Why Iran’s hardliners won parliamentary elections | FT

Hardline forces in Iran have
succeeded at the ballot box for the first time
in seven years, partly by capitalising on Donald
Trump’s hostility and maximum pressure strategy. The parliamentary
elections weaken president Hassan Rouhani, who
is in his second and final term. And it further crushes
reformers’ hopes that the country could open
up to the outside world. It also sets the tone for
presidential elections next year, with
analysts predicting another hardline victory. But a low turnout also
reflects the disillusionment many Iranians feel
towards their leaders across the political spectrum. At this polling
station in Tehran people turned out
in decent numbers. But at others there
was just a trickle. I met one 25-year old who
voted for Rouhani in 2017. Back then, he hoped
the nuclear deal Iran signed with world
powers would usher in a new period of prosperity. Now, he says he was brainwashed. He didn’t vote this time, saying
all politicians are the same. Such grim emotions are common in
a country of 80m people facing increasing economic hardship. Trump’s sanctions have strangled
the government’s ability to export oil and pushed the
country into a deep recession. The Iranian regime must abandon
its pursuit of nuclear weapons, stop spreading terror,
death, and destruction, and start working for the
good of its own people. Mr Rouhani said in December that
Iran had lost more than $200bn in revenue and investment
as a result of Mr Trump’s maximum pressure strategy. Prices soared as inflation
rocket up to about 40 per cent. And the Iranian rial lost
more than half its value over the past two years. The government is struggling
for foreign currency, cut off from the global banking network. But shops are
still well stocked. Years of isolation
in four decades, since the 1979
Islamic Revolution, forced the republic to
develop a diversified economy. Iranian companies produce
much of the country’s food, pharmaceuticals, steel,
and cement needs. And some factories manufacturing
household appliances and textiles are expanding. This is all part of the
government being forced to push import substitution policies. The car industry, which employs
more than 500,000 people, is a prime example. After Peugeot and Renault
pulled out of joint ventures in the country because
of US sanctions, the government is desperate
for local production to fill the gap
and for the sector to remain an important
part of the economy. And here at the
Iran Khodro facility where the company is
ramping up production. In September, it was
producing just 900 cars a day. But now it’s 2,000,
and the company plans to go to more than 2,500
or about 2,500 in a few months. The reason for the increase
is partly due to government support, help from the
Ministry of Defence, which is helping produce some
of the more technical components you need to produce
these cars, and also because of the localisation
of spare parts. Before, the company was
relying more on imports. Now, it’s relying more
on local production because of sanctions. It’s an example of how
Iranian companies are trying to get around the US
regime of maximum pressure to ensure they maintain output. But this cannot mask the
intense pressure on the economy. Iran’s oil exports are vital
for foreign currency earnings. Analysts estimate they’ve
plummeted to a few 100,000 barrels a day because
of US sanctions. The IMF forecasts
zero growth this year. Most foreign companies
have pulled out. Virtually no western
bank will do business with an Iranian entity. And that’s despite the fact
that most of the world, including European
and Asian governments, oppose Mr Trump’s decision to
pull out of the nuclear deal and impose sanctions. Iranian businessmen
are forced to import goods using trans-shipment hubs
in Iraq, Turkey, the United Arab Emirates, and
Afghanistan, as they struggle to keep their companies going. Iran’s crisis began in May
2018, when Mr Trump unilaterally withdrew the US from the
nuclear deal, which Iran had signed three years earlier. Under the accord,
Tehran had agreed to limit its nuclear
activity in return for the lifting of
many western sanctions. Iranians were beginning to feel
the benefits as the republic’s oil exports soared. Western companies, including
Peugeot and Renault, returned, keen to tap
into the country’s vast natural resources
and large consumer market with a youthful
aspirant population. But after pulling out
of the nuclear deal, Washington imposed wave
after wave of sanctions, and Iran responded by
increasing its nuclear activity. The US blamed Tehran
for a September attack that struck at the heart of
Saudi Arabia’s oil industry. As well as sabotage
attacks on tankers in the Gulf in May and June. The US and Iran came to
the brink of full-blown war in January, after Mr Trump
authorised the assassination of General Kassim
Soleimani, Iran’s most powerful and revered commander. Iran retaliated by firing
more than a dozen missiles at Iraqi military bases
hosting US troops. Iranian officials appear
resigned to the fact that Mr Trump could now secure
another four years at the White House. A few days ago we took
bold and decisive action. Brigardier-General Hossein
Dehghan, a military adviser to Ayatollah Ali Khomeini,
Iran’s supreme leader, told me that Iran
did not want war. But he said Tehran continues to
support its regional proxies, and to develop its
ballistic missile programme. The result is that
the economic pressures on all ordinary Iranians
is only likely to increase. Tensions will remain high
throughout the region, the lingering fear
that they could erupt. Hardliners will be in the
ascendancy at the centre of the Islamic Republic’s
power structures. Public disgruntlement has
exploded onto the streets in recent months. In November, several
hundred people were killed as security
forces put down protests triggered by
massive hikes to fuel prices. Anti-regime protests
erupted again in January, after the government admitted
mistakenly shooting down a Ukrainian airliner killing
all 176 people on board. The January protests
were notable for the brazen verbal attacks
against the elite Revolutionary Guards and the Supreme
Leader Ayatollah Khomeini. Perhaps the biggest challenge
facing Iran’s leaders is managing the country’s
depleted resources while maintaining
social stability.

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  1. Globalisation was an abject failure.

    If the world shuts down due to this virus, Iran would be a case study how home grown industries are very important and should be above bubblegum economic considerstions

  2. Why journalists (not only at FT) always forget to mention that “Tehran had agreed to limit its nuclear activity” FOR 10-15 years, let alone the reasoning of Trump Administration?

  3. Do u remember how liberated Iran was before the extremists took over. Its high time my fellow Iranians reclaim and re live that life. loosing hope behaving like defeatist and not voting in large numbers is not going to help. Even if the elections are rigged… Everything begins with the right action.
    Vote in hordes will make it increasingly difficult for the rogue to rigg subsequent elections

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