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Iran's Internal Political Fray

Interviewee: Farideh Farhi, Affiliate Graduate Faculty, Department of Political Science, University of Hawaii
Interviewer: Bernard Gwertzman, Consulting Editor, CFR.org
November 1, 2011

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In recent months, Iranian domestic politics have been dominated by sharp disagreements within the conservative camp that put President Mahmoud Ahmadinejad "and his tight group of advisers or supporters in conflict with all other institutions of the Islamic republic," says Iran expert Farideh Farhi. The conflict stemming from protests after 2009's disputed reelection of Ahmadinejad has been managed "but not resolved through severe repression of the Green Movement," and could depress voter turnout on the March 29, 2012, parliamentary elections. A new multibillion-dollar banking scandal is suspected to involve highly placed officials within Ahmadinejad's government. Farhi sees little likelihood of a dialogue between Iran and the United States any time soon, contending the United States cannot engage and threaten at the same time. "In order to have a conversation with Iran, there has to be not only change of conduct on the part of the Iranian government but also a change of conduct on the part of the American government," Farhi says.

What's going on in Iran these days? We keep reading about opposition to Ahmadinejad from more conservative members of parliament, and now about a big banking scandal (RFE/RL) involving $2.6 billion. Is Iran in as much turmoil as these stories suggest?

Iranian politics are very complex, but at the most general level since 2009, internal political conflicts in Iran have had two dimensions. One is the broader conflict over the direction of the country, and one has involved decisions and disagreements within the conservative ranks of people who are known as "principlists" in Iran. The broader conflict in Iran has been somewhat managed but not resolved through severe repression of the Green Movement, which arose during the disputed 2009 election and the imprisonment of key reformist political leaders.

So the current public disputes center around the "principlists"?

Yes and they have involved all significant institutions of the Islamic republic and the relations between the executive branch and the parliament, the judiciary and executive branch, and even between Supreme Leader Ayatollah Ali Khamenei and President Ahmadinejad. What you see is the common denominator of the president and his tight group of advisers or supporters essentially in conflict with all other institutions of the Islamic republic.

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However, each of these conflicts has a dynamic of its own, and unlike what has generally been reported, cannot really be reduced to a conflict between Khamenei and Ahmadinejad over power. In fact, in some of these, you could make the argument that Khamenei has so far been Ahmadinejad's savior in preventing, for instance, a frontal parliamentary attack to impeach the president. So, while in the conflict with the Green Movement, Khamenei appears to be the chief antagonist against the reformist camp, in the second set of conflicts Khamenei tries to appear as above the fray and the chief mediator. [He seems] concerned about the fact that too many open conflicts among principlists may endanger the country's safety [while] facing a multitude of internal and external enemies. And we see scandals like the "great banking scandal" being played out within the context of this intraconservative conflict.

Was it really a banking scandal? How could you have such a scandal in such a closed society?

The reality is that it is precisely in a society in which there is no free press allowed to investigate these kinds of activities [that these things can happen. Additionally,] there are not sufficient checks and balances, so these kinds of scandals have a tendency to occur more than elsewhere. This recent banking scandal--which has shaken the political system to its core--actually involves the meteoric rise of an investment conglomerate, which in a span of five or six years reportedly increased the assets in their holding company from about $50,000 to over $4 billion.

Iranian politics are very complex, but at the most general level since 2009, internal political conflicts in Iran have had two dimensions. One is the direction of the country and one has involved decisions and disagreements within the conservative ranks.

The company sometimes called the Amir Mansour Arya Group, or just simply the Arya Group, is essentially run by four brothers. The scandal involved the fact that this company was able to borrow quite a bit of money from certain branches of government-owned banks using letters of credit that were not sufficiently registered and, in some cases, actually forged. They were able to then use the money to buy privatized companies that were for sale by the government. It is very clear that such a meteoric rise and these kinds of activities would not have been possible without facilitation by some authorities. Exactly how high that facilitation goes is something to be debated and will be the source of discussion in the impeachment process of Ministry of Economy and Finance Shamseddin Hosseini. [Hosseini survived a parliamentary vote on November 1 after an appeal by Ahmadinejad (AP).]

At this moment, it looks like the parliament is interested in placing all the blame on the executive branch. And of course, the executive branch is trying very hard to convince everybody that the lack of regulation and supervision did not solely lie in the executive branch but that parliament is also responsible. In fact, in a counter attack, the head of the powerful national security and foreign policy committee in the parliament has been mentioned as a person also facilitating the economic activities of this investment conglomerate. There was such popular outrage to what had happened. People were effectively stunned with the huge amounts of money that were involved. It is not at all clear whether partisan politics will allow authorities to get to the bottom of this and whether this will end being part and parcel of the kind of infighting that has been going on among the conservative ranks.

There is supposed to be a parliamentary election next year and the presidential election in 2013. Ahmadinejad cannot be reelected. Has he lost power as a lame duck?

There is no doubt that the conflict Ahmadinejad has with Khamenei--which led to him not showing up (AP) to work for ten days--had tremendous impact on his standing in the country. Because of the 2009 election, Ahmadinejad was not very popular among those who voted for his opponents anyway, but he did have a base of support among people who are committed citizens of the Islamic republic and support Khamenei. So once the conflict occurred, Ahmadinejad developed serious issues with that base as well. So his standing suffered. Added to that is the reality that he is a lame-duck president.

In order to have a conversation with Iran, there has to be not only a change of conduct on the part of the Iranian government, but also a change of conduct on the part of the American government.

However, he is still in charge of very vast resources of the state, and obviously he and his supporters are very interested in continuing their dominance over state institutions. They have been extremely active, particularly in terms of trying to recruit candidates for the upcoming parliamentary elections, which are to be held in March 2012, and that is precisely where quite a bit of partisan politics is going on. Other conservative groups have stated very clearly that they will be watching to make sure that [Ahmadinejad and his supporters] will not use the resources of the state to recruit candidates in support of themselves. But the problem is that those conservatives who oppose Ahmadinejad are not themselves very popular and therefore have real issues getting elected. So far they have been unable to create a unified approach to introducing their candidates.

So exactly what will happen in the parliamentary election is very much up in the air. It is not very clear who will prevail in the election; it will be an intraconservative fight, but which wing will actually be in a more powerful position is not yet clear. Added to that is the reality that the election will probably be one that will not see much participation, which is the concern for a regime that has always made the argument that popular participation in elections is a sign of its legitimacy. Because of 2009, there is a sense of lethargy about participation in the upcoming election from a good part of the population as well as in the reformist leadership, many of whom are in prison.

The United States charged Iran (WashPost) with a plot to kill the Saudi ambassador to Washington. Did this create much of a stir in Iran?

It did. It was reported extensively, and of course what was interesting in the reporting was essentially the uniform reaction of all political groups across the political landscape. There was a sense of disbelief, in some cases to the point of ridicule, that this charge was made by the United State without clear evidence and, from the point of view of various groups in Iran, on very shaky foundations. The centrists and the reformists made an argument that, despite the fact that the charges were ridiculous, Iran has to face this reality that Ahmadinejad's very bombastic and aggressive foreign policy has essentially created the context for these charges to be made, not only by the United States but also Saudi Arabia, and to be believed by some people in the region and elsewhere. So the critique turned what has happened into a discussion of the foreign policy that has been pursued for the past few years, leading one commentator to say that Ahmadinejad's foreign policy is not an assertive foreign policy as he claims, but a policy of creating enemies.

So clearly Ahmadinejad's standing has been weakened in the last year or so. Is there an opportunity for the United States to do anything?

Iranian Foreign Minister Ali Akbar Salehi said the other day that given the track that the United States has taken of increased sanctions, increased accusations, and increased pressure, a situation has been created that is not conducive to talks. I have always been in favor of engagement with Iran, but you cannot engage and threaten at the same time. Historically, that has not been a very useful track for the United States. It has not worked, and there is no reason to think now that the threat and the pressure have intensified that the Iranian government will be responsive to an offer of conversation. Secretary of State Hillary Clinton did say in her interview with BBC Persia that the United States is always open to having talks, but the Iranians have also consistently said that the double-track approach the United States insists on is not acceptable. At this point, I do not see much possibility for a conversation even though that may be something that would be good. In order to have a conversation with Iran, there has to be not only a change of conduct on the part of the Iranian government, but also a change of conduct on the part of the American government.

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