Inter-factional Rivalry and Iran’s Strategic Interests

As Iran and the United States, a key member of the P5+1 world powers, inch toward deicing their 35-year-old frosty and at times traumatic relations, jockeying from all sides of political spectrum target the direction of this process and whether the icy relations should ever start to melt.

Regional opponents of improved ties between Iran and the West, in particular with the United States, see on the horizon the emergence of a new regional landscape that could impact the dynamics of their long-standing relationship with the West and the future of their alliance with the United States. For these regional opponents, this new landscape entails a resurgent Iran, re-energized by unshackling of harsh international sanctions, that could influence the region’s geopolitical dynamics and siphon off foreign investment from the Middle East’s traditional investment destinations back to Tehran.

But there are equally significant dynamics at play in Iran’s faction-ridden domestic politics that are influencing this new opening chapter in Iran’s relations with the outside world. At the core of these internal dynamics lies an intense rivalry between two main factions of Iranian politics. Iran’s hard line faction, which is composed of several cadres of hardliners with differing ideological positions. They mainly seek the continuation of the status quo in Iran’s foreign policy. For them, the status quo means a de-facto alliance with Russia and China that includes continuation of frosty relations with the United States and keeps Iran largely on the margins of the global economy. The continuation of the status quo also serves and secures their financial interests as key figures in the hardline camp benefit handsomely from Iran’s tightly closed economy; an economy that remains detached from the international trade system.

By contrast, the moderate faction, which is comprised of moderate conservatives, pragmatists, and reformists, mostly favor a tension-free foreign policy and improved relations with the West, the United States in particular. For this faction, Iran’s fortunes lie with a dynamic integration of its economy with that of the global system, and that the revival of the country’s infrastructure is possible through Western investment and technology. This faction also believes that Iran’s close trade ties with China and Russia over the years have failed to produce positive results for average Iranians and the Iranian economy, which in some sectors bears characteristics of a basket case economy.

This inter-factional rivalry is unfolding in the backdrop of the failure of the clergy in redefining a state ideology commensurate with Iran’s new social dynamics that is the result of a generational shift and the impact that this generational shift is having on Iranians’ outlook on and approach to socio-political and cultural issues.

In their struggle to shift the direction of Iran’s foreign policy in the face of pushbacks from hardliners, the moderate faction behind President Rouhani enjoys the support of some key high-ranking generals in the Iranian Revolutionary Guards Corps (IRGC), who exert enormous influence on Iran’s economy, its foreign policy, and the ongoing nuclear negotiations. The same key high-ranking generals in the IRGC stand behind Rouhani’s efforts to bring Iran’s nuclear dossier to a peaceful closure and open up the country’s economy to badly-needed foreign investment.

Since the Ukrainian crisis, the inter-factional rivalry has manifested itself in a new light as those hardliners sympathetic to Russia have openly called for Iran to take side in the crisis against the West. At one point this rivalry intensified so much so that some IRGC officers demanded that they hold joint military exercises in the Black Sea with the Russian navy. They were pushed back by their more moderate opponents and eventually dropped their demand for joint naval war games.

Recently, the scope of the inter-factional rivalry has widened to include Iran’s Ministry of Petroleum as the Ministry has made reforms and reviewed energy contracts with some foreign oil companies. The reforms have resulted in cancellation of some key contracts with Chinese companies, including the giant China National Petroleum Corporation (CNPC) for their inefficiency and incompetence in carrying out large energy projects. Echoing the crisis in Ukraine and its impact on Europe’s energy needs, the Ministry of Petroleum expressed Iran’s readiness to supply Europe with natural gas as an alternative to Russian gas. The move by the Ministry raised the ire of hardline opponents of Rouhani, some of whom openly called for supporting Russia in the crisis.

Iranian hardliners draw angry accusations against Rouhani and his administration as overstepping their bounds in dealing with Western powers. To weaken their moderate opponents, hardliners have used a tool at their disposal quite effectively: the judiciary. To slow Rouhani’s pace of foreign policy engagements by tarnishing his administration at home, the judiciary, under Ayatollah Sadegh Larijani, has gone on an execution and hanging binge. Since the Rouhani administration took office in August 2013, there has been a sharp spike in the number of executions by the judiciary with the estimated total number standing at a whopping 600.

As a result, the Rouhani administration has been widely criticized both at home and abroad for its inability to curb the pace of executions by the judiciary. Criticisms have also targeted his administration’s failure to remove online restrictions on social media channels despite repeated promises both during election campaigns and after. Iran’s telecom infrastructure is clogged by a whole range of filtering technologies and remains severely under-invested, leaving millions of tech-savvy Iranians craving for a modern broadband and high-speed communication infrastructure.

Going forward, arriving at a comprehensive agreement with the West over Tehran’s nuclear program will usher in the next chapter in Rouhani presidency and set in motion the region’s new geopolitical dynamics. How hardliners aligned with Russia and China act in this new chapter could be a turning point for Iran and the region.