Iran: nuclear talks intensify domestic power struggle

Ayatollah Ali Khamenei used to only wear the chequered keffiyeh scarf on special, mainly military, occasions: visits to war fronts with Iraq in the 1980s or army ceremonies. But since 2000, Iran’s supreme leader, the highest authority in the country for more than 30 years, has rarely been seen in public without it draped over his shoulders.

His adoption of the symbol of Palestinian nationalism — chaffiyeh in Persian — was triggered, says a relative, by the surprise 1997 victory of the reformist president Mohammad Khatami who swept to power promising political development at home and detente with the west. The scarf has subsequently become an outward symbol of resistance in Iranian minds — a resolute defence of Islamic ideology at home and abroad covering everything from its nuclear programme to regional and military policies and relations with the west.

Given the strain that Tehran has been under for the past three years, Ayatollah Khamenei could have been forgiven for wearing two keffiyeh at once. The country has weathered the most extensive sanctions in its history — costing the economy at least $200bn according to officials and hurting ordinary Iranians — as well as constant rhetoric around US military strikes.

But the regime — at least its hardline elements — have in many ways been emboldened by surviving the “maximum pressure” policy of Donald Trump’s administration without the system collapsing and millions of protesters pouring on to the streets in mass demonstrations.

In 2018 Trump withdrew the US from the nuclear deal — the Joint Comprehensive Plan of Action — signed with world powers three years earlier to curb Tehran’s nuclear ambitions. Despite Iran’s compliance Washington accused it of violating “the spirit” of the agreement, through its regional and military policies. It imposed sanctions that fuelled Iranian suspicion that the US wanted regime change in Tehran.

There followed a series of tit-for-tat military attacks with Iran shooting down a US drone alleging that it crossed into its airspace. It also launched a missile strike on a US military base in Iraq last year in retaliation for the assassination of Qassem Soleimani, a senior Iranian Revolutionary Guards commander, by the US.

“He will keep wearing chaffiyeh as long as he thinks the Islamic republic is being threatened by radical reforms to show he will not compromise on principles,” says Ayatollah Khamenei’s relative. “And will not allow the US and Israel and reformists to push Iran back in the region, undermine the [ballistic] missile programme or question his absolute authority.”

No room for major compromise

Iran last week joined talks in Vienna with the other signatories of the nuclear agreement — the EU, Germany, France, the UK, Russia and China — on the future of the accord. It declined the chance to speak directly to the US. The chances of a lasting breakthrough, however, seem remote. An apparent cyber attack on Iran’s Natanz nuclear facility last Sunday and Tehran’s announcement this week that it plans to increase the purity of its enriched uranium have heightened suspicions on both sides.

Even before that Tehran’s message appeared clear: there is no room for major compromise with western states or pro-reform forces at home. The regime fears that any U-turn could be interpreted as a sign of weakness jeopardising the survival of the Islamic republic and the loyalty of proxy forces in Lebanon, Iraq, Syria, Yemen and Palestine.

Joe Biden’s entry to the White House has in some ways complicated matters. The US president and European states want to restart the nuclear accord as does Tehran which wants sanctions lifted. But the US wants to attach conditions to any final agreement: a curb on Iran’s ballistic missile programme and its expansionist regional policies.

“After our success in neutralising the US sanctions, Iran’s political position is much stronger than before,” says the relative of the leader. “The US is no longer in a position to set conditions.”

The spectre of direct contact with the US over the nuclear deal has intensified the power struggle in Tehran and further complicated Iran’s political scene ahead of presidential elections on June 18 which reformists fear will be dominated by hardliners and could see the lowest turnout in the country’s recent history. Such an outcome could limit the room for negotiation over the nuclear deal after the election.

The poll comes as the various factions — hardliners, reformists, Revolutionary Guards, judiciary — all jostle to influence any succession battle that would follow the death of the 81-year-old supreme leader.

“Our challenges with the US and Israel are eternal,” says a regime insider close to hardline forces. “The US is like a trailer truck which likes to go into a 4 sq m alley [Iran] and turn. This is possible only if the surrounding buildings [the republic] are destroyed. Why should we let the US into our alley?

“Trump did whatever he could including bringing down our oil exports to almost nothing but the Islamic republic did not collapse,” he adds. “No reformist can even dream of rolling back strategic policies. Relations with western states are not part of our security and economic doctrine. Even Europe is not attractive to us any more as they have no power.”

‘Addicted to sanctions’

Ayatollah Khamenei has made the path to reviving the nuclear deal clear to hardliners — mainly in the Revolutionary Guards, the judiciary and parliament — as well as pro-reform forces linked to the government of Hassan Rouhani.

He has said the country — which never officially left the nuclear accord — will fully comply with the treaty only if the Biden administration takes the first step and lifts all sanctions. Once satisfied, Iran would then roll back its nuclear advances since 2019 including uranium enrichment at higher volumes and purity and installation of more advanced centrifuges. He has also made it clear that there should be no discussions with western powers on non-nuclear issues.

Washington says it wants to strengthen the deal. But Antony Blinken, the US secretary of state, has also promised Congress he will look to curtail Iran’s missile programme and its support for regional militias as part of any extended agreement.

The US welcomed the Vienna talks as a positive step but officials have already expressed frustration. “[We] think it would be better if we could sit down with the Iranians,” a senior Biden administration official said after the first round of talks, adding that indirect negotiations “really makes it slower and more and more complicated”.

The US has yet to specify which of more than 1,500 sanctions the Trump administration imposed on Iran it would lift, but has said it would not remove all of them.

“The problem in the United States and it doesn’t matter which administration . . . is that the US is addicted to sanctions . . . to pressure . . . to bullying,” Mohammad Javad Zarif, Iran’s foreign minister who negotiated the nuclear deal told local media in February. “They do not have any leverage over Iran. They have made us rely on an oil-less economy, oil-free economy. Now our reliance on oil is below 20 per cent. That is a major gain.”  

Zarif may be the best hope for the reformists if he stands in the June 18 poll. But first he would have to navigate the powerful institutions that often weed out candidates from the race long before election day. Hardliners fear a combination of a pro-reform government in Tehran and a Democratic administration in Washington — as it was in the final years of Barack Obama’s presidency — believing it could pave the way for future US intervention in Iran.

“A chance was given to the US once which will not be repeated,” says a hardliner. “It was our good luck that Trump was elected otherwise reformists would have been turned into giants by now.”

The reformist camp fears that a hardline government in Tehran would feed hawkish views in Washington, as well as regional powers like Israel and Saudi Arabia, which could potentially mean more economic pressure on Iran. “Hardliners say they can continue talks but how can they sit at the negotiating table with the US when their main value is strategic hostility toward the US?” asks a member of the reformist camp. “The world would not talk to them and sanctions will continue.”

Rouhani — who has to step down after two terms in office — said in February that “the revolution’s principles . . . are fixed but approaches [to implement them] are not fixed” hinting at little room for manoeuvre if he is succeeded by a hardliner.

“Why are we scared of talking? We are powerful . . . and able to negotiate with the US,” the Iranian president said on Wednesday. “Don’t be scared of the Vienna talks . . . don’t worry that the talks could bear fruit early enough to create problems in the elections.”

After being strengthened by the nuclear pact as his signature achievement, Rouhani promised Iranians that he would strike similar international deals in other fields. This was interpreted by hardliners as an attempt to persuade the supreme leader and the Revolutionary Guards to let him strike a grand bargain with the US. But the policies of Trump effectively torpedoed the Iranian president’s efforts.

Rouhani denies there was ever any grand plan but the mistrust between the hardline and reformists camps — always high — is much greater now making the June election critical after more than 20 years of reformists disrupting hardliners’ plans in national polls.

As a result the Revolutionary Guards — legally responsible to “safeguard” the Islamic system and “its achievements” — will have a stronger say ahead of this election and any future talks with the US. It has become the most organised and powerful institution under the Islamic republic due in large part to an economic empire that stretches into all aspects of the economy and a fearful intelligence service leading some to speculate that a military government could take power.

But Saeed Hajjarian, who was once dubbed the “reformists’ brain”, told the Financial Times, in a written interview due to ill health, that the establishment of a military government under Ayatollah Khamenei was unlikely. “The guards’ role will weaken [in the long run] in particular considering that its power in the region is decreasing and the US is earnestly seeking to undermine the guards’ regional role.”

Hajjarian — who was shot in the head in a vigilante attack in 2000 — says that the reformist camp will not be silenced even if its politicians are pushed to the sidelines after the election. 

It is a view echoed by others: “Iranians will not let one group be the dominant force,” says one reformist. “The guards already have a strong presence everywhere and act like a government in shadow but it is not easy for them and hardliners to take over all the institutions.”

Turnout fears

The priority for the guards — and the other powerful factions — is to influence the transition of power once the supreme leader dies. The guards are mandated to ensure political divisions do not disrupt the process and that the country — about half of which is home to non-Persian ethnicities including separatists — does not fall under the control of the US.

Yet perhaps the biggest threat to all the factions is a low turnout at the June poll. Estimates suggest it could be as low as 40 per cent with a young educated population extensively using social media to express discontent over corruption, the state of the economy and the regime’s wider policies. Since 2009, there have been at least three major outbreaks of unrest across the country.

And while hardliners in the regime might have been emboldened by surviving sanctions, the economic reality for ordinary Iranians has been very different. Iran says sanctions have cost the country $200bn directly and much more indirectly. Inflation rose from 8.2 per cent in May 2018 to 48.7 per cent now, according to official figures, and the national currency has lost its value by four times since then. The IMF estimates that Iran's gross official reserves declined from $122.5bn in 2018 to just $4bn in 2020, although this is disputed by the central bank. 

As a result, the number of Iranians experiencing extreme poverty has risen by five times to more than 20m people, economic analysts say. Meanwhile, tens of billions of dollars of the country’s revenues are frozen and beyond reach in overseas banks due to sanctions making the system unable to support businesses. The pandemic has compounded the situation claiming more than 65,000 lives — the highest in the Middle East.

Economic hardships have demotivated voters. Many of those who voted for Rouhani in 2013 or 2017 are unwilling to even go to a polling station this year, politicians say.

“Even if [former reformist president] Khatami runs for president, I will not vote for him,” says Homeyra, a 50-year-old housewife who has voted in national polls since she was 16. “It makes no difference to us as they are all the same and we become poorer every day.”

Reformists hope that a deal with the US and any relaxation of sanctions over the next two months could help reverse that sentiment before the election. “The reformists’ main rival is not a hardline candidate for now,” says Mohammad Ali Abtahi, a former reformist vice-president. “It’s the low turnout. Even if the political system allows senior reformists to run, which is not yet clear, the main challenge remains.”

Analysts suspect Ayatollah Khamenei has concluded that an embarrassingly low turnout, anything below 50 per cent, would damage his regime’s credibility at home and Iran’s negotiators in any talks with the US. He has encouraged high turnout — even though that is likely to benefit a reformist candidate — and said not “one hour” should be wasted in the efforts to have sanctions lifted: a direct challenge to hardliners who had wanted to block any new agreement before polling day.

In a public speech in March with keffiyeh on his shoulders, he described the election as “an investment” for the future. He added that “the higher the turnout, the bigger the benefits” would be for the country as a whole in its efforts to “push away the enemy”.

Additional reporting by Katrina Manson in Washington