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Opinion
June 2, 2017 www.intellinews.com I Page 22
Iran’s entrenched power structure means that Rouhani is unlikely to be able to persuade the hardliners to change their ways, in particular the IRGC’s support for insurgents in Syria, Lebanon and Yemen. The president and parliament, domi- nated by reformist and moderate conservative allies, have some scope to introduce economic reforms, which may include plans to restructure the banking and tax system and improve the busi- ness environment. But the conservatives, led by the Supreme Leader Ali Khamenei, determine security policy, as they control the police and the army.
During his trip to the Middle East last week, American President Donald Trump engaged in anti-Iran rhetoric and emphasised the US alli- ances with Israel and Saudi Arabia, both sworn enemies of Tehran. If Trump continues in this vein it will likely encourage the IRGC to maintain, if not bolster, support for allies in the region.
At the same time, the hardliners will likely resist attempts by Rouhani to introduce greater trans- parency into the Iranian economy in order attract investors. Many are put off by the high levels of corruption – much of it linked to the IRGC – and the risk of partnering with companies that may have connections with sanctioned IRGC entities
or individuals. Under former Iranian President Mahmoud Ahmadinejad, the Revolutionary Guards became the largest commercial power in the country and now control up to 50% of the economy together with other conservative elements linked to the Supreme Leader.
These forces have little interest in the arrival of Western companies, which would present unwel- come competition, or in having their business affairs placed under greater scrutiny. Rouhani attacked corruption in the IRGC and allied elements in Iran’s conservative-controlled judiciary during his re-elec- tion campaign. But it seems he cannot do much to curb their excesses and economic influence.
So while Rouhani’s election may have averted the re-imposition of nuclear-related sanctions, the
significant limitations on his power means that he will struggle to tackle the issues that have de- terred foreign investment.
Tom Laub is an analyst at Alaco. Alaco Dispatches is the business intelligence consultancy’s take on events and developments shaping the CIS region.
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