The oil market has had a somewhat muted reaction to recent attacks on oil tankers, appearing to have set aside concerns about the diplomatic storm brewing in the Middle East and instead focusing on the latest oil demand projections.
Iran’s Supreme Leader Ayatollah Ali Khamenei is placing his supporters in key government posts in advance of presidential elections scheduled for 2021. The measure aims to ensure that a power transition to his loyalists takes place smoothly amid domestic economic turmoil and rising tensions in the country on how best to deal with the United States. In May 2018, the United States withdrew from the Iran nuclear deal, a move that provoked hard-liners to sharply criticize President Hassan Rouhani for signing the deal in 2015.
Things have gone downward since the Iranians agreed to halt major nuclear enrichment projects as part of the Joint Comprehensive Plan of Action. Iran is suffering from an economic debacle exacerbated in part by renewed sanctions imposed by the administration of President Donald J. Trump, as well as by gross economic mismanagement and widespread corruption inside and outside of government circles. As a result, the country’s national currency, the rial, has rapidly devalued as Rouhani’s government has come under siege by Parliament for his apparent inability to pull the country out of its current quagmire.
Several key state institutions controlled by the supreme leader have asked to run the country instead of the Rouhani government. These institutions, including the Executive Staff of the Order of the Imam and the Foundation for the Oppressed, both of which control billions of dollars of state funds, concluded that the Rouhani government is incapable of running state affairs and that they need to step in to fill the vacuum caused by government inefficiency. However, Khamenei rejected the proposal in order to enable Rouhani to function in the last two years of his presidency, maintaining that powerful institutions in Iran should not attempt to run state activities parallel with the government.
Khamenei made this call at a meeting with members of the Expediency Council, the body responsible for overseeing state policies and resolving political disputes among state institutions, such as the Parliament and the Guardian Council, which supervises national elections and parliamentary legislation. The Expediency Council has members appointed for 5-year terms by the current supreme leader. Rouhani did not attend the meeting between the council members and the supreme leader. But the Larijani brothers, who are considered strong allies of the supreme leader, including former head of the judiciary Sadegh Larijani, were there. In December 2018, Khamenei appointed Sadeqh Larijani to lead the council.
His brother, Ali Larijani, remains a potential candidate in Iran’s next presidential election scheduled for 2021. He maintains a conservative political stance that the supreme leader appreciates. But, at the same time, as a long-serving speaker of parliament, Larijani has a demonstrable record showing willingness to accommodate different political factions when necessary. This trait has turned him into an acceptable presidential candidate for the reformists, who have given up hope of finding a strong candidate of their own to run for president that is also acceptable to the supreme leader.
Sadegh Larijani has also fought back over holding an alleged 63 bank accounts in his name, each worth millions of rials, while he served as chief of Iran’s judiciary prior to his recent appointment to lead the Expediency Council. The charge comes amid frustrations in Iran over corruption in Iran’s judicial system. Larijani dismissed such charges and insists that the accounts that were in his name were in fact directly supervised by the supreme leader. As head of Iran’s judiciary, Larijani also promised to prosecute anyone who undermined the Islamic Revolution during nationwide anti-government protests in December 2018, and heavily cracked down on labor unions and political prisoners.
Larijani’s successor at the judiciary – Ebrahim Raisi – is another appointee of the supreme leader. Raisi, who ran a tight presidential race against Rouhani in 2017, has promised to continue heavy nationwide crackdowns against organized civic groups, activists, and protestors whose actions have been deemed by the state to pose a national security threat. He has vowed to fight corruption, but he insists that it is not widespread within the judiciary, and limited to only a few cases. His public record as a former prosecutor shows very little tolerance toward people and groups whose actions previously had been said to have posed a national security threat, including political prisoners. In fact, according to a 1990 Amnesty International report, Raisi is accused of complicity in the mass sentences that were carried out against political dissidents in the late-1980s. Raisi was until recently the chairman and custodian of Astan-e Quds-e Razavi, Iran’s vast and wealthy conglomerate of holy shrines. His appointment to the position led to speculation that he might become a candidate for Iran’s next supreme leader once Khamenei passes away. Raisi was also recently appointed as deputy of the Assembly of Experts, which is responsible for appointing the next supreme leader.
Khamenei’s son, Mojtaba, also considered a contender for supreme leader, is quietly taking on a more public role after completing seminary studies in the city of Qom. In recent months, his pictures have surfaced more frequently in Iranian media, whereas in the past few years he was hardly covered by the press. The remaking of his image from a young son of the leader into a pious religious figure in his own right and his recent trip to Iraq with the powerful head of Iran’s Quds Force, Major General Qassim Suleimani, suggest that Mojtaba might take on a more prominent public role in the future of Iran.
The supreme leader has used the Friday prayer imams’ network in Iran to advance a defiant political agenda for the country. In March 2018, the 92-year-old former Friday prayer leader in Tehran, Ahmad Jannati, was re-elected to chair the Assembly of Experts. Jannati is a critic of the nuclear deal and the bid to join the Financial Action Task Force, the inter-governmental body that monitors global funding of terrorism. The assembly he heads has just said that joining the task force would be a strategic mistake. Ahmad Khatami, another hard-line member of the assembly and temporary Friday prayer leader of Tehran has publicly raved about Iran possessing the formula for a nuclear bomb.
Ayatollah Ahmad Alamhoda, who is considered the most powerful Friday prayer leader from the religiously conservative city of Mashhad, encouraged crowds to rally against Rouhani to condemn the nuclear deal in late December 2017, which then led to nationwide anti-government protests.
Khamenei is also bringing younger, but still loyal, revolutionaries to the fore, a trend his office has labeled a necessary “youth orientation” to make the Islamic Revolution more receptive and engaged with the views of Iran’s younger generation. Mohammad Javad Haj Ali-Akbari, a former student of Khamenei, is now Tehran’s Friday prayer leader. He is the youngest Friday prayer imam in Iran and has led the powerful Policymaking Council of Friday Prayers since December 2018. Mohammad-Hassan Aboutorabi-Fard, a former deputy of parliament and conservative hard-line figure, became Tehran’s Friday prayer imam for a short period until the appointment of Ali-Akbari. The popular Mohammad Ali Al-e-Hashem who previously served in the Islamic Revolutionary Guard Corps, is a representative of the supreme leader and now the Friday prayer leader of another major city in Iran, Tabriz.
The supreme leader also appoints key figures to a host of other institutions in Iran that are key to his maintaining his powerbase. These include appointing members of the Guardian Council, which oversees Iran’s elections including parliamentary elections, by vetting candidates. The council is also increasingly vocal in issuing opinions on draft bills or positions that Parliament takes. The supreme leader maintains two appointees in the Supreme National Security Council presided by the president of Iran, and appoints the head of the broadcasting agency in charge of nationwide radio and television programming, the armed forces staff, the Foundation for the Oppressed, the security and disciplinary forces, and major charities, universities, and religious organizations.
These vast powers have led to growing speculation in Iran that the position of its president – current or future – will be far less significant in how the country is led. There is also an ongoing debate in Iran over whether the country will do better getting rid of the presidency all together, in favor of having a prime minister to act as a go-between for the supreme leader. Prime ministers would likely be more popular and agile given that they would be elected by Parliament and could be removed by its members should they underperform.
This is not a new proposal – Iran has toyed with the idea since the mid-1980s. Ironically, back then it was the current supreme leader who rejected the idea, insisting that the foundation of the revolution rested on holding popular presidential elections rather than electing prime ministers by vote of Parliament.
But Khamenei’s recent moves to consolidate his power have weakened the presidential powers and may challenge the wisdom of holding future elections in Iran. They have also given the supreme leader immense power to dictate the outcome of the Iran nuclear deal and Iran’s ongoing negotiations with European countries on whether to stay in the deal or leave it, if European Union financial mechanisms put in place to allow Iran to circumvent the U.S. sanctions regime are deemed insufficient by Tehran.
Tim Callen, mission chief for Saudi Arabia at the International Monetary Fund, spoke with AGSIW about Saudi Arabia's economic reform agenda.
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