Alaco

20.11.2015 | Iranian reformers face hardline backlash over nuclear deal

The historic deal to limit Tehran’s nuclear programme in exchange for the lifting of sanctions is fueling a backlash from Iran’s hardliners keen to ensure that their dominant position within the country is not undermined by the deal.

When reformist President Hassan Rouhani and his allies secured the nuclear agreement back in July, many Iranians were jubilant.  Having suffered the depredations of a sanctions-racked economy and international isolation for years, they saw the prospect of an improvement in living standards and better relations with the West as a major turning point for the country.  However, for the hardline military and security establishment, centred around Iran’s Revolutionary Guards Corps (IRGC), the deal was a bitter pill to swallow.

Many hardliners will have been humiliated by the neutering of the country’s nuclear weapons capability, which has been central to Iran’s regional power aspirations.  But the endorsement of the deal by their Supreme Leader, Ali Khamenei, left them little choice in the matter.  Though even they understood that something drastic needed to be done to resuscitate the economy and maintain social peace.

What unnerves them is the possibility of Rouhani and his supporters becoming more influential, and the country evolving into a more open, competitive market, threatening their grip on the economy.  These concerns appear to have prompted the IRGC  and its acolytes to flex their muscles since the nuclear deal was struck – making it clear that they are not about to roll over.

Last month Iran tested a new, long-range ballistic missile, which American ambassador to the UN Samantha Power described as a clear violation of a Security Council resolution.  In recent months there have been arrests of Iranian journalists, activists and intellectuals.  A prominent American-Iranian businessman visiting to promote commercial ties with the West has also been detained.   The head of the IRGC, Ali Jafari, has spoken against “trusting the West and believing in liberalism”.  And significantly, Khamenei has joined in the rhetoric, warning that US influence could undermine the country’s revolutionary values.

The hardliners will no doubt hope that their tactics will discredit and demoralise the reformists and intimidate their supporters in advance of parliamentary elections next February.  But while the IRGC is keen to keep its opponents in check, it stands to gain whether or not the nuclear agreement delivers the economic prosperity that Iranians so crave.

Already, the deal has led to Iran’s inclusion in talks over the future of Syria, enhancing Tehran’s position as a legitimate player in the region.  The lifting of sanctions will unfreeze Iranian assets, many of which are controlled by the IRGC, enriching the organisation overnight.  And further financial dividends will accrue if foreign investors invest in companies in which its member or their associates have a stake.

But it could be some time before the economic benefits associated with the removal of sanctions filter down to ordinary Iranians, especially if the anti-western clamour persists.  Investors have shown growing interest in the country, drawn by its vast natural resources, technological capabilities and young and educated population.  However, investing in Iranian companies could be frustrated by the fact that even after nuclear deal-related sanctions are lifted, separate American and European Union measures – connected to terrorism and human rights abuses – against certain IRGC-linked companies will remain in place for varying periods of time.

If you add open hostility to their presence, many foreign investors could be deterred.   And the longer Iranians have to wait for tangible improvements in their standard of living, the more likely they are to become disillusioned with the reformists, which will play into the hands of the hardliners.