Iran economy | Iran’s politics hinges on trajectory of ‘resistance economy’ 

Iran’s politics hinges on trajectory of ‘resistance economy’ 

M.K. Bhadrakumar June 3, 2016 10:15 AM (UTC+8)
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The election of the interim speaker of the Majlis (parliament) last week turned on its head the western hypothesis that the February parliamentary poll strengthened the “reformist-moderate” camp as against the “principalists” or conservatives in the legislative body.

On Sunday, the Majlis elected a famous “principalist,” Ali Larijani, former speaker and a close aide to Supreme Leader Ali Khamenei, as the new interim speaker. He won 173 votes against the “reformist-moderate” candidate Mohammad Aref’s 103 votes in the 290-member Majlis.

Iran's parliament speaker Ali Larijani holds a news conference in Istanbul January 22, 2015. REUTERS/Osman Orsal
Iran’s parliament speaker Ali Larijani holds a news conference in Istanbul January 22, 2015. REUTERS/Osman Orsal

Again, on Tuesday last week, Ayatollah Ahmad Jannati, another famous name in the “principalist” camp, secured 51 votes to get elected as the new head of the 84-member Assembly of Experts.

Jannati trounced the “reformist-moderate” candidate Ayatollah Ebrahim Amini who could muster only 21 votes despite backing from President Hassan Rouhani and former president and the grey eminence of Iranian politics Hashemi Rafsanjani.

What shift means

How does this development enhance our understanding of Iranian politics? More important, what do they presage for Iranian policies?

Clearly, there has been much “cross-voting” and the “principalist” candidates attracted much support from outside their camp.

What emerges once again is the futility of branding Iranian political elites. Factions keep mutating, depending on circumstances and issues – and personalities. Which, of course, is indicative of a vibrant political arena.

Take the Assembly of Experts. It is, arguably, the most powerful organ of the state – not only because it is an exclusive body of influential clerics in the religious establishment (and the only body of clerics which is directly elected) but is invested with seamless powers to elect the Supreme Leader, supervise his functioning and even replace him.

Ayatollah Jannati, 90 years old, also heads since 1988 the Guardian Council, which interprets the constitution and supervises elections, and is a member of the Expediency Council, which enjoys supervisory power over all branches of the government.

Besides, he is a hugely influential theologian, being the co-founder of the Haghani School (whose seminary in Qom is often described as the “Ecole Nationale d’Administration of the Islamic Republic of Iran.”)

Jannati’s election as the head of the Assembly of Experts is a vehement assertion that Iran’s system of velayat-e-faqih (‘guardianship of the Islamic jurist’) remains immortal. Period.

US media gets it wrong

The American media resurrected Jannati’s past statements on the United States to interpret that Iranian foreign policies will remain in hostile mode. By that logic, almost all leading figures in Iran’s politics today – including Rouhani – have made vitriolic statements about the Great Satan at one time or another – and, indeed, their American counterparts have not been far behind, either.

The context becomes important. The newly-elected Assembly of Experts may well find itself choosing Iran’s next Supreme Leader. Its all-consuming focus is going to be on that historic task.

Succinctly put, if anyone in the US was laboring under the impression that the nuclear deal signed last July would inevitably unravel Iran’s Islamic system, it was a myopic vision.

Equally, Larijani, who is cast as a “moderate conservative,” is a politician with vast experience in statecraft, and the Majlis is at a crossroads.

The expectations of the people are running high, as evident from the surge of new faces as MPs. The high inflation rate and unemployment levels pose big challenges. The Iranian economy is struggling to break out of stagnation. The Majlis is the forum where these momentous turf battles will be fought over the orientation of economic policies.

Both Supreme Leader Ali Khamenei and President Hassan Rouhani have urged the new Majlis to continue to work for the so-called “resistance economy.” What does that mean?

Quintessentially, it is about Iran integrating into the global economy without endangering the principles and ideals of the 1979 revolution.

There has been all along schism within the Iranian elites as to the alchemy of a free market economy “with Iranian characteristics.”

Iran's Supreme Leader Ayatollah Ali Khamenei poses before delivering a speech marking Nowruz, the Iranian New Year, in this handout photo released by the Iranian Supreme Leader website on March 20, 2016. leader.ir/Handout via REUTERS/File Photo
Iran’s Supreme Leader Ayatollah Ali Khamenei poses before delivering a speech marking Nowruz, the Iranian New Year, in this handout photo released by the Iranian Supreme Leader website on March 20, 2016./Handout via REUTERS/File Photo

One school preferred autarchy, fearing that entanglement with global community might erode Iran’s strategic autonomy, while a second school of thought saw that rapid economic growth is needed to create jobs so as to contain the rising social discontent, which in turn demanded integration with the international economic system.

Unsurprisingly, there are subtle shades in between – such as, for example, Hashemi Rafsanjani who has long admired the “China model” as a pragmatic combination, which favored globalization and high growth, but as a means to ensure the legitimacy of the communist party and the political system.

Larijani is centrist

In Larijani, the lawmakers have found an experienced centrist figure with a cosmopolitan outlook, albeit a “principalist,” who is badly needed as speaker to mediate the complicated processes that lie ahead, even as the “reformist” government charters the course of the “resistance economy.”

Larijani duly acknowledged the task ahead, saying, “The country is facing serious economic challenges which can be dealt with via convergence and use of scientific approach.”

He understands perfectly well that the choices Iran makes would have profound implications for the country’s foreign policies:

  • We are not a separate island in the international arena, and as underscored by the Supreme Leader, we will keep relations with all countries, which entails accurate diplomacy.

It’s an extraordinary statement to invoke the Supreme Leader to argue the need of a diversified, pragmatic foreign policy.

In the above scenario, what is it that the US can do for Iran?

The smart thing will be to encourage Iran’s integration into the world market. Khamenei’s criticism is valid:

  • The Americans have said that they would lift sanctions and they have actually done so on paper, but through other ways and methods, they are acting in a way that the result of sanctions repeal will not be witnessed at all.

The Indian officials who accompanied Prime Minister Narendra Modi to Tehran a week ago heard from the Iranian side that the removal of the sanctions has not led to the expected rethink in the negative attitude of western banks apropos doing business with Iran.

On the other hand, foreign investments and increased oil exports will increase the growth rate of the Iranian economy, generate more income, create more jobs and eventually erode the influence of the interest groups (such as the fatcats known as buniyads or religious foundations, for example) that have exploited the closed economic conditions under the sanctions.

Neither Washington nor Tehran ever made unilateral demands on the other’s foreign policies. Both accepted that changes cannot happen so long as the trust deficit remained.

The way to move forward is by addressing the trust deficit, and the right thing to do is that Iran is enabled to get the dividends out of the removal of sanctions now that it has fulfilled its obligations under the nuclear deal.

Ambassador MK Bhadrakumar served as a career diplomat in the Indian Foreign Service for over 29 years, with postings including India’s ambassador to Uzbekistan (1995-1998) and to Turkey (1998-2001). He writes the “Indian Punchline” blog and has written regularly for Asia Times since 2001.

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M.K. Bhadrakumar
MK Bhadrakumar served as a career diplomat in the Indian Foreign Service for over 29 years, with postings including India’s ambassador to Uzbekistan (1995-1998) and to Turkey (1998-2001). He writes the “Indian Punchline” blog and has written regularly for the Asia Times since 2001.
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