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After the Iranian Uprising

Authors: Abbas Milani, Director of Iranian Studies at Stanford University, Research Fellow at Hoover Institution; Author, Eminent Persians Alex Vatanka, Senior Middle East Analyst, Jane's Information Group; Adjunct Scholar, Middle East Institute Djavad Salehi-Isfahani, Professor of Economics, Virginia Tech; Nonresident Guest Scholar, Wolfensohn Center for Development, Brookings Institution Steve Fairbanks, Former State Department Analyst on Iran; Former Director of Radio Free Europe/Radio Liberty's Persian service
Interviewer(s): Greg Bruno
June 29, 2009

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Iran's contested presidential vote on June 12 has raised new questions about the regime's long-term stability and prospects for U.S.-Iran rapprochement. Violent crackdowns on Iranians protesting elections that they deemed fraudulent have brought condemnation from the United States and its allies. The aftermath has also altered analysts' views on a number of important issues, including Tehran's relations with Washington; the future of Iran's nuclear program; the regime's economic outlook; and the fate of media in Iran. Four experts--Abbas Milani, Alex Vatanka, Djavad Salehi-Isfahani, and Stephen C. Fairbanks--each offer insight into one of these issues.

Abbas Milani, Director of Iranian Studies at Stanford University, Research Fellow at Hoover Institution; Author, Eminent Persians

U.S.-IRAN RELATIONS

In the aftermath of the June contested presidential election, Iranian society has been in a state of unexpected flux. It is not clear whether the tyrannical triumvirate of [Supreme Leader Ayatollah Ali] Khamenei/[President Mahmoud] Ahmadinejad/Islamic Revolutionary Guard Corps (IRGC) that pulled off the electoral coup will triumph or whether the popularly supported democratic trinity of [Mir-Hossein] Mousavi/[Mehdi] Karroubi/[Mohammad] Khatami, supported in the shadows by [former President Akbar Hashemi] Rafsanjani, can succeed in rolling back the electoral power grab. It might even be that the current impasse will result in a protracted, low-grade war of civil disobedience. In this context, Iranian democrats have unambiguously sought the moral support of the U.S. government, but they have eschewed any hint of connection to any agency of the U.S. government. The tyrannical triumvirate has been desperate to find any credible link between the United States and the democratic opposition. So worried are they about the words of U.S. President Barack Obama that they have, incredibly, broadcast on at least one occasion a mangled translation of his speech, alleging that Obama has supported the efforts of the government to put down the "rioters."

The Obama administration, cognizant of the karma that haunts it, and of the triumvirate's machinations, has so far carefully, even masterfully, calibrated its statements to developments on the ground in Iran. It has avoided any effort to score cheap political partisan points at the expense of the nation's long-term strategic interests. Obama has managed to at least partially realize two apparently irreconcilable goals of U.S. interests and ideals: He has offered support for the Iranian people, sternly criticizing the triumvirate's brutalities, yet avoided offering any excuse for the paranoid regime to credibly claim that the United States is interfering in Iran's domestic affairs. At the same time, the United States has joined a de facto united front with European allies to pressure the regime to abstain from even more brutal action, while keeping open the possibility of one day negotiating with Iran.

If the tyrannical triumvirate succeeds in keeping Ahmadinejad in power, the regime will be both more weakened domestically and more isolated internationally. The triumvirate's only clear source of support will be the ranks of the Basij-gangs-cum militia that have so far done the bulk of beatings and killings of peaceful demonstrators. With a badly tarnished domestic and international reputation, and with a sadly failing economy in desperate need of foreign investments, the triumvirate will be, in spite of its bombast, in desperate need of negotiating with the United States. In the less likely case that the democratic trinity will succeed in rolling back the power grab, not only will Khamenei's stature be seriously compromised, but the Mousavi coalition will be emboldened by its popular support, and beholden to the people, not the clerics or the IRGC. The Iranian populace is overwhelmingly in favor of improving relations with the United States, as well as providing adequate guarantees to the world about its nuclear program. Fifty-two percent of the people even support recognizing the state of Israel.

Timeline: U.S.-Iran Relations A troubled history--from supporting the toppling of the democratically elected government of [Mohammad] Mossadeq in 1953 to supporting "regime change" in 2003--and the clerical regime's clever use and abuse of this history had made U.S.-Iran relations a lose-lose game for the United States. But today, through prudent diplomacy, it has become a win-win situation for America.

Alex Vatanka, Senior Middle East Analyst, Jane's Information Group; Adjunct Scholar, Middle East Institute

NUCLEAR NEGOTIATIONS

Given the last two weeks of violent regime crackdown on popular protesters in Iran and subsequent international reprimand, the immediate prospect for the resumption of nuclear negotiations between Tehran and the West looks bleak.

As the intensity of the crackdown by Iranian security forces has escalated since the controversial presidential election on June 12, Western capitals have had to be more vocal in condemning Tehran's actions, which in turn prompted Iranian President Mahmoud Ahmadinejad to tell U.S. President Barack Obama and EU leaders to back off from meddling.

Indeed, numerous hard-line Iranian officials, including Ahmadinejad and Iran's supreme leader, Ayatollah Ali Khamenei, have repeatedly accused Western states of instigating the protests. Never mind that these Iranian officials have produced no evidence to substantiate these claims.

The point, however, is that during an unprecedentedly critical time in the thirty-year history of the Islamic Republic, the Ahmadinejad/Khamenei alliance will find it arduous to maintain that the West is seeking to overthrow the regime through a "color revolution" (enghelab-e makhmali), while simultaneously negotiating with the same Western states over the future of Iran's nuclear program. It is not just a delicate balance to strike; these are likely mutually exclusive options.

From this perspective, nuclear negotiations with the West will have to be put on the back burner, at least until normality returns to the Iranian polity. Then, the challenge from the reformist opposition will be neutralized and the characterization of the West as the nemesis of the Iranian nation will no longer serve as a chief rallying call for the Ahmadinejad presidency, which is sanctioned by Khamenei, Iran's unelected final political arbiter.

The longevity of such a moratorium on nuclear negotiations with the West can be affected by two main factors. One relates to the resilience of the reformist opposition, and whether the power struggle at the top of the Islamic Republic can somehow be contained to allow for a regime-wide consensus about Iran's next nuclear policy step. At this stage, this scenario looks unlikely given the deep top-tier split in the regime. In the absence of such a consensus, it is probable that Iran will witness the emergence of a more balanced and far more probing debate about the handling of the country's nuclear file at the United Nations. The intensity and speed with which such a debate can emerge will also depend on external pressures.

Italian Foreign Minister Franco Frattini, chairing a recent G8 meeting, said that Western states "want the doors to remain open for Iran, but dialogue should not exist just for the purpose of dialogue" and that Iran's nuclear file will be revisited at the UN General Assembly in September unless progress on this track can be achieved before then.

Depending on the severity of future penalties that Iran has to pay for noncompliance with UN resolutions, it is now highly conceivable that Iran's nuclear dossier becomes another example that the anti-Ahmadinejad bloc will increasingly use to highlight what they view as his government's incompetence. While factional differences over tactics on how to proceed with the nuclear program have been apparent since 2005, the post-June 12 election political rancor can only help forge an alternative viewpoint on the nuclear program that has the backing of at least of the reformist leadership. This would represent the first time since Iran's nuclear program came to light in 2002 that the country's political elite have distinct official positions on where to go from here.

Djavad Salehi-Isfahani, Professor of Economics, Virginia Tech; Nonresident Guest Scholar, Wolfensohn Center for Development, Brookings Institution

ECONOMIC OUTLOOK

TEHRAN -- Even before the crisis over the election outcome broke, the prognosis for Iran in the coming year was not good. Back in October oil prices had started to fall and the contractionary measures taken by the Central Bank several months earlier to rein in inflation had slowed the economy. Last year, Iran's imports had soared above $70 billion, flooding the market with cheap imports that hurt domestic production in agriculture and industry. The economy was in need of policies that would allow it to continue to grow while it adjusted to lower oil prices. Anticipating the need for adjustment, Ayatollah Khamenei, Iran's supreme leader, called the new Iranian year 1388 (2009/2010) last March the year of "reforming the consumption model."

Oil prices have recovered some, but barring a supply disruption, they will remain well below last year's prices. For more than six months, the government has faced large potential trade and budget deficits, but to help his reelection, [President Mahmoud] Ahmadinejad's government continued to spend, raising salaries and giving transfers to the poor.

All three opposing candidates heavily criticized Ahmadinejad's spending policies, especially for the high inflation they caused. The hope before the election was that a new government would use its political capital to limit spending and to attract foreign investment and credit.

Ahmadinejad's reelection and the growing political crisis that it has unleashed have dashed those hopes. Economic growth averaged more than 6 percent during his first term (something that his opposition never acknowledged) but this year it will be at most half as high. Depending on how this crisis develops--whether or not it spreads to strikes and disrupts production--the growth rate could become negative.

The economic policies of the first Ahmadinejad administration were characterized by redistribution. There were handouts, such as sharp increases in salaries of retired and low-income civil servants, and "justice shares" worth up to $1,000 per person (about four months of minimum wage) that were distributed to lower-income individuals in rural and urban areas. Those shares are expected to pay about $80 per year. There was also a large credit program for small enterprises, which was run through the banks but was in part thwarted by the Central Bank's effort to bring down inflation.

Ahmadinejad's second term will likely face difficulties of two sorts. First, heightened expectation among his base will bring enormous pressure to continue his redistributive policies. Many who have received benefits expect them to continue, and many more are waiting in line to receive them. Turning the spigot off now, especially at a time when his popularity among the middle class is at a low, would be politically very costly. Second, economic recovery without the cooperation of the same middle class is very difficult. They are the trained workforce that runs the government, operates schools and hospitals, and manages industrial production. The modern middle class, which has grown substantially in size and importance thanks to economic growth, went into this election hoping for greater political representation. What they got was an election result they could not trust and an ultimatum to stop questioning those results.

Given the unprecedented political crisis the government faces, the looming budget and trade deficits are unlikely to be filled by foreign investment or borrowing. Furthermore, as a result of the course of events [following the contested vote], Iran's middle class, which plays a critical role in the country's development, feels snubbed and rejected by the country's political leadership. Unless a political settlement is reached that can ease these constraints, the prognosis is for the return of high inflation and very low economic growth.

Steve Fairbanks, Former State Department Analyst on Iran; Former Director of Radio Free Europe/Radio Liberty's Persian service

MEDIA LANDSCAPE

Iran's media landscape is narrowing, at least in the short term, a casualty of the regime's backlash against popular discontent over the disputed June 12 presidential election. The government has imposed heavy-handed restrictions on media critical of President Mahmoud Ahmadinejad recently, shutting down newspapers, filtering news websites, jailing journalists, and censoring political content. The crackdown has not been total, however, and Iranian journalists eventually will find ways to get around press restrictions. They have done so repeatedly in recent years, sometimes protected by powerful backers within the country's factionalized political system. Much remains unsettled among Iran's power brokers, whose opaque decision making over the future of the country will determine the extent to which Iran's press can resume criticizing government policies.

Social networking sites such as Twitter and Facebook have attracted much attention during the recent disturbances, as has Iran's huge "blogosphere." The postings on YouTube alerted the world to the size of the pro-Mousavi opposition and the severity of the government's crackdown, and Twitter's role in mobilizing Iranians was undeniable. But new media's ability to serve as a reliable source of information is limited by the difficulty of determining the accuracy of its user-generated content. Verifying where a YouTube video was shot and by whom is not always possible, and it is difficult to determine if "tweets" are actually originating inside the country. The Iranian government now spreads disinformation over Twitter, such as providing fake news about the demonstrators' leaders, and the Basij paramilitary has been particularly active in launching its own pro-government weblogs.

Educated Iranians seeking news and analysis on local politics and economics will continue to turn to domestic newspapers and news sites rather than blogs and other new media. Though the traditional media are all biased in their affiliations with different political personalities or groups, and much of their news content is government controlled, they nonetheless contribute to a varying level of political dynamism. Strong rivalries among key regime players are likely to ensure that some critical outlets will remain despite the restrictions a second Ahmadinejad administration will likely impose. For those outside Iran, a careful reading of these media will remain essential for understanding domestic politics.

Television and radio are by far the most important news sources for Iranians, but there are no private broadcasting stations. The Islamic Republic's constitution places all broadcasting under the control of the office of the supreme leader, resulting in heavily propagandized content. State-run television showed blatant favoritism toward Ahmadinejad in the run-up to the recent election, generating complaints that resulted in an unprecedented series of lively debates among the four main candidates during the final weeks of campaigning. The insults that [Mir-Hossein] Mousavi and Ahmadinejad in particular hurled at each other enflamed passions among the public, making it unlikely that television's brief experiment in evenhandedness will be repeated any time soon.

Responsible foreign-based media such as the U.S.-funded Radio Free Europe/Radio Liberty's Radio Farda, Voice of America's Persian TV, and the BBC's Persian TV and radio will remain important in the Iranian media landscape for the foreseeable future, as will numerous foreign news websites in Persian and English. They provide news content unfiltered by the Iranian government and analysis and debate that are not often available at home.

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