Iran Elections: What Development Model to Choose

Next elections in Iran do not seem to be a way to redistribute the roles within the system but rather a conflict between the two wings of the system on the priorities and values of the future.

Iran stands on the threshold of two important events: the election of the «Council of Experts» and the parliamentary elections, both elections will be held on the same day - February 26, 2016. The outcome of these elections will deeply affect the future of Iran in the coming decade, because it will determine the balances within the Iranian political system. The importance of the coming "Council of Experts" stands in the fact that it will likely elect the successor to the current Supreme Leader Sayed Ali Khamenei (76 years), while the conflict in the parliamentary elections relies over the opportunities of the current president, Hassan Rouhani, to translate his success on the nuclear file into considerable parliamentary seats.

Iran is no longer the country it was only a year ago, as the conclusion of the nuclear deal brought with it new internal and external challenges. Thus, the return of Iran to the international community opens the doors to new opportunities and risks. And that makes Iran's future more dependent to a large extent to the set of policies pursued by its government both internally and externally, and the current electoral events are two of the most important indicators of the coming general trends.

There are several levels of electoral conflicts: personal, tactical and territorial etc., but the highest level of the conflict remains knotted to the values adopted by the contending parties. With some generalization, we can say that the "Chinese model" favored by the Supreme Leader and the circles around him, is challenging the economic liberalism favored by president Rouhani as well as the reformists and moderates.

Iran and the "Chinese model"

The term "Chinese model" refers to the economic policies adopted by China after the death of Mao Zedong and the rehabilitation of Deng Xiaoping in 1976; these policies led to the high growth rates along with the expansion of Chinese GDP sharply compared to the previous decades. That made the «Chinese model» more attractive to Third World countries notably after the period of economic crisis that hit the western world in 2008 and 2009. The following characteristics distinguish the «Chinese model»: relying on a strong role of the state in guiding the economy and society, the absence of political liberalism, the strong role and leadership of the ruling party, and, finally. the careful selection of certain foreign values while neglecting others.

When assaying the mentioned characteristics, we find that the circles around the Iranian Supreme Leader and institutions in its orbit are approaching the “Chinese model” at multiple points. The state and its institutions have played a major role in Iran's economic life before the lifting of the sanctions. And the continuation of this role after the lifting of the sanctions fits very well this political camp because of the known link between political and economical powers. Political liberalism was never a feature of the Islamic Republic of Iran, as the principle of «velayat-e faqih», the absolute ruler of Islamic scholar, corresponds to the Communist Party's dominance of power in China creating a common totalitarian objective between the two countries.

Iran is neither the best democracy nor the most advanced economy in the region, but it enjoys national independence from major powers that surpasses other countries in the region.

Iran, led by the Supreme Leader Ali Khamenei, follows the Chinese strategy's footsteps with a difference in time, place, ability and society conditions. China faced economic recession in the mid- seventies of the last century, and saw the rise of America and Japan. It adopted state capitalism to save its dominant ruling Communist party, and did not revert to the full political openness, which brings internal and external irreversible challenges to the structure of its ruling authority.

Likewise, Iran is trying, after the lifting of sanctions and its reintegration into the international community, to preserve the current political system, by allowing the least possible change to it.

In other words, the Supreme Leader and the institutions in his orbit, prefer a calculated openness to the world which should retain a strong role for the institutions under his control, to maintain the current political and economic powers, by preventing any infiltration of the West into the economy , and then the politics of Iran, as hoped by Washington to change the Iranian regime from inside using economic partnerships and penetrations.

Iran and economic liberalism

It seems remarkable that the reformist movement in Iran has shifted from overly radical hostility to Washington during the early years of the Iranian revolution, noting that the student leaders who occupied the US Embassy at that time are themselves currently the leaders of the reformist movement, to overly radical embracement of economic liberalism.

Thus, reformists and centrists like President Rouhani and Sheikh Rafsanjani rely on the opening towards the West to improve the economic situation and attract investments, to meet the aspirations of large segments of Iranian youth eager to change. The United States, being on the top of the current international system, remain, according to that vision, the force capable of facilitating those ambitions, politically, economically and regionally.

As the reformist movement opposes the fundamentalism of the hard-line conservatives in Iran and their domination on the state's institutions, and the restriction of civil and political liberties resulting from this dominance, they favor fundamentalism of a different kind which is «the market fundamentalism» (economic liberalism) in order to achieve their political ambitions.

The economic liberalism has the following characteristics: the rationalization of fiscal policy, while avoiding large fiscal deficits in relation to GDP; redirecting government spending to support goods and services over basic education and health infrastructure investments; reform of the tax system in favor of rich investors to push them towards more investment.

In addition to the above, the interest rate determined by the Central Bank plays a central role in directing the economy. For example, by maintaining a competitive exchange rate of the national currency against foreign currencies, by the liberalization of foreign trade price when lifting protectionist tariff barriers, as well as by facilitating foreign investments through benefits and guarantees offered to them. To this we can add the privatization of state-owned enterprises and legal guarantees for private property, to encourage foreign and domestic private sector.

This prescription allows an opening that could push the economies concerned, in some cases, to achieve high rates of growth in the early stages of its implementation, and to attract huge foreign investments which are necessary for Iran at this stage. The country needs investments on the one hand, and desires to develop its lurking economic potentials on the other hand .

Iranian President Hassan Rowhani did not hide his alignments at the formation of the first government after his victory in the presidential election in 2013. The economic ministries were given to ministers who lean towards economic liberalism and received their education in Western universities, notably American.

This was a clear sign to the West in general, and to Washington in particular, that Tehran aspires to economic openness and that president Rouhani leans towards a more liberal economy. This signal was designed to push the West towards an agreement on the nuclear file program.

Therefore, reformists look at the economic liberalism as being a means to change the structure of political power in Iran to their advantage, since the opening of the markets and the liberalization of foreign trade would modify radically the balance of power within the Iranian society in the medium and long term.

In addition, the structural hegemony of conservatives over Iran's state institutions through different tools - not the least "the Council of Constitution Guardianship" which can exclude candidates - plays a crucial role in guiding the election results. And that was actually what happened during the last weeks. Thus, relying only on the polls' mechanism in its current form, falls short of achieving the desired reformist change in the balance of authoritarian powers.

The current electoral conflict revolves around a political socio-economic model that would shape the future of Iran in the coming years: either to get closer to the “Chinese model” favored by the Supreme Leader and the institutions around, versus the economic liberalism adopted by the Government of Rouhani and the reformist movement.

The main strength in the hand of the Supreme Leader relies on the value of national independence in the face of major powers, while the weakness of this module is the lack of civil and political liberties.

On the opposite side, the strength in the coalition Rouhani-Rafsanjani-the reformists lies in the political reform, civil liberties and openness to the world, while its «Achilles heel» is the consequences of economic liberalism on Iran's national independence .

According to this, next elections in Iran do not seem to be a way to redistribute the roles within the system but rather a conflict between the two wings of the system on the priorities and values of the future.
Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.