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Increasing tensions threaten Rouhani’s ability to reform

Iran’s annual Quds Day in support of Palestinian liberation, held on the last Friday of Ramadan, falls during a time when Iranians flee the capital in search of cooler weather. The parade is marked by a vocal minority that chants slogans such as “Death to America, Israel and the UK,” amid an array of papier-mache missiles and burning flags.

But this year’s event offered an unexpected sight as some marchers chanted slogans hostile to Iranian President Hassan Rouhani, such as “Death to Rouhani” and “Death to the American imam.” These slogans highlight a recent uptick in tensions between the moderate president and conservative factions. Rouhani has become a target.

Although it is not unusual for post-revolution presidents in Iran to face stronger opposition in their second term, the magnitude of the coordinated attacks against Rouhani suggest his reform agenda is antagonizing the Iranian Revolutionary Guard Corps (IRGC) and hard-liners such as Supreme Leader Ali Khamenei.

Rouhani’s recent re-election with 57 percent of the vote — 7 percent more than his first election in 2013 — was a plebiscite for his actions and promises. It also gave him a mandate to reform and provide answers to Iranian popular aspirations to liberalize society. Although Rouhani — conscious of his limited power — chose to focus on economic revival, he has still experienced a backlash from conservatives who yield great power and authority.

With intentions to create better economic ties to the EU, Rouhani recently dispatched Foreign Minister Mohammad Javad Zarif to Germany and Italy to promote the lifting of sanctions related to Iran’s human rights violations. The participation of EU companies in Iran’s economic revival is dependent on its ability to reassure Europe.

This will only happen if the Financial Action Task Force (FATF) — the global standard-setting body working against money-laundering and financing of terrorism — removes Iran from its watchlist. The FATF said it welcomed “Iran’s high-level political commitment to address its strategic deficiencies” in this field. But further steps will require a level of transparency that Rouhani will not be granted by the IRGC.

The IRGC is a dominant player in Iran’s economy; it reportedly controls ports and holds influence in many sectors via a network of affiliates. Rouhani’s reforms threaten the IRGC’s domination. They are on a collision course, with the president saying the IRGC is “a government with a gun.”

The Gulf Cooperation Council (GCC) cannot afford for a failed state to emerge on its northern border. A powerful Iran able to manage popular expectations, external terrorist threats, internal separatist threats and drug-trafficking is in everyone’s best interests.

Marc Martinez

He has tried without success to rein in the IRGC by financially empowering Iran’s less ideological army, the Artesh. He also sought compromise by giving the IRGC free reign in Syria in exchange for its neutrality on domestic reforms. But the entrenched animosity between them is growing, endangering Rouhani’s ability to institute reforms.

Hawkish politicians worldwide believe the absence of reforms will push Iranians to revolt against their government. US Secretary of State Rex Tillerson, for example, said his administration supports regime-change in Iran, while Sen. John McCain publicly discussed the issue with Maryam Rajavi, the president-elect of the National Council of Resistance of Iran (NCRI).

Attempts by previous US administrations to implement regime-change in the region, such as the 2003 invasion of Iraq, should be avoided at all costs. Moreover, the US strategy of saber-rattling by bolstering relations with Tehran’s major enemies will only reinforce the IRGC and Iran’s most hard-line factions.

Previous strategies, including roll-back and sanctions, have failed, reinforcing Iran’s nationalist spirit while paving the way for the emergence of a generation of populist politicians such as former President Mahmoud Ahmadinejad and Tehran Mayor Mohamed Baqer Qalibaf.

Rouhani’s initiative to negotiate with world powers was marketed in Iran as the only solution to revive the economy and increase employment. The promise of foreign investment, compounded by a sluggish economic recovery, is creating a rift between Rouhani and the Iranian populace, and could push more Iranians to favor populist candidates or simply detach from politics altogether.

While Tehran is blamed for causing regional conflict and tension, the instability that would result from Rouhani’s failure would exceed any damage caused by actively supporting his reforms. The Gulf Cooperation Council (GCC) cannot afford for a failed state to emerge on its northern border. A powerful Iran able to manage popular expectations, external terrorist threats, internal separatist threats and drug-trafficking is in everyone’s best interests.

More than ever before, the international community must support Rouhani in developing Iran’s economy. Strict enforcement of the 2015 nuclear agreement is no longer enough. The international community broke Iran’s economy; it is responsible for fixing it.

• Marc Martinez is a senior associate at The Delma Institute, a risk advisory firm located in Abu Dhabi. He can be reached on Twitter: @marcFmartinez