Explanation: Iranian hardline supporters should maintain their economy and foreign policy after vote
DUBAI, June 16 (Reuters) – The expected victory of a hard-line supporter in the Iranian presidential election on Friday is unlikely to slow his attempt to revive a nuclear deal and break free from sanctions, clerics in the power being aware that their political fortune depends on the fight against the worsening economic difficulties.
The victory of a security hawk like Ebrahim Raisi would allow the new government to claim any economic benefits stemming from the relaunch of the 2015 nuclear deal, which the outgoing administration may agree to in the coming weeks.
A rekindled pact would likely see a lift of the tough US restrictions that have cut back vital oil exports, with new revenues starting to pour in at the start of a new government’s tenure.
At the same time, a deeply anti-Western government might be reluctant to roll back Iran’s regional rivalry with the Gulf Arab states allied with the United States, unless the country’s highest authority, the Supreme Leader, Ayatollah Ali Khamenei, does not order him to do so.
Raisi, an uncompromising judge, emerges as the favorite in the five-a-side race, thanks to his support from Khamenei. Raisi has expressed support for Iran’s nuclear talks with world powers.
WILL IRAN CHANGE ITS POSITION IN NUCLEAR TALKS?
Unlikely. Khamenei, not the president, has the final say on Iran’s nuclear and foreign policies.
With palpable economic misery at home, Iranian leaders cannot risk restarting talks from scratch after the elections.
Iran is negotiating with six major powers to revive a nuclear deal abandoned in 2018 by then-US President Donald Trump, who argued he was too soft on Tehran. As part of the deal, Iran agreed to curtail its nuclear program in exchange for the lifting of international sanctions.
Trump reimposed sanctions that reduced Tehran’s oil revenues and excluded it from the international banking system.
If and when a deal is restored, Iran expects to be released from most US sanctions.
Like Khamenei, Raisi approved of the talks, but the middle-ranking cleric said a “strong government should implement them.”
A restoration of ties with the United States, which Iranian leaders have called the “Great Satan” since taking power in a 1979 revolution, remains out of the question.
WILL A NEW PRESIDENT CHANGE ECONOMIC POLICY?
Whoever wins, freeing themselves from the most severe US sanctions will remain the main economic objective.
For hardliners, even if they anticipate the victory of one of their own on Friday, the economy remains their Achilles heel.
From the main establishment supporters to working-class Iranians and business elites, all are feeling the impact of soaring inflation and rising unemployment to varying degrees.
Iranian clerics fear a resumption of street protests that have erupted across the country since 2017. Officials admit authorities are vulnerable to anger over worsening poverty.
“Raisi’s main challenge will be the economy. An eruption of protests will be inevitable if he fails to cure the nation’s economic pain,” a government official said.
The candidates promised to create jobs and stop the fall in the value of the rial. But none have published detailed plans.
The prices of basic commodities like bread and rice are rising daily. Meat is too expensive for many, costing the equivalent of $ 40 per kilogram. The minimum monthly wage works out to about $ 215.
Inflation is expected to reach 39% this year from 36.5% last year, while unemployment will rise to 11.2% this year from 10.8% in 2020, the IMF estimated.
WILL OIL POLICY CHANGE?
The objective will remain to free oil exports from sanctions.
The sanctions have cost Iran billions of dollars in oil revenues and lost market share within the Organization of the Petroleum Exporting Countries, largely to its regional rival, Saudi Arabia.
Industry analysts say that if sanctions are lifted, Tehran could increase crude production from the current 2.1 million barrels per day (bpd) to a pre-sanctions level of 3.8 million bpd by some months.
But the global shift to low-carbon fuels, combined with the impact of the COVID-19 pandemic on energy demand, makes Iran a less attractive market for many energy majors.
While some European refiners have expressed interest in buying Iranian crude when sanctions are lifted, few Western oil companies have publicly expressed their willingness to invest in Iran.
Russian oil and gas producer Lukoil (LKOH.MM) said earlier this month that he would be interested in returning to Iran if sanctions against the country were lifted.
WILL IRAN CHANGE ITS REGIONAL POLICY?
It’s not clear, and the highest authority on foreign policy anyway is Khamenei, not the president.
Iran’s Arab Gulf neighbors want to end pressure from Tehran for domination of the region, where it competes with rival Saudi Arabia for influence from Syria and Iraq in Yemen and Bahrain.
“Regional policy is firmly under the control of Khamenei and the IRGC (…) which means that there will probably be broad coherence (after the elections)”, said Henry Rome, Eurasia Group analyst, saying reference to the Iranian Revolutionary Guards.
Riyadh believes that any resumption of the 2015 agreement should be a starting point for talks aimed at curbing Iran’s missile program, one of the largest in the Middle East. At the same time, Riyadh has had direct talks with Iran in an attempt to contain the tensions.
“Iran could achieve a victory if the issues pressed by Riyadh and its allies, such as Tehran’s missile program and its proxies, are not included in the nuclear pact,” said Salah Nasrawi, an expert on policy in the Middle East. -East.
Additional reporting by Bozorgmehr Shrafedin in London Writing by Parisa Hafezi, William Maclean
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