Reality Check on Prospect of Negotiations
Several reactions to the hopeful message from Iran’s ministry of foreign affairs about JCPoA negotiations are noteworthy. Some see it as the Ra’isi administration’s attempt to positively impact the financial market in the final days of the year. Others believe it is designed to balance the harsher stance of the new, “radicalized” Majles towards negotiations. Still others think the West has no interest in negotiations, especially now that Iran is unloading Chevron oil from the seized tanker Advantage Sweet. In 2025, after the presidential election in the U.S., some argue it will be Iran’s standing with the IAEA that will determine whether the West will adopt a more confrontational or more cooperative attitude toward Iran.
IRGC’s Subtle Signals in Regional Gas Fields
Days after a GCC ministerial meeting reiterated Saudi and Kuwaiti ownership of the al-Durra/Arash gas field, Gholamreza Abed, the commander of the IRGC’s Khatam al-Anbia Construction HQ, underscored its international endeavors, including involvement in crucial gas and oil fields such as Arash, Esfandiar, Farzad, and Yadavaran. While Iran has generally restricted its official responses to regional territorial disputes to statements from the ministry of foreign affairs, denying the claims or advocating for peaceful resolutions, this display of engagement can be interpreted as a nuanced signal from the IRGC. It highlights not only the IRGC’s operational prowess but also its significant influence and stake in these key economic and strategic areas, potentially serving as a powerful and deterrent force in the dynamics of regional geopolitics.
Twelfth Majles Dynamics
Analyzing the makeup of the Twelfth Majles, observers anticipate highly charged competition among conservative factions, leading to a decline in political decorum for the forthcoming session. This expectation is underscored by Supreme Leader Ali Khamenei’s preemptive caution against internal conflicts, highlighting the leadership’s escalating concerns. The persistent discord, intensified by hardline figure Hamid Rasa’i, for instance, reinforces the notion that expressions of revolutionary fervor and loyalty to Khamenei may be superficial, with individual and factional agendas overshadowing national interests. The quick removal of a high-ranking IRIB deputy, closely associated with the Paydari Front, after broadcasting a program in clear defiance of Khamenei’s counsel, demonstrates the leadership’s willingness to quell disputes when needed, regardless of the influence of factional affiliations.
Another End of Year, Another Wage Adjustment Dispute
Iran’s command economy seems to lie at the root of blue-collar workers’ dissatisfaction. With ten days before the Iranian new year, authorities have not announced the minimum wage for these workers. Labor unions claim this unusual delay is designed to marginalize them, leaving no room for negotiation. Another disputed matter is the cost-of-living adjustment due to 42-percent inflation, leaving the unions and the government far apart. With current wages at 7.3 million tumans—less than one-third of the current poverty line of 23–25 million—the labor force is demanding an increase of 60–70 percent. The government is trying to stick to a 20-percent wage raise it envisions for while-collar workers as a base. The minimum subsistence level for a family of four is around 32 million tumans.
Hijab Returning to Center Stage
With the 1 March election behind them, hardline delegates elected to both the Majles and the Assembly of Experts (AoE) are fulfilling expectations, reverting to form and threatening to impose Big Brother punishments on hijab violators. Hardliners had expressly said they would wait until after the vote to take up the issue again. According to a reelected MP, law enforcement will dip directly into the bank accounts of hijab violators to fine them. With this being the first Friday after the election, Friday prayer leaders also chimed in, demanding that government establishments, even hospitals, enforce strict hijab. Mashhad’s Ahmad Alamolhoda drew his inspiration from the supreme leader’s recent speech to the AoE in which he exhorted them to stand firm for Islamic principles.
No Economic Solution While Sanctions Continue
At a conference on strategic planning, Bijan Namdar-Zanganeh, oil minister in the Rouhani administration, and Mas’ud Nili, the former president’s senior economic advisor, offered two contending visions for Iran’s strategic energy planning. Namdar-Zanganeh called for a massive increase in oil production for the next 15 years, hitting a total of 7 million barrels a day. Nili contended that the two main engines of Iran’s economy, namely, oil and industrial production, had failed to spur economic growth. Without full commitment to free-market operation and the elimination of the government’s heavy hand, he argued, nothing would change. Both agreed, however, that no strategy would work until sanctions were lifted.
Next Leader of Assembly of Experts
In light of Ahmad Jannati’s withdrawal due to old age, there is considerable speculation among observers regarding who will assume leadership of the Assembly of Experts. The head of the Assembly and its presidium are expected to wield significant influence in determining the next supreme leader of Iran, should such a decision become necessary. Several prominent names have come up in discussions, including Hashem Hoseini-Bushehri, Ebrahim Ra’isi, Ahmad Alamolhoda, and Alireza A’rafi. While the number of votes does not appear to be a decisive factor in these deliberations, other considerations such as proximity to the supreme leader, past influence in Assembly sessions, and connections to the clerical community are deemed critical qualities. Reformist observers do not shy away from highlighting the aspirations of Ra’isi’s inner circle for succession.
U.S. Influence in Iraq Spelling Trouble for Iran
Iraq’s oil minister attributes his country’s inability to settle its gas debt to Iran, estimated at between $10 and $11 billion, to sanctions. Observers in Iran associate these remarks with the victory of the hardliners in the recent elections, interpreting them as a clear signal from Iraq for Iran to address its tensions with the U.S. or expect continued challenges in bilateral trade. Despite its financial constraints, Iraq remains a significant client for Iran, driven by factors beyond mere commercial transactions. Tehran has, on occasion, opted to halt natural gas supplies to its own industries in favor of ensuring uninterrupted gas exports to Baghdad, underscoring the depth of this partnership. Meanwhile, reports increasingly suggest that Iran is ceding ground in various Iraqi markets, including the agricultural sector, to competitors such as Turkey and even Saudi Arabia.
Reexamination of Iran’s Foreign Policy
Participants in the seventeenth conference of the Iranian Political Science Association on 6 March believe the developing world order and economic hardship could be the impetus for Iran’s opening up to the West. Speakers at the conference included the likes of Mohammad-Javad Zarif, Ali Larijani, Ali-Akbar Salehi, and Manuchehr Mottaki, all members of Iran’s foreign policy elite, who seemed to agree on key things Iran should understand: 1) multipolarity would be at the heart of the new order; 2) Iran’s national objectives must be based on rational calculations, not ideological-revolutionary doctrine; 3) counterbalancing the West with the China or Russia card is futile; 4) “resistance” has paid off politically, but Iran’s economic failure must be addressed; 5) Iranian universities must produce a new discourse in foreign policy based on Iran’s active international presence, not “resistance” and isolationism.
Cloudy Economic Forecast
Considering domestic and international political trends, economists see troubling signs ahead for the economy. Domestically, the Majles has turned more hardline and less amenable to international cooperation. Given the fact that economic and market trends in Iran have tracked closely with the country’s foreign policy, unfavorable economic conditions will continue in the face of tension between Iran and foreign adversaries. Even developments that are not directly related would have a direct effect, such as Donald Trump’s clearance of several hurdles on his way to a rematch with Joe Biden. A Trump victory in November is expected to put greater economic pressure on Iran, especially in the value of the national currency against the dollar. The regime’s go-to method of currency manipulation by the Central Bank of Iran will only go so far, say economists, before the dollar sees another jump in value, which has hovered around a record-high of 60,000 tumans. Once people refocus their energies on the market after the Nowruz holiday, economists expect to see new records.
