Is Iran Ready for Re-Entry into the Global Community?

BY STEWART KATO

On May 19th, 2017, Iran held its twelfth presidential elections in which its people expressed readiness for economic and social reform as well as interest in rejoining the international community. The international community was quick to identify the election as a gauge of the popularity of the recent 2015 nuclear accord, but for many Iranians the election was more about promises of improved civil rights and increased economic development.[1] Iran is experiencing significant economic growth stimulated by increased international oil exports following the negotiated removal of international sanctions while the Iranian people cling to the promises of moderate Iranian leaders for increased social freedoms.[2] Sustainable economic development, and thus support for moderate leaders who endorse economically opening Iran to the world, hinges on increased international investment; an opportunity that the United States and the West have yet to seize upon and risk missing.  The re-election of a moderate Iranian leader presents an opportunity for the international community, and especially the United States, to coax Iran away from isolationism by supporting the economic growth and development of Iran.

Two issues were at the forefront of the Iranian presidential election. Promised economic growth and social reform dominated discourse however, all candidates disagreed on how to stimulate the economy.[3] President Hassan Rouhani, the moderate-leaning candidate who won in a landslide in 2013, promised the end of Iran’s diplomatic isolation and faced challenges from multiple conservative candidates, including former president Mahmoud Ahmadinejad.[4] In the end, it was Shi’ite cleric Ebrahim Raisi, supported by Supreme Leader Ayatollah Ali Khamenei, who became Rouhani’s main rival in the election.[5] Rouhani was praised for taming inflation and especially for signing the nuclear deal with international powers in which Iran agreed to curb its nuclear projects in exchange for easing economic sanctions and possible international business. Rouhani’s supporters hope that international business will strengthen the Iranian economy including increased oil exports.[6] While Raisi did not condemn the nuclear accord, his supporters highlighted that Rouhani’s hopes for international investment and the promised resulting economic surge have yet to manifest. Conversely, Khamenei and Raisi both supported greater emphasis on a “resistance economy” independent of the international community.[7] Rouhani thus began to symbolize a continuation of an outwardly looking Iran compared to Raisi advocating a return to isolationism.

Social reform was also a significant topic in the election as Iran has experienced accelerated urbanization in the past years with a corresponding increase of the middle class.[8] Rouhani restated assurances he made in 2013 to increase social and political freedoms as well as warning that the election of hardline conservatives would witness a return of extremism and authoritarianism into the lives of ordinary Iranians. However, critics quickly pointed out that Rouhani himself has made little progress on his previously promised social reforms.[9] Nevertheless, many younger Iranian voters expressed support for Rouhani since they perceived him as the preferable candidate to enjoy more freedoms and a relaxation of strict rules, unlike conservative candidates like Raisi. As 19 year old Muhammad Badijan stated, it was the chance to “live a normal life.”[10] Analysts like BBC’s Kasra Naji pointed out that the re-election of Rouhani may have been less a belief in Rouhani’s promised social reform than a chance for Iranians to avenge years of repression by conservative Iranian leaders.[11] “This was revenge of the people against the hardliners who intimidated them, jailed them, executed them, drove them to exile, pushed them out of their jobs, and discriminated against women.”[12] The presidential election was a chance for Iran’s growing urban population to show conservatives that they will no longer be intimidated or oppressed and will support candidates who promise change and freedoms. Rouhani is now faced with a nation with high hopes for reform and growth, but he will have to address high unemployment, the lack of foreign investment, and continued demands for social reforms.[13] The president promised a moderate and outward looking approach to global relations and economic partnerships while attacking conservative dominated state services for their domineering actions, and will now have the chance to continue his policies.

President Rouhani’s outward looking policies led Iran to steadily increase efforts to improve ties with the international community, and Russia was one of the first major nations to begin building ties with Iran and re-welcome it. In March, Rouhani was slated to meet with Russian President Vladimir Putin in Moscow to discuss projects regarding energy, infrastructure, and technology as well as their alliance in the Syria; cooperation unprecedented before the Syrian Civil War threatened their mutual ally, President Bashar al-Assad.[14] Iran recently signed a joint venture contract with the Russian company CJSC Transmashholding, the largest manufacturer of locomotives and rail equipment in Russia, to manufacture 500 wagons in Iran. This is a move that Iranians hope will attract future international investments and help update their technological and domestic production abilities.[15] Iran and Russia also continue to work together in Syria by negotiating the creation of “safe-zones” with Turkey, though opposition parties and the US State Department spokeswoman Heather Nauert expressed concern over Iran as a guarantor of peace.[16] When Iran first signaled its readiness to partner with other nations, Russia was quick to show enthusiasm and excitement to collaborate together on projects. This began with joint economic ventures and increased trade, but has resulted in Russia gaining access to Iranian markets and investment opportunities as well as Russian influence in Iranian foreign policies as the two build a partnership based on mutual goals in Syria and the Middle East. Russia’s readiness to portray itself to Iran as a supporter of the Iranian economy and efforts to re-establish itself as a part of the international community easily attracted Iranian leaders and its people to support friendship with Russia.

The European Union also responded positively to Iranian attempts to solicit foreign investment and relationships, but European leaders are forced to proceed cautiously as the United States has yet to define its policies toward Iran. Unlike U.S. President Donald Trump, who continues to talk tough on Iran, EU leaders like Europe’s energy commissioner, Miguel Arias-Canete, echoed Europe’s full commitment to the 2015 nuclear deal and gathered 50 European firms in a business forum in Tehran and met with Iran’s atomic chief Ali Akbar Salehi.[17] Iran similarly signed deals with European companies such as Siemens of Germany to help Iran modernize its energy technology as the two sides have high hopes for the development of future partnerships that will take full advantage of economic, social, and diplomatic opportunities.[18] Unlike their Russian counterparts, most European business leaders are still in the preparation and negotiating phases of working out deals with Iran, but the excitement and desire is plainly there in both European and Iranian minds. Both sides see the advantages of building economic ties as a step to building friendship, but many companies must proceed cautiously as the United States has yet to define their economic policies toward Iran and Western companies fear that if President Trump decides to increase sanctions against Iran, their investments will be for nothing.  The West’s hesitation to invest in Iran after the 2015 nuclear deal and the obvious lack of significant economic growth there already leaves some Iranians questioning Rouhani’s policies of increasing involvement in the international community and disillusioned with partnering with other nations.[19] Iranian hardliners continue to state that Rouhani’s policies of opening Iran up to foreign investment will result in Iran being economically dependent on the world and open to negative Western cultural influence. Until Rouhani’s policies produce tangible economic benefits for more Iranians, hardliners will continue to have an audience for their criticisms of economically opening Iran to the world.

President Trump and his administration are at the forefront of why the West has been slow to invest in the Iranian economy. His increasingly hostile rhetoric towards Iran and the 2015 nuclear deal weaken confidence in both the West and Iran for the improvement of economic and diplomatic relations. President Trump remarked that the 2015 nuclear deal is the “worst deal ever” and his administration plans to review US policies towards Iran, including the nuclear deal. Secretary of State Rex Tillerson stated that the US “will evaluate whether suspension of sanctions related to Iran…is vital to the national security interest of the United States” and that Iran “remains a leading state sponsor of terror.”[20] In the meantime, President Trump has made obvious efforts to solidify friendships with Iran’s regional rivals Saudi Arabia and Israel, including personal visits to both and plans for increased economic partnerships. He has also made negative statements against Iran.[21] The US government, however, has not shown plans of backing out of the nuclear deals as the US Treasury allowed more widespread sanctions against Iran to expire, while issuing fresh sanctions against specific officials and businesses linked to Iran’s missile program, which in theory would allow US citizens and entities to deal with Iranian companies not involved with the missile program.[22] President Trump seems very ready to be harsh on Iran as his confrontational rhetoric portrays him as a tough world leader and a friend to important Middle Eastern nations that rival Iran, specifically Saudi Arabia and Israel, but his actions are aggravating the Islamic Republic.[23] President Trump’s actions and statements do little to convince Iran of a possible partnership with the United States and President Rouhani countered Trump’s statements stating that Iran “is waiting for the new US administration to find stability and continuity in its policies” and that “the Iranian nation has decided to be powerful…. Whenever we need to technically test a missile, we will do so and will not wait for their permission.”[24]

US-Iran relations have remained strained ever since the United States aided in the 1953 coup d’état that ousted the democratically elected prime minister of Iran and replaced him with a dictator, itself leading to the 1979 Iranian revolution that led to the rise of hardliner anti-American sentiment. However, regional stability demands cooperation.[25] The US and Iran are both involved in Iraq as they support the Iraqi government in their fight against IS extremists and the recent IS terrorist attack in Tehran highlights that terrorism truly is a global issue.[26] While Iran and the US are backing opposing sides in the civil wars in Syria and Yemen, President Rouhani has stated that regional stability cannot be restored without Iran and that he is open to cooperation with the US as “the problem is that the Americans do not know our region and those who advise US officials are misleading them” suggesting that Iran is ready to better advise the United States.[27] Iran is a powerful nation in the Middle East with the resources and prestige to assist in stabilizing a region in which the US and its allies have struggled to establish some sense of order for years. The growth of terrorist groups in conjunction with the destabilization of multiple Middle Eastern governments including Syria, Iraq, and Afghanization leaves ample opportunity for international cooperation with Iran, like Russian usage of Iranian airfields.[28]  While Iranian missile and nuclear ambitions remain a stumbling block in possible negotiations between Iran and the world, Iranian leaders and its citizens have shown that they are ready to start a dialogue.

The re-election of moderate President Rouhani should represent to the global community that the Iranian public, if not its leaders as well, want to rejoin the global economy and community. The Iranian economy has vast investment opportunities and untapped markets for international businesses; prospects Russian and European companies have slowly begun to capitalize. Iran’s support of specific radical groups, its continued human rights issues and its nuclear ambitions are foreseeable points of friction however, the recent presidential elections demonstrate the Iranian people no longer support radical conservatives or isolationism and are ready to support leaders interested in fostering improved international relations. If the global community, especially the United States, wants to encourage Iran to rejoin the international community and end its time as a “rogue state”, they should at least entertain the idea of emulating its Russian and European counterparts.

If the United States wishes any hope of redefining its relationship with Iran or gaining any influence in Iranian policies, their best chance is to give international businesses clearance to conduct commerce with Iran. A practice of slowly coaxing Iran away from its nuclear or radical policies by gradually permitting an increasing number of businesses into Iran would be better than leaving Iran, international businesses, and other countries in the dark of American intentions. By being unclear of its future policies, the United States has let Russia get first claim on being the sponsor of Iran’s re-entry into the global economy as Russia quickly expanded diplomatic and economic ties with Iran. A failure to even try to partner and negotiate with a moderate-led Iran could easily have the consequences of the United States being completely excluded from a Russian dominated market or worse, the disillusionment of the Iranian people that they should even try to cooperate with the West. It is better to at least show Iranians that their attempts to partner with the world will not be overlooked or ignored. The Iranian people have signaled that they are ready to partner with the world, and while the West should never drop their standards regarding civil rights or nuclear responsibility, the United States needs to at least show Iranians that their hopes of re-entering the global community are well grounded and will be rewarded.

References

[1] Felicia Schwartz, “Iran Nuclear Accord- At a Glance,” The Wall Street Journal, April 2, 2015, https://blogs.wsj.com/briefly/2015/04/02/iran-nuclear-accord-at-a-glance/

[2] “Iran GDP Growth 12.5%,” Financial Tribune, June 19, 2017,  https://financialtribune.com/articles/domestic-economy/66731/iran-gdp-growth-125

[3] Amir Paivar, “Iran Election: Economy Emerges as Critical Factor,” BBC, May 5, 2017, http://www.bbc.com/news/world-middle-east-39821565

[4] “Iran Election: President Rouhani Registers to Run Again,” BBC, April 15, 2017, http://www.bbc.com/news/world-middle-east-39601847

[5] Bozorgmehr Sharafedin, “Hardline Cleric Raisi to Take on Rouhani in Iran’s Presidential Election,” Reuters, April 9, 2017, http://www.reuters.com/article/us-iran-elections-raisi-idUSKBN17B0DZ

[6] “Rouhani vs. Raisi: What’s at Stake in Iran’s Presidential Election?” The National, May 16, 2017, http://www.thenational.ae/world/middle-east/rouhani-vs-raisi-whats-at-stake-in-irans-presidential-election

[7] “Rouhani vs. Raisi: What’s at Stake”

[8] Thomas Erdbrink, “In Iran, Heavy Voter Turnout Seen as a Plus for President Rouhani,” The New York Times, May 19,2017, https://www.nytimes.com/2017/05/19/world/middleeast/iran-election-president-hassan-rouhani.html?_r=0

[9] Bozorgmehr Sharafedin & Robin Pomeroy, “Rouhani Warns Voters to Prevent ‘Extremism’ Returning to Iran,” Reuters, April 29, 2017, http://www.reuters.com/article/us-iran-election-rouhani-security-idUSKBN17V0Q2

[10] “In Iran, Heavy Voter Turnout Seen as Plus”

[11] “Iran Election: Hassan Rouhani Wins Second Term as President,” BBC, May 20, 2017, http://www.bbc.com/news/world-middle-east-39984066

[12] “Iran Election: Hassan Rouhani Wins Second Term”

[13] “Iran Election: Hassan Rouhani Wins Second Term”

[14] Erin Cunningham, “Rouhani to Visit Putin in Moscow as Iran and Russia Move Closer,” The Washington Post, March 26, 2017, https://www.washingtonpost.com/world/middle_east/rouhani-to-visit-putin-in-moscow-as-iran-and-russia-move-closer/2017/03/25/629713a8-101f-11e7-aa57-2ca1b05c41b8_story.html?utm_term=.d8b8287a706d

[15] “Iran, Russia Sign Contract to Manufacture 500 Wagons,” Financial Tribune, April 29, 2017, https://financialtribune.com/articles/economy-business-and-markets/63262/iran-russia-sign-contract-to-manufacture-500-wagons

[16] The Associated Press, “Russia, Iran, Turkey Sign on ‘de-escalation zones’ in Syria,” ABC News, May 4, 2017, http://abcnews.go.com/amp/International/wireStory/russia-iran-turkey-sign-de-escalation-zones-syria-47200497

[17] Alissa de Carbonnel, “Wary of Trump, EU Courts Iran to Boost Moderates Before Polls,” Reuters, April 30, 2017, http://www.reuters.com/article/us-iran-eu-usa-idUSKBN17V0SR

[18] “EU Seeks Closer Energy Ties with Iran,” Financial Tribune, April 30,2017, https://financialtribune.com/articles/energy/63345/eu-seeks-closer-energy-ties-with-iran

[19] Cameron Glenn, “A Year on, Iran’s Nuclear Deal is Helping its Economy, but Not as Much as Some Hoped,” Quartz, July 13, 2016, https://qz.com/729036/a-year-on-irans-nuclear-deal-is-helping-its-economy-but-not-as-much-as-some-hoped/

[20] “Trump Orders Iran Nuclear Deal Review Despite Compliance,” BBC, April 19, 2017, http://www.bbc.com/news/world-us-canada-39642272

[21] Prince Faisal bin Farhan Al-Saud, “Resetting U.S.-Saudi Relations,” The Washington Times, March 26, 2017, http://www.washingtontimes.com/news/2017/mar/26/us-relations-with-saudi-arabia-need-resetting/?utm_medium=RSS&utm_source=RSS_Feed & “Trump Tells Israel Iran will Never have Nuclear Weapons,” BBC, May 22, 2017, http://www.bbc.com/news/world-middle-east-39973197

[22] “Iran Nuclear: Trump Extends Obama’s ‘Worst Deal Ever’,” BBC, May 17, 2017, http://www.bbc.com/news/world-us-canada-39950827

[23] Jonathan Marcus, “Why has Trump Been so Harsh on Iran,” BBC, May 22, 2017, http://www.bbc.com/news/world-us-canada-40006734

[24] “Rouhani Dismisses Trump Warning over Iran ‘threat’,” BBC, May 22, 2017, http://www.bbc.com/news/world-middle-east-39999051

[25] Malcom Byrne, “It’s Time to Release the Real History of the 1953 Iran Coup,” Politico, October 12, 2016, http://www.politico.com/magazine/story/2016/10/its-time-to-release-the-real-history-of-the-1953-iran-coup-214353

[26] “Why has Trump Been so Harsh on Iran” & “Iran Attacks: ‘IS’ Hits Parliament and Khomeini Mausoleum,” BBC, June 7, 2017, http://www.bbc.com/news/world-middle-east-40184641

[27] “Rouhani Dismisses Trump Warning over Iran ‘Threat’”

[28] “Russia Used Iranian Airfield for Syrian Operation at Tehran’s Invitation – Official,” RT, August 24, 2016, https://www.rt.com/news/356888-russia-iran-airfield-syria/

Image source: abcnews.com

About the Author 

Stewart Kato holds a B.A. in History with a focus on 20th century Europe and East Asia from UC Berkeley. His research focuses on how international politics, economics, and history affect foreign relations.

DISCLAIMER: The views and opinions expressed in the article are solely those of the author(s) and do not necessarily reflect the official policy or position of the ERA Institute.

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