Longview: The Political Climate Surrounding Iran’s Presidential Election

Iran is set to go to the polls on the 18th of June 2021 to vote for its next President, with the domestic picture in Iran continuing to be dominated by competition between different power networks. Nevertheless, with current reformist president Hassan Rouhani having reached its two-term limit, many predict a shift towards a more “principlist” candidate, possibly coming from inside the country’s military apparatus. Such a choice would reflect the Rouhani Administration’s failure to live up to its promise of economic prosperity through sanction relief, brought about by the reconciliation with Western powers in exchange for nuclear supervision of the country’s nuclear program. 

The majority of the Iranian population views the economic situation as getting increasingly worse. It places most of the blame on state corruption and financial mismanagement instead of the Covid-19 pandemic or US sanctions

Consequently, despite the significance of shifts in the international arena, especially with Biden’s election in the US, domestic economic issues remain highly salient in the upcoming election. The majority of the Iranian population views the economic situation as getting increasingly worse. It places most of the blame on state corruption and financial mismanagement instead of the Covid-19 pandemic or US sanctions. As such, a reported 64% of Iranians want the next President to be critical of current reformist president Hassan Rouhani and his policies. Moreover, while there remains a possibility that this scenario could change if Rouhani can show in the following months that he can return to the nuclear agreement (JCPOA) without any further concessions, his current lack of popularity along with the deal’s failure to provide substantial economic relief makes this unlikely.

While analysts predict that Rouhani and Biden will reach an agreement over a new interim deal, with sanctions being waived to unlock a portion of Iran’s 2 million b/d of shut-in crude exports, a final agreement remains to more complicated, due to Iran’s volatile political climate. Nevertheless, this hasn’t stopped Rouhani from submitting the country’s yearly budget starting in March, with an assumed quadrupole increase in oil sales. For Rouhani, boosting production is an existential matter if it wishes to deliver on his economic pledges and regain some of the popular support he lost for his reformist camp. 

The Biden presidency has also had significant effects on the country’s stock market. The TEDPIX, the main index of Iran’s stock exchange, skyrocketed following Biden’s win, mostly due to how Iranians saw equities as a hedge against the inflation created by US sanctions. Ultimately, most of the index companies are export-heavy firms such as petrochemicals and steel, which profit from a weaker rial. Nevertheless, while Biden’s win has increased hopes of a strengthened Iranian economy and the possibility of Iranian markets opening up to foreign partners, this will ultimately depend on June’s election results.  

The election comes against the backdrop of a reformist Rouhani Administration that failed to implement the promised economic and social reforms

The election comes against the backdrop of a reformist Rouhani Administration that failed to implement the promised economic and social reforms. These being central tenants of his election campaigns in 2017 and 2013. Currently, the country faces high unemployment, rampant inflation and the national currency is in free fall. Besides, the IMF has reported inflation is at 34.2 percent, while unemployment is at 16.3 percent. However, the country’s methodology for measuring unemployment involves considering one hour of work per week as employment. Moreover, when Rouhani entered office in 2013, the Dollar could be exchanged for 30,000 rials, while this year saw the rial falling to a record low 300,000 rials per Dollar. More importantly, these problems highlight the Rouhani Administration’s failure to bring about economic prosperity following the removal of nuclear sanctions by the JCPOA. This has prompted criticism from principlists members of Parliament regarding Rouhani’s decision to remain “committed to the principle of the agreement” following the Biden’s Administration indication that they would re-join the deal. Mojtaba Zolnour, the head of the Iranian Parliament’s National Security and Foreign Policy Committee, stated that Rouhani’s decision to return to full commitments to the deal “shows weakness“. As a result, Rouhani’s alliance of moderates and reformists has lost its standing among the Iranian population, with prominent reformist analyst Sadegh Zibakalam conceding that “people will not vote for reformists anymore”, and that as a result of Rouhani’s record, this faction “has no chance” of victory in the upcoming election. Moreover, despite various protests and riots in past months, due to the population’s delusion with the government’s handling of the Covid-19 economy, the regime’s stability is not under significant threat. With no challenges to its internal security, the country’s leadership is not considering significant political reforms. Nevertheless, the country’s government is hoping for a strong voter turnout in this upcoming election to sustain its legitimacy (unlike the 2020s legislative election which saw the lowest voter turnout since the 1979 election with 42%).

The two main candidates to look for are Parliament Speaker Mohammad Ghalibaf, and Hossein Dehghan, Defence and Armed Forces Logistics Minister. Dehghan remains one of the few candidates to have announced his presidential bid, while Ghalibaf hasn’t made an official statement yet. While Ghalibaf has been usually associated with the principlist camp and has close ties with Iran’s Islamic Revolutionary Guard Corps, he has been known to advocate for dialogue with the US, while also calling for the removal of American influence from the Middle East. He has welcomed Trump’s defeat and stated that new American President Joe Biden would transform Trump’s previous maximum pressure policy into “smart pressure“. Dehghan also has close ties with Iran’s Islamic Revolutionary Guard Corps, having held several positions in the organizations, including as leader of the facility’s southern Lebanon training center, which enabled Hezbollah’s creation. While Dehghan is not formally a member of any political faction or association, he is regarded as a hardliner due to his close connection to the Islamic Revolutionary Guard Corps. He is a harsh critic of Rouhani’s foreign policy, especially regarding the Nuclear deal. Other candidates who are expected to run are former president Mahmoud Ahmadinejad, Judiciary Chief Ebrahim Raisi, and former nuclear deal negotiator Saeed Jalili. 

According to an Iranian political journalist expert on Iranian domestic affairs, Raise and Ahmadinejad are also strong contestants, with Raise overtaking the former President in recent polls. Again, both candidates hold significant conservative and principlist stances. However, none of these candidates have officially confirmed their bid for the presidency. On the other hand, former reformist mayor of Tehran Mohammad-Ali Afshani, and former conservative reformist MP from Tehran Ali Motahari are two others who have recently announced their candidacy. However, according to the source, both are guaranteed losers due to their unlikelihood to get past the Guardian Council’s supervision. This stems from Afshani political connection to imprisoned reformist leader Mehdi Karroubi and Motahari’s history of disagreement with the regime. However, both candidates were not expected to gather significant support regardless. Nevertheless, potential candidates will most likely have to face-off against the Iranian Reformist front established this February to unite reformist parties under a single candidate. From this camp Vice President Eshagh Jahangiri remains a potential choice. Nevertheless, what has to be considered is the role of the Guardian Council’s power to veto presidential candidates, with more reformist candidates often barred from running, as was the case with a reported 7,000 members in the previous 2017 election.

At this point in time, it seems like principlist candidates are set to challenge the reformist base, who has lost support due to their poor handling of both domestic and international issues. Suppose an agreement can’t be reached between Rouhani and Biden regarding the nuclear issue. In that case, it will prove to be a significant boost for principlist candidates in the upcoming election. However, with the election cycle still months away, and with many candidates still waiting to be announced, the outcome is still uncertain. What is certain, however, is that the current balance of power is set to change significantly.

The Editor: Nader Di Michele

Nader is a third-year Politics BSc student at King’s College London (KCL). He has significant experience conducting various geopolitical risk analysis, particulalry focusing on Middle Eastern domestic and international politics. His main focus is Iranian and American foreign policy, especially regarding the role of sanctions. Nader also has well-founded knoweldge of the various risks and future opportunities of ESG finance

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