Hassan Rouhani. Credit: Official portrait, rouhani.ir

By Jasmin Ramsey
WASHINGTON, Jul 23 2013 (IPS)

The successful campaign of Iran’s President-elect Hassan Rouhani may have been built on the persistence of hope among Iranian voters for a better future.

It remains to be seen how effectively the moderate cleric will manage expectations among Iran’s key political factions while fulfilling his campaign promises."Rouhani has an opening, but actual changes in Iranian policy historically have required consensus among several segments of the political elite." -- Kevan Harris of Princeton University

It’s the economy

Rouhani’s main domestic challenges are related to the economy, Djavad Salehi-Isfahani, a Virginia Tech professor, told IPS.

“More specifically, first, to bring down inflation and restore macroeconomic stability given the commitments made by the [Mahmoud] Ahmadinejad administration in the current budget,” he said.

“Second, to make progress on the sanctions front to encourage investment to create jobs, and third, to spread the benefits of economic growth evenly, among the poor who voted for him at least as strongly as the middle class,” said the Brookings non-resident senior fellow who was in Iran this June.

“Rouhani’s challenge is to bring tangible improvements in the next year or two, before the patience of those who voted for him runs out, so he can demonstrate that a moderate government who is willing to engage with the outside world can better deliver on prosperity than the populist isolationists,” Salehi-Isfahani said.

A successful overhaul of Iran’s economy will rely heavily on negotiations with key world powers over its controversial nuclear programme.

“With Dr. Rouhani there is real opportunity for gaining some positive momentum for at least trying to deescalate the nuclear crisis,” said Ali Vaez, a senior analyst at the International Crisis Group, at a Wilson Center event here on Jul. 22.

Vaez was less optimistic about prospects for Iran achieving the substantial sanctions relief it needs to battle its economic troubles.

“The sanctions currently in place on the regime are an intricately woven spiderweb… [that is] extremely difficult to untangle,” he said.

Shifting alliances

Rouhani’s unexpected victory would not have been possible without pivotal backing by reformist and centrist leaders.

“The implosion of the conservatives in the June election will likely lead to a reshuffling of elite alliances in Iran,” Kevan Harris, a Princeton sociologist, told IPS.

“If Rouhani’s win results in a new coalition of centre-right and centre-left politicians and their social bases, then we could see shifts in both foreign and domestic policy,” said Harris, who was in Iran during its election.

Nicknamed the “diplomatic sheik” during his service as Iran’s chief nuclear negotiator from 2003-2005, Rouhani has promised to reroute the country from the path it was put on during the presidency of Mahmoud Ahmadinejad.

“Our main policy will be to have constructive interaction with the world,” said Rouhani during his first press conference as president-elect on Jun. 17.

While Iran’s Supreme Leader Ali Khamenei said on Sunday that the U.S. is “not honest in their dealings” and he was “not optimistic” about bilateral talks with Washington, he did not rule them out.

“We’ve always believed and continue to believe in interaction with the world but the important point is to understand the other party and determine its goals and tactics, because we will be tripped up if we don’t understand them correctly,” Khamenei said in comments posted on his website late Sunday.

Washington experts are meanwhile urging a cautious approach toward Iran’s new administration.

“This distrust of Iranian moderates has very deep roots [in Washington]…It won’t be overcome easily and it’s not inherently contradictory for an administration that does in fact seek to use diplomacy to have a certain degree of scepticism,” said Suzanne Maloney, an Iran expert at the Brookings Institution, at Monday’s Wilson Center event.

“Those who are expecting this sort of big sanctions relief are creating expectations, particularly among the Iranian people, who are only going to be disappointed when and if we don’t see them on Aug. 4 [Rouhani’s inauguration] as some dramatic gesture from Washington,” said the former State Department policy advisor.

What lies ahead

While Washington’s response to Rouhani’s election victory was lukewarm at best, advocates of engagement with Iran received a boost last week.

That was reflected by the fact that 131 members of the hawkish Republican-led House of Representatives – including a majority of House Democrats – signed a letter to President Barack Obama urging him to “reinvigorat(e) U.S. efforts to secure a negotiated nuclear agreement”.

Rouhani tweeted his approval: “131 Congressmen have signed a letter calling on President #Obama to give peace a chance with Iran’s new president #Rouhani.”

Twenty-nine former government officials and national security experts also sent a letter last week to President Obama urging him to “seize the moment to pursue new multilateral and bilateral negotiations with Iran”.

If nothing else, Rouhani’s surprise election, which resulted from clever maneuvering by his prominent endorsers, proved that Iranian politics are unpredictable.

“As the third televised debate for the Iranian election revealed, nuclear policy over the past 10 years has not been based in a consistent and broad elite strategy in the Islamic Republic,” Harris told IPS.

“If it was all up to Leader Khamenei, then the embarrassments which spilled out between [Saeed] Jalili, [Ali Akbar] Velayati, and Rouhani on live television – and seen by about two-thirds of the country – would never have happened.

“I take that to mean Rouhani has an opening, but actual changes in Iranian policy historically have required consensus among several segments of the political elite, not radical attacks from the right or left,” he said.

“If Rouhani appoints a few conservatives in his negotiation team or his cabinet, this may be misconstrued in Washington as a sign of intransigence, when in reality this may actually be Rouhani’s way of keeping everyone on board so they cannot later veto his policy initiatives,” he said.

Harris told IPS that Obama also faces political challenges at home.

“Obama needs a foreign policy win after the messes in Syria and Egypt which took place under his watch, which showed how the U.S. is not the dominant actor in the region though it’s still an important one,” he said.

“If Obama’s advisors can make the point that Iranian influence is not the driving factor of every Middle East crisis that the U.S. suffers from, which is a true but not popular sentiment in Washington, then it would be easier to sell some sort of deal with Iran along with a reduction in sanctions to a domestic audience,” Harris said.

“But a cold shoulder by the U.S. in the guise of playing hardball is the path of least domestic resistance,” he added.

Ahead of President Barack Obama’s trip to Mexico and Costa Rica, experts here are expecting that security will take a back seat to issues of economic cooperation between the U.S. and Mexico.

Mexican President Enrique Pena Nieto. Credit: cc by 2.0

But some Washington advocacy groups are sounding alarms about shifting away too soon from critical security and rights concerns.

“A lot of the focus is going to be on economics,” President Obama told reporters Tuesday. “We’ve spent so much time on security issues between the United States and Mexico that sometimes I think we forget this is a massive trading partner responsible for huge amounts of commerce and huge numbers of jobs on both sides of the border.

“We want to see how we can deepen that, how we can improve that and maintain that economic dialogue over a long period of time,” he continued.

This shift is notable, as issues of security, law enforcement and combating crime formed the backbone of U.S.-Mexican relations during the previous Mexican administration.

“Even before [former Mexican President Felipe] Calderon took office, it was part of the discussion with the U.S., and the U.S. and Mexican administrations went on to develop a close and complex relationship on security matters,” Eric Olson, associate director of the Latin America programme at the Woodrow Wilson Center, a Washington think tank, told IPS.

President Obama is slated to meet with Mexican President Enrique Pena Nieto later this week before meeting with Costa Rican President Laura Chinchilla.

“President Obama having a visit [early in his second term] symbolises the importance of Mexico to the U.S.,” Chris Wilson, an associate at the Mexico Institute, a think tank here, told IPS.

The United States is Mexico’s largest trading partner, and the two countries engaged in nearly 500 billion dollars worth of trade in 2012. Much of that trade is in what are known as intermediate inputs, referring to semi-finished U.S. goods that are finalised with Mexican resources, a process seen as increasing the competitiveness of both countries.

Remittances sent home from Mexican immigrants living in the United States are also a substantial factor in the countries’ economic ties, totalling more than 20 billion dollars last year.

The upcoming summit’s focus on economics squares with a narrative gaining traction in media coverage and academic circles in recent years that paints a picture of an economically booming Mexico.

“During the administration of Calderon, the perception of Mexico in the media was largely one of drugs and violence – the headlines about Mexico were about drugs and trafficking, organised crime, gruesome violence,” Wilson recalls.

“But the new [Mexican] administration has come in at a time when economic growth is pretty robust. They are trying their best to shift the narrative of Mexico by talking more about these economic issues: the reforms that are happening in Mexico that will promote growth, new investments coming into Mexico that will promote growth.”

Development’s Achilles heel

Still, for a country like Mexico that is still struggling with issues of citizen security and rampant crime, many suggest that economic growth would have to start from the bottom, with more robust social programmes and safety nets, before the international community becomes too optimistic about economic and trade booms.

Cynthia Arnson, director of the Latin America programme at the Wilson Center, calls Latin America “far behind” in developing policies that might leverage inclusive growth.

“There is not a sense of shared responsibility … when your social policy is remittance, when your lack of social policy is permitted,” she told reporters on Friday. The region, she said, needs “a widespread recognition of the role the private sector needs to play in paying taxes, improving government … [and] institutions.”

In a telephone interview with IPS, she noted that the U.S. relationship with Central America is likely to remain more focused on security concerns.

“There is a growing consensus in the development community that sustainable growth can’t and will not happen unless levels of violence are brought under control,” she told IPS.

The World Bank recently called citizen insecurity the “Achilles’ heel of development” in Latin America.

Members of the U.S. Congress and advocacy groups here are also wary of turning a blind eye to human rights concerns in Mexico.

“The dire human rights situation in Mexico is not going to solve itself,” Maureen Meyer, a senior associate for Mexico and Central America with the Washington Office on Latin America (WOLA), an advocacy group, said in a statement.

“As the bilateral agenda evolves, it is critical that the U.S. and Mexican governments continue to focus on how best to support and defend human rights in Mexico.”

In a press release issued last week, WOLA expressed agreement with a letter from 23 members of Congress to Secretary of State John Kerry that stressed that “[t]he human rights crisis will not improve until there are stronger legal protections, increased human rights training for Mexico’s security forces, and more government agents held responsible for the human rights violations they commit.”

Even as the focus of U.S.-Mexico relations turns to economics, there is no broad agreement on how exactly a shift toward trade relations will strengthen the “economic competitiveness” of both countries.

“Part of the challenge is that we have this term, but we have a laundry list of issues that could fit into that term,” the Mexico Institute’s Chris Wilson said.

“What we still don’t have is a coherent agenda or a way in which the leadership from the top level can engage the public or business community or civil society … and create something more [meaningful],” he told IPS.