The Iranian Presidential Election

The Iranian Presidential Election: Significance and Potential Outcomes

With less than a few days before Iran holds its presidential election, a victory for incumbent president Hassan Rouhani is likely. This comes despite blowback from his failure to deliver on political reforms, as well as the underperformance of the economy after Rouhani sold the nuclear accord and removal of sanctions to Iranians as a path to prosperity. Polls have shown that Rouhani may have 54% of the decided vote, sparking the possibility that he may win the election outright on Friday and avoid a runoff.  Polls are scheduled for May 19, with the possible run-off on May 26th.

A couple issues are working in favor of Rouhani and in disfavor of the conservatives. First, every incumbent Iranian president has gone on to serve a second term. With the 2009 election debacle and Green Movement protests still fresh in the minds of the ruling elites, stability and continuity are important factors in the race. Second, Rouhani’s base of reformist/moderate voters has remained solid. When turnout for an election is high, this tends to favor reformists like Rouhani. The conservative base, while mostly consolidated around former prosecutor and current custodian of the Imam Reza shrine, Ebrahim Raisi, is still partially fractured. Tehran mayor Mohammad Bagher Qalibaf, a former chief of the Iranian police force, enjoys significant support.

There are several concerns regarding the election and its outcome. No matter who wins the election, the nuclear accord is certain to remain in place. The Supreme Leader, Ayatollah Khamenei, has ultimate authority over foreign policy issues and the success of the nuclear accord is evidence of his tacit approval. Qalibaf has also indicated support for the agreement. However, a conservative victory would likely still come with risks. Both Raisi and Qalibaf have attacked Rouhani’s tepid economic record, pledging to increase subsidies to poor families and address youth unemployment. Their economic populism reminds the ruling class very much of Ahmadinejad’s destructive economic policies, a situation they do not want repeated.

There is a potential for social unrest. Ayatollah Khamenei warned recently that “disruptors” would be dealt with harshly. Should Raisi or Qalibaf pull off an upset that Iranian voters see as illegitimate, the possibility of protests increases. The regime would likely crack down immediately and decisively. Human rights abuses continue in Iran, but a very public repeat of anything resembling 2009 could give the international community a reason to reassess sanctions.

A victory by either Qalibaf or Raisi may embolden those who wish to see a more assertive Iranian foreign policy. A confrontation in the Persian Gulf or a missile test may invite the Trump administration to junk the nuclear deal. Earlier this year, the administration put Iran “on notice” after Tehran launched a test missile. A US pullout from the nuclear deal would, of course, be harmful to US investors interested in exploring the emerging market in Iran. While current restrictions on business with Iranian banks and the complexity of the sanctions themselves have deterred investors, it would be wise to continue to navigate these issues and prepare for an Iran that is ready to do business with US investors. Lynx Global Intelligence is prepared to provide on-the-ground knowledge of emerging markets in Iran, as well as clarify what the current risks are and explore ways of entering Iranian markets.

Some have suggested that Raisi’s candidacy is really a dry run for fielding a replacement for Supreme Leader Ayatollah Khamenei, who is suffering from prostate cancer. Raisi, a conservative cleric with considerable experience as a prosecutor, is also the custodian of the Astan Quds Razavi, the powerful foundation that manages the shrine of Imam Reza in Mashhad. Raisi is also a member of the Experts Assembly, which has authority to choose the Supreme Leader. Raisi is an untried candidate who has been criticized for his lack of charisma, but the regime may be testing the appeal of Raisi as a potential leader, as well as the resonance of his conservative message.

At the same time, it is too simplistic to see establishment groups in Iran such as the Experts Assembly through a binary reformist vs. conservative lense. Saeid Golkar, a visiting fellow for Iran policy at the Chicago Council on Global Affairs, has instead suggested viewing such groups as divided between “three pillars”: the state bureaucracy, the clerical establishment, and the military. Golar positions Rouhani close to the state bureaucracy, and Raisi with the military. Khamenei navigates these groups, and despite the fact that he has expanded the powers of his office, the Revolutionary Guard still exert significant influence in Iranian politics. Despite this complexity, the regime seeks continuity and an avoidance of any shock to the system—in this case, an unprecedented loss for an incumbent president. The replacement of Rouhani with an administration that may be inclined to pursue an aggressive foreign policy, economic populism, and further antagonize a nation that is ready for change is widely seen as a potentiality best avoided.