non-cooperation with it.

Israel's apparent agreement, under concerted US pressure, to hold off on air strikes against Iran's nuclear facilities appears not only to indicate that the Americans want to avoid getting involved militarily with the Iranians (at least for now), but also to confirm that periodic Israeli threats amount to blackmail aimed at strengthening international sanctions against Iran. Theoretically, this would weaken the Islamic Republic's economy at precisely the same time that it might be drawn into an arms race, leading to heavier military outlays just as revenues are declining and, therefore, a collapse of the regime like that witnessed in the former Soviet Union.


Economic Challenges

Economic indicators do seem to point in the direction of a Soviet-style collapse of the Iranian economy. Even the semi-governmental Fars news agency admits that Iran's economy grew by just 2.5 to 3 percentage points in 2011, while inflation was estimated at somewhere between 20 percent and 22.5 percent.[3] These kinds of difficulties have been reflected in the Iranian Riyal, which has seen a huge drop in its value over the past few months. Uncertainty is driving some of Tehran's wealthiest businessmen to rely on the US Dollar as the preferred currency of exchange.[4]

At the same time, the value of Chinese imports to Iran reached an estimated USD 4.5 billion[5] during 2011; this did not make it any easier for Ahmadinejad to sign an agreement with Beijing which the Baztab Amrouz ("Reflections Today") news website dubbed "unfair to Iran," and which others have described as the worst economic agreement signed by Iran since the 1979 revolution. As part of this agreement, the Iranian authorities undertook to set aside funds earned from the sale of Iranian oil to China as collateral for future Chinese exports to Iran.  Baztab Amrouz estimated the scale of these funds, to be kept in Chinese bonds, at around USD 25 billion.[6] On a related note, some economists see Iran's agreement with India, which calls for the latter to pay for 45 percent of its oil purchases in rupees, as a painful blow to the Iranian economy.

The effects of all this on the Iranian financial system were brought home by a report published by the Mehr News Agency. The report states that the Iranian authorities have withdrawn up to 2,700 billion Tomans (about USD 2.2 billion) from the accounts of seven domestic banks, which the government refers to as the currency exchange fluctuations due to when these banks purchased currency from the Iranian Central Bank.[7] It has been widely suggested that the government's actions stem from an inability to finance the second phase of state subsidies for Iranian families. The Parliament's Economy and Finance Committee,[8] as well as the Accounting Court and the House Budget and Finance, have both released reports pointing to irregularities in the use of the country's oil and gas revenues.[9] These worries recently drove Khamenei to state that "it is necessary for government officials of the country to change their outlook on oil ... Oil must stop being used as a source of income and for funding the country's budget and instead become a source for the progress and economic might of the country."[10]


Possible Outcomes

A number of factors will affect how this situation plays out in Iran. Apart from the domestic factors discussed above, issues relating to the ongoing conflicts in Iraq and Syria also could influence events.


Scenario I: Khamenei Seizes Total Control


The first possibility is that of the complete domination by Khamenei's camp of the presidency, thereby completing the monopolization of all state authority by the supreme leader and his backers. This would fit with Khamenei's stated intention to turn the country away from a presidential system and into a parliamentary one, a state in which the president would be appointed by the members of legislature. Some saw that such a set-up would put an end to the chronic conflict between the presidency and the post of supreme leader, which is widely believed to have been built into the Iranian political system. This step might be a cause for internal conflicts between various conservative wings; it follows that this approach of expelling all dissidents from the structures of power would ultimately lead to a situation in which the government lost its ability to control the country's social and economic affairs, which are already in disarray.

In such a scenario, the regime would have to double its efforts to contain any public outcry against the further concentration of power in the hands of the supreme leader, who already holds the clerical position of vali-e-faqhi (the supreme religious jurist who leads the nation), a task made more difficult by the fact that the opposition would likely then be bolstered by others who were previously members of the conservative movement. Many diverse actors would then search for ways to unite and coordinate their efforts to combat the regime, possibly including the formation of a joint national council, based outside of Iran, which formally requests the international community's support. It is highly unlikely that the Iranian opposition would request foreign military intervention, but it would be very difficult for Khamenei to ensure that any given parliament will produce the requested presidential candidate; thus, even should Khamenei's plans succeed, what results may well be increasingly pointed confrontations.


Scenario II: A Compromise


Faced with increasing Western pressure and sanctions, and the swelling of the ranks of those religious and political actors opposed to Khamenei's policies, the Iranian regime may have to reach some sort of compromise with the reformers. Such an arrangement would have to allow these reformers at least partial participation in the political process. The price for such a concession would be a declaration of loyalty by the reformers to the supreme leader. Indications that this scenario is likely include the following:  

1. Former President Mohammed Khatami's participation in the elections, despite statements suggesting that the Reformist camp with which he is associated would be boycotting the process. While Khatami himself said that his action was taken in his capacity "as a citizen" and not "as a politician," it obviously left the possibility of his return to the political stage wide open, perhaps as an intermediary between the regime and the reformers. Khatami has even suggested that this kind of tactic would be a way to out-maneuver extremists within the conservative camp.

2. As reported by numerous reformist websites, Khamenei's son Mojtaba visited Moussavi, who is under house arrest, on the eve of the elections. Mojtaba Khamenei reportedly asked Moussavi to step back from some his previous political stances, appealing to the latter's sense of the need to protect the Islamic regime. Moussavi's response was that he had nothing to say while he was detained; he also stated that he would be prepared to meet with the supreme leader himself, face-to-face, provided that such a meeting could be arranged without the presence of cameras or other surveillance equipment. Moussavi further requested that he be allowed to address the Iranian people in a speech to be broadcast live on state television.

Both of these indications make clear that despite all of the conflicts between the two sides in recent years, a rapprochement between the regime and the reformists remains a distinct possibility. What both camps have in common is an understanding that any foreign military intervention would be immensely damaging to the country, wrecking its infrastructure and setting its development clock back several decades.


Scenario III: No Turning Back

It is quite possible that the regime, despite it significant popular support, has crossed the Rubicon into a territory where it can no longer take the adequate precautions needed, whether from friend or foe. Iran's regional and international isolation is a now source of weakness for the country; on a practical level, Iran is living under a siege which may last for several years. It is unlikely that the regime will ever fully regain its former strength, let alone become even stronger and more cohesive. This is particularly true given the dramatic changes afoot within the borders of Iran's Arab neighbors, especially given that its main ally, Syria, could very well see a change of regime. There is also the matter of the constant efforts by a number of foreign governments to contain the Iranian threat, to prevent it from surpassing a particular level of strength which would allow it to upset the status quo in the region vis-à-vis Israel and other important actors based in the Middle East. Within this setting, all that would need to happen for the Iranian regime to lose much of its room to maneuver would be for the Syrian regime to fall.

Whatever the case may be, if the Khamenei supporters who control the government cannot reach a compromise with the reformers and liberals who make up the opposition, the Iranian regime will find itself weakened and fragile. Readers should be reminded that the Soviet Union fell not as a result of a war. Overt Israeli and Western enmity toward Iran are forcing all Iranians into a position of national unity. Such national cohesion must be bolstered by an act of genuine national reconciliation between the opposition and the regime.

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[1] See official Iranian news sources: http://www.dolat.ir/NSite/FullStory/News/?Serv=8&Id=212723.

[2] "Iran: A conflict over authority, or a dispute over responsibilities?," Policy Analysis Unit, Arab Center for Research and Policy Studies, May 30, 2011, http://english.dohainstitute.org/Home/Details?entityID=5ea4b31b-155d-4a9f-8f4d-a5b428135cd5&resourceId=882bf269-76db-4e90-8226-25fdde763217.

[3] Fars News Agency, March 12, 2012, http://www.farsnews.com/newstext.php?nn=13901222000032.

[4] Mehr News Agency, February 29, 2012, http://www.mehrnews.com/fa/newsdetail.aspx?NewsID=1546773.

[5] Parsine News, March 11, 2012, http://www.parsine.com/fa/news/59427.

[6] Saham News, March 10, 2012: http://sahamnews.net/1390/12/182452/.

[7] Mehr News Agency, March 12, 2012, http://www.mehrnews.com/fa/NewsDetail.aspx?NewsID=1557624.

[8]  Islamic Republic News Agency , March 5, 2012, http://www.irna.ir/Newsshow.aspx?NID=80023631.

[9]  Aftab News Agency, September 28, 2011, http://aftabnews.ir/vdcbssb8srhbfsp.uiur.html.

[10] "Supreme Leader calls on officials to stop using oil as source of income," Fars News Agency, March 13, 2012, http://english.farsnews.com/newstext.php?nn=9012152144.