Given the economic significance of Chabahar port, if the conservatives win in Iran, it could complicate and even jeopardise India’s financial transactions and technology imports from the world Photograph: (Others)
The outcome of the election is going to have a huge impact on regional power dynamics and international engagement with Iran in the future
As 56 million Iranian’s prepare to cast their ballots they face a critical choice i.e. to go for a more reformed globally engaged Iran or to go back into isolation. The choice of voters is also going to have a bearing on what sort of foreign policy is expected out of Tehran. The elections come at a very complex time for Iranian leadership as they face both domestic as well as external challenges.
While the conservatives are highlighting the western non-action post the signing of the deal, the current Rouhani government has been trying hard to sell the economic benefits of the nuclear agreement with the permanent members of UN Security Council (P5+1). President Rouhani has succeeded in bringing Iran out of the isolation that it was under conservative President Ahmadinejad. The success of his approach can be displayed from the fact that Iran is at present one of the major regional players and party to solutions with respect to the situation in Syria and Yemen. The ideological support provided by Iran to the regime in Syria and Houthi rebels in Yemen has made their position indispensable at the regional power table.
The ideological support provided by Iran to the regime in Syria and Houthi rebels in Yemen has made their position indispensable at the regional power table
At the time of lifting of sanctions, Iran economy was reeling under pressure and needed doses of investment as well as access to international markets and financial institutions. Under the nuclear deal, over 90 per cent of nuclear-related sanctions were lifted. Among the most important sanctions lifted were secondary sanctions on the Central Bank and Iran’s commercial banks, on selling and investing in oil as well as gas projects, on transportation including shipping lines and commercial aviation industry. The economy of Iran is now growing, and the regime has struck major deals with western companies in oil and gas sector as well as aviation sector, while its integration to the international financial system was restored on the day deal came into force.
The IMF’s outlook had predicted GDP growth of 6.6 per cent in 2016-17 due to an increase in oil production, after facing a contraction of 2 per cent in 2015-16. Following the nuclear deal, Iran is now seeking investment in different sectors. On the other hand, these deals have made countries and companies think of resuming their commercial ties with Iran. But the elections are seen as a referendum on how President Rouhani has performed in the economic front after the nuclear agreement was signed.
Rouhani has steadied the Iranian economy and brought down inflation but unemployment is high and his opponents have questioned whether his administration has done enough to bring noticeable economic benefits. However, the uncertainty created by the election of President Trump and his comments on the nuclear deal has raised concerns about the future. In addition, the defeat of President Rouhani would deal a blow to the country’s reformists and bring hardliners back in power. Rouhani’s main challenger is the influential hardline politician Ebrahim Raisi, who has been touted as a frontrunner to succeed Supreme Leader Khamenei.
If the conservatives win, it will be a blow to Indian interests in Chabahar port project, which has been languishing for years
The outcome of the election is going to have a huge impact on regional power dynamics and how countries engage with Iran in the future. Though Iran is likely to continue with its pragmatic policy towards the US and the West in general, a conservative government would alienate Russia and give the US, Saudi Arabia and Israel more reason to push back against Iran's strategy in Iraq, Syria and the Gulf region. Therefore, these elections are hugely significant in shaping Tehran’s foreign and domestic policy.
Iran’s election is also going to have a bearing on how India deals with the new government. If the conservatives win, it will be a blow to Indian interests in Chabahar port project, which has been languishing for years mostly due to various economic sanctions on Iran. Indian firms are still sceptical about investing or dealing with Iranian enterprises. Given the economic significance of Chabahar port, the elections could complicate and even jeopardise India’s financial transactions and technology imports from the world, wherein countries like Japan and South Korea are expected to chip in. Chabahar has emerged as a pivotal node in India’s outreach to its extended neighbourhood, particularly its Look West policy. India envisions to reach out to the Persian Gulf and Central Asia through the trade corridors.
As much as Iranians, for political and economic reasons, the world population from Tokyo to Washington DC is waiting with baited breath for the result.