The 60-year-old hardline Raisi replaces moderate Hassan Rouhani, who championed the Joint Comprehensive Plan of Action (JCPOA), Iran’s 2015 nuclear deal with world powers that took a big hit after the United States unilaterally abandoned it in 2018 and went on to impose harsh sanctions.
Rouhani repeatedly claimed that his hardline rivals in Tehran did not allow six rounds of talks in Vienna aimed at restoring the accord to lead to an agreement before the end of his second and final tenure.
Raisi, a potential candidate for succeeding Supreme Leader Ali Hosseini Khamenei, who formally endorsed him as president on Tuesday, has said he will honour the JCPOA as state policy. But he has also pledged to form a “strong” government that would be able to reach an agreement favourable to Iran in the negotiations in the Austrian capital.
Signals sent by Iran and the US suggest restoring the JCPOA will be tricky.
Iran has said the US has made an agreement on its restoration – and on lifting a “terrorist group” designation on the Islamic Revolutionary Guard Corps (IRGC) – contingent on including a line guaranteeing future talks on Iran’s regional influence and missiles programme, issues Tehran has said are out of the question.
Moreover, Iran has said the US continues to refuse to guarantee it will not leave the JPCOA again; rejects an Iranian demand to allow for a period to “verify” sanctions have been lifted; and will not negotiate on paying compensation for billions of damages incurred since 2018.
Meanwhile, the top US negotiator Robert Malley said last week there is a risk Iran may come back to Vienna “with unrealistic demands about what they can achieve in these talks”, suggesting the US considers some major Iranian demands maximalist and unattainable. It came as US Secretary of State Antony Blinken said the negotiating process “cannot go on indefinitely”.
Amid increasing distrust of the West, Raisi has said he wishes to prioritise improving relations with regional neighbours, as well as China and Russia, something he expects will also strengthen Iran’s ailing economy.
Dozens of high-level foreign dignitaries, including several heads of state, are expected to be in Tehran on Thursday for his swearing-in before parliament. Observers will be closely watching who will attend as a potential indication of Raisi’s priorities for developing ties across the region and beyond.
The new president, who enjoys close ties with the IRGC, is certain to continue government support for the “axis of resistance” – a regional alliance to oppose NATO, Israeli and Saudi Arabian activities in the Middle East.
Israel and several Arab nations continue to oppose the JCPOA. But in face of US troops leaving the region, Iran and Saudi Arabia have been negotiating behind closed doors for months to see if they can improve ties that have been marred since 2016 when protesters attacked the Saudi embassy in Tehran following the execution of a renowned Shia leader.
Tensions between Iran and Israel, however, continue to escalate.
On Sunday, Israel – alongside the US and the United Kingdom – accused Iran of carrying out a drone attack on an Israeli-managed ship off the coast of Oman that killed two crew members – a British and a Romanian national. Tehran rejected having a hand in the incident.
Earlier this week, Western media quoted unnamed sources as saying Iran was responsible for hijacking a ship off the coast of the United Arab Emirates, while several other ships encountered technical issues.
Iran immediately said it had no role in the incidents, accusing Israel and the West of trying to frame it to ratchet up tensions in the region.
Observers say Raisi will also be looking to increase Iran’s reach in neighbouring Iraq, where US combat troops are expected to leave by the end of the year.
The new president, meanwhile, will also have a sensitive job in managing ties with next-door Afghanistan, where the Taliban has made major territorial advances and captured border crossings, including with Iran, in recent weeks as US-led forces complete their withdrawal from the country.
Challenges at home
At home, Raisi will also be facing a difficult task as the ailing economy, social grievances and the deadliest COVID-19 pandemic of the Middle East demand urgent action.
Raisi has been a critic of his predecessor’s handling of the crises and focused his presidential campaign on the fight against the longstanding issues of “corruption and inefficiency”.
The US sanctions imposed after it abandoned the JCPOA only compounded the plethora of structural issues that Iranian governments have been dealing with after decades of mismanagement.
The punishing measures triggered a massive currency devaluation that took inflation from single-digit territory to currently above 40 percent, and exacerbated high unemployment and large budget deficits.
Furthermore, they hit all productive sectors of the economy and cut off the government’s access to tens of billions of dollars of currency reserves abroad.
Former US President Donald Trump’s “maximum pressure” campaign against the Iranian economy is effectively still being implemented by his successor, Joe Biden, continuing during the pandemic that has killed more than 91,000 Iranians – something, Iran says, has also affected its ability to import vaccines against COVID-19.
Even as the country’s vaccination drive has accelerated in the past two weeks, Raisi takes office at a time when a fifth major wave of infections is nearing its peak.
This is while Iran has been rocked by several public protests over deteriorating standards of living during the past few years.
The latest came in July, when thousands took to the streets in several cities across the southwestern province of Khuzestan to protest against water shortages. Limited protests also spread to several other provinces.
The water shortages in Khuzestan present only a fraction of environmental issues Iran could face in the future in the face of a warming climate, droughts and wildfires.
The country during the Iranian summer also saw its worst power blackouts in recent memory. Due to old infrastructure and inefficient distribution networks, power outages have been common in recent years, but the scope of this year’s blackouts took officials by surprise and frustrated citizens.
Another issue facing Raisi will be the management of the country’s cyberspace, with many fearing his administration will further restrict internet access.
A bill is currently under review in the hardline parliament that experts, government officials and major businesses say that if passed, could lead to blocking more foreign platforms, criminalising the use of virtual private networks and passing control of internet bandwidth to armed forces.
Raisi himself has previously voiced support for a “layered” internet access model based on different criteria, including profession.