Could Iran’s Hardline Turn Scuttle Diplomacy?

In a country driven by a revolutionary Islamic ideology to which most political and military leaders avow abiding loyalty, it is refreshing to hear senior officials and experts talk horse sense. The Islamic Republic’s ideological objective since day one has been the “export” of its revolution, and with the country increasingly coming under hardline influence, the rhetoric at least is bound to turn more uncompromising. However, there seems to be growing recognition, even among Iran’s so-called principlists, that global events and attitudes are bound to affect Iran’s national scene.

Such seems to be the view of Babak Negahdari, an ally of Majles Speaker Mohammad-Baqer Qalibaf who took over as the head of the Majles Research Center after Alireza Zakani moved into the Tehran mayor’s seat in 2021. In surprisingly candid terms, Negahdari, who holds a medical biotechnology degree rather than one in economics, acknowledges that the country’s reserves of money are dwindling. He attributes this in part to the Ra’isi administration’s sudden removal of the “preferred” currency rate instituted by the Rouhani administration. According to Negahdari, Iran’s need for imports in the face of a fall in domestic production is going to impose $3.7 billion in additional costs on the National Development Fund (NDF), the country’s rainy-day reserves. This comes at a time when, regardless of who ends up in the White House following the November election, the American president is likely to tighten the sanctions noose around Iran. Negahdari thus concludes that Iran’s economic recovery will depend on the country’s ability to ease the pressure on itself by cultivating better political and business ties regionally and internationally. Economist Parviz Khoshkalam-Khosrowshahi independently confirms Negahdari’s stance. Noting how Iran draws on NDF reserves to create a rentier economy, unlike wealthy countries that deposit their sovereign funds from the sale of oil in special savings, he highlights the importance of a de-escalation in tension between Iran and neighbors. Reza Bardestani, a staff writer for the reformist Atab-e Yazd, also concurs with Negahdari’s view about the likelihood of increasing pressure from the White House. An economic news outlet puts it quite succinctly: international sanctions act as “brakes” on Iran’s economic development. Another economic news outlet with hardline leanings also recommends that Iran engage in “economic diplomacy.”

All of this is well and good, but there is the growing prospect that the hardliners of the Paydari Front and their allies, who are poised to concentrate greater political and economic power in their hands, will not find these arguments convincing. As mentioned earlier, Negahdari is a political ally of Qalibaf, and there are indications that the extreme hardliners are gunning for the Majles speaker himself. If they succeed in removing him, or even weakening his position, it is difficult to see that Nezam leaders will heed such advice to de-escalate tensions with the rest of the world.

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