The heightened interest in cryptocurrencies across the Gulf is taking place alongside global efforts to both regulate digital assets and attract cryptocurrency firms.
The former Islamic Republic of Iran’s president, Ayatollah Ali Akbar Hashemi Rafsanjani, died on January 8 in Tehran. His death will likely affect the domestic affairs and foreign policy of Iran ahead of the upcoming presidential election in May. Rafsanjani was the “balancer” of the Islamic Republic. He was one of the most important pillars of the Iranian political system and his death could disturb its internal equilibrium.
The Islamic Republic has a peculiar hybrid political system comprising conservatives, pragmatists, and reformers. It could be misleading to attribute to these terms the same connotation as those referring to Western democracies: Many political labels have a different meaning in Iran. For instance, there is no correspondence between reformers and those who are usually defined as progressives within authoritarian regimes or between conservatives and hard liners. In Iran these concepts have a quite specific meaning, unique to the country. For example, the conservatives have strict respect for Islamic law and anti-Western policies, and support state intervention in the economy. The pragmatists have a more moderate approach toward the application of Islamic law in society, more flexibility toward the West, and are more open to privatization within the economy. The reformers are critical of the West and pro-state intervention in the economy, like the conservatives, but, like the pragmatists, have a moderate approach toward the application of Islamic law in society. Despite their differences, they can all be considered pro-system groups and do not question the institutional framework of the Islamic Republic or the role of Shia Islam as the only guiding principle of state laws and moral conduct.
Rafsanjani became one of Iran’s most powerful clergymen in the 1980s by acquiring the full trust of the supreme leader, Ayatollah Ruhollah Khomeini, following the Iranian Revolution. He was a key figure in marginalizing and repressing the Islamic Republic’s opposition forces in the 1980s and 90s. Furthermore, Rafsanjani served as one of Khomeini’s representatives in the army during the Iran-Iraq War, playing a significant role.
Rafsanjani managed to guarantee a stable and peaceful transition of power after Khomeini’s death by supporting the candidacy of Ayatollah Ali Khamenei to become the supreme leader. He continued to exercise his influence until his death serving as Iran’s president, president of the Assembly of Experts, chairman of the Expediency of Discernment Council, and in other institutional positions. The Assembly of Experts, for example, has the important function of nominating the new supreme leader in case of his death, while the Expediency of Discernment Council serves as a mediator between the Parliament and the Council of Guardians in case of some divergence. Moreover, the council advises the supreme leader on issues of national interest.
In the mid-2000s Rafsanjani started to lose some of his power and influence. He began to shift his support for the conservative front of the supreme leader and Islamic Revolutionary Guard Corps (IRGC) toward the opposition pragmatist and reformist factions. Rafsanjani’s loss in influence to the conservative front was apparent first in his defeat to Mahmoud Ahmadinejad in the 2005 presidential election and then during the 2009 election – Rafsanjani supported the reformist Mir Hossein Mousavi who ran in opposition to Ahmadinejad, backed by Khamenei, in his bid for re-election. After 2009, Rafsanjani became the main supporter of the pragmatist and reformist fronts. He regained his political influence in Iran through his support for Hassan Rouhani, as Rouhani ran for president in 2013.
Even though marginalized by the conservative fronts, Rafsanjani still maintained an important network within the political and economic spheres of Iran. Moreover, he managed to create influence among the reformers and pragmatists abroad who had left the country. Many of these intellectuals, journalists, academics, and politicians were loyal to Rafsanjani and supported Rouhani’s candidacy in 2013. Moreover, Rafsanjani maintained important business influence and wealth, which assured him a degree of power on the Iranian political chessboard. As Rafsanjani supported the Rouhani government, he also was close to many important ministers, such as Foreign Minister Mohammad Javad Zarif.
Even though there were several ups and downs during his political career, Rafsanjani was one of Iran’s most influential and powerful politicians over the last four decades. For this reason, his death will have an effect both on the domestic balance of power in Iran and on foreign policy. On the domestic level, the main effect of Rafsanjani’s death will be the weakening of the pragmatist and reformist fronts, represented in the current government by Rouhani and Zarif. Both pragmatists and reformers recognized in Rafsanjani a kind of charismatic leadership in the last decade. At the moment, it will be very difficult to find another leader able to fill his role. Rafsanjani had influence among several of the Islamic Republic’s political fronts and had the potential to challenge again in the near future the conservatives, in the event of the supreme leader’s death and the need to find a successor. Moreover, on the foreign policy level, Rafsanjani had a consolidated international network. For example, he had good relations with Saudi Arabia and, through his influence abroad, was able to support Rouhani’s efforts to consolidate relations with Western countries. The loss of Rafsanjani’s influence, therefore, will likely contribute to the weakening of the reformers and pragmatists. Conversely, the conservative fronts, supported by Khamenei and the IRGC, will gain power and have more political space to stabilize their political hegemony over Iran.
Over the next four to eight years, Iran’s hard liners, particularly the factions affiliated with the IRGC, will dominate the Islamic Republic. The results of the upcoming presidential election could be one indicator as to whether there will be an immediate hegemony of hard liners or if it will be more gradual. There are two likely scenarios: Rouhani will run in and win the election, but his government will be weaker than in his first term, or Rouhani will not run or will lose the election and the conservative front will claim executive power.
In the first scenario, Rouhani’s government would be weaker and would not be able to implement its main domestic and foreign policy objectives. It is probable that Iran’s Parliament would not approve a second term for Zarif as foreign minister as many conservatives are critical of his role in the nuclear deal, accusing him of being too soft toward the Western powers in the negotiation. Rouhani could govern for another four years, but without the power he had in his first term. In the meantime, the hard liners would prepare their hegemonic takeover of the presidency in the 2021 elections. This scenario would become more likely if Iran perceives an immediate military threat ahead of the May election, coming for example from the new U.S. administration or one of the Gulf Cooperation Council countries such as Saudi Arabia, or if the Islamic Republic comes under some significant and immediate economic sanctions.
The second scenario would accelerate a power shift within the Islamic Republic with a conservative figure winning the presidency in 2017. In this case, there could be an immediate shock within Iran’s political system, as the incumbent president has in the past always won a second term. This scenario would be more likely if the Islamic Republic perceived a threat not just from the United States, but also from its current ally, Russia. If Tehran worries Moscow might abandon Tehran in favor of Washington, there could be an immediate shift to the conservative front. Another contributing factor could be the health of the supreme leader. If it appears Khamenei might die over the next few months, the IRGC could quickly gain more power.
However, in both scenarios, the conservatives could gain hegemony over the Islamic Republic in the next four to eight years. Up to this point, the Islamic Republic guaranteed a kind of turnover within its own political elite and factions. After Rafsanjani’s death, such balance of power is seriously at risk of being undermined. His passing provokes a possible structural weakening on the reformist and pragmatist parts and it might open space for the conservatives to take control. It will paradoxically create a polarization in the Iranian political system, potentially completely marginalizing the reformers and pragmatists.
The consequences of this shift within the Islamic Republic, in combination with some changes at the global level such as the election of President Donald J. Trump in the United States, will also influence the foreign policy of Iran in the next four to eight years. First, the opening of Rouhani’s government toward the West during the last four years will be halted and the Islamic Republic, at least in the short term, could reinvigorate its anti-Western and anti-Israel orientation. The economic opening of Tehran toward the West might suffer a backlash. Such backlash might be limited if Rouhani is re-elected. Second, Tehran will reinforce its strategic alliances both with China and Russia. The economic ties with Beijing would likely grow and the security and military alliances with Russia could be reinforced. But if Russia abandons Iran in order to build a new alliance with the United States, there could be a total alliance of Iran with China. Third, Iran would increase its support for Shia factions in the region and the proxy war against Saudi Arabia might intensify. Fourth, the politics of the Islamic Republic in the Gulf region could become more security oriented and tensions with the GCC states, particularly Saudi Arabia, could escalate.
With the death of Rafsanjani, the foreign policy of Iran might suffer radicalization as the IRGC will exercise more power and influence in the domestic affairs of Iran. His death, coupled with the election of Trump, regional instability, and Turkey’s policy shift collaborating with Russia and Iran on Syria, open the possibilities for a new balance of power in the region.
is a visiting research fellow at the Middle East Centre at the London School of Economics.
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