Analysis: Iran’s conservatives wary of nuclear deal

During a public rally on June 15, President Hassan Rouhani pledged that a “good” agreement would be reached with the P5+1 nations – the US, UK, France, Russia, China and Germany – with which Iran is negotiating.

On Tuesday, after an 18-day marathon negotiations, world powers and Iran clinched a historic nuclear deal that will curb Iran’s nuclear programme in exchange for sanctions relief.

Yet Rouhani’s notion of what is “good” is not shared by his political opponents, many of whom openly decry the idea of engaging in talks with the US. 

Even though negotiators have reached an agreement, Iran’s nuclear programme will likely remain a point of contention among the international community.

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Such an agreement could ratchet up the geo-political tensions in the Middle East, and start a domestic tug-of-war in Iran among opposing political and religious groups. Some also fear that a more powerful Iran, were it to be unfettered by economic sanctions, could become more deeply involved in foreign conflicts in the region.

From the point of view of conservative groups in Iran, and like-minded members of the Islamic Consultative Assembly, the country’s parliament, a nuclear agreement, according to Ali Larjani, the parliament speaker, would not be a “historic achievement for Iran”.

Rather, they [the conservatives] see the talks as a political Achilles’ heel, allowing foreign countries to impose stringent terms on its nuclear programme.

Meanwhile, Iranian moderates, headed by President Rouhani, face intense pressure from the Assembly’s National Security and Foreign Relations Committee, which has enacted a law designed to halt unwanted progress in the talks.It would tie the president’s hands in negotiations by setting certain parameters – for instance with regards to the military – for any future deal with Western nations.

The law, passed with 213 out of 244 members present who voted in favour, came into effect after being approved by the Guardian Council in June.

However, Rouhani’s troubles don’t just lie with lawmakers. Iranian media outlets, especially those close to Rouhani’s conservative opponents, have intensified their criticism of the president’s performance, highlighting a recent poll that showed his popularity was down by 10 percent since last year.

The slide in Rouhani’s popularity is not necessarily connected to his handling of the nuclear talks with the West, but could also be attributed to a failure to follow up on election campaign promises that included increasing civil liberties and bringing about reforms.

Rouhani, for example, has failed to end the house arrest of former pro-reform leaders like Mir-Hossein Mousavi and Mehdi Karroubi.

The health of the Iranian economy is another vulnerability for the president.

Although Rouhani has been able to cut the inflation rate to 15.6 percent from 40 percent, according to the latest report from the Iranian Central Bank, he has failed to revive the Iranian economy, which is the 14th largest economy in the region – whereas it was the fourth-largest in 2005.

The country’s critical oil sector has been hard hit due to the punishing sanctions and their restrictions on foreign investments.

Rouhani is counting on negotiations to remove crippling sanctions and free the Iranian economy in time for elections in February. But many Iranian experts argue that international sanctions against Iran are responsible for only 20 percent of the country’s economic woes.

They also expect that, once sanctions are removed, Iran’s economy will only grow between three to seven percent – not enough to reduce the unemployment rate, which the Statistical Centre of Iran estimated at 10.3 percent but that other sources say is closer to 20 percent.

The Iranian economy is also hindered by a set of laws that prohibit any meaningful foreign investment in the country. Over 16 years and three presidents, the country’s leadership has failed to loosen legal obstacles to foreign investment in Iran.

The case of the Turkish telecommunications company Turkcell is a prime example. After Iran’s Islamic Revolutionary Guards Corps (IRGC) erected legal obstacles to the company’s operations in the country, claiming that it presented a foreign threat to national security, in 2005 Turkcell was forced to leave the market.

But despite pessimistic predictions from some experts, removing sanctions will bring deep structural change to the Iranian economy, especially in terms of foreign investments, property rights and market competitiveness.

The Iranian government has around $100bn of proceeds from oil sales that are frozen in foreign banks, $30-50bn of which could be released to its treasury in the event of sanctions being lifted.

This would give the Iranian economy an immediate, clear boost. The lifting of sanctions would be a boon to the Iranian treasury, allowing Rouhani to implement many of his economic programmes and repair Iran’s infrastructure.

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According to a recent poll published in the Iranian press, 90 percent of Iranians do not trust the US government in negotiations with their country, though they still support the idea of negotiations in general.

Yet despite the potential economic gains and public support, Iranian Supreme Leader Ayatollah Ali Khamenei and many conservatives see the nuclear talks as ‘an American plan’ to influence domestic politics and manage its nuclear programme. 

They fear that support for the talks will build among the liberal and westernised segments of Iranian society, consequently putting pressure on the government and raising the cost of losing a deal.

But if an agreement was truly crafted with US interference in Iranian domestic politics in mind, it would be unlikely to see such plans materialise.

Rouhani would not engage in “constructive cooperation” with the US, as he would hope to implement his own intended social and political reforms. 

Instead, he might settle with what we could call “selective and conditional cooperation”, which, at the end of the day, is the preferred policy of the supreme leader and the IRGC.