The conflict between Iranian President Hassan Rouhani and the Iranian Revolutionary Guards (IRGC) is a microcosm of the power struggle between the two competing camps within Iran: the moderates/reformists and the conservatives. The formation of the struggle dates back to the 1987 election of Iran’s first reformist president, Mohammad Khatami, and the emergence of the reform movement.
A few months after the election of Hassan Rouhani in 2013, an unexpected and extraordinary event occurred in Iran. Having realised the threat posed by the sanctions on the system, Iran’s leader, Ayatollah Ali Khamenei, who opposed talks with the Americans for more than two decades, changed his stance by introducing the concept of “heroic flexibility” in diplomacy. The move opened the path to the formation of bilateral talks between the Iranian foreign minister, Mohammad Javad Zarif, and his American counterpart, John Kerry.
This development brought the infighting between the centrist Rouhani — who has metamorphosed into a reformist — and the conservatives to the public consciousness. Ostensibly, the IRGC, as the most powerful and organised institution in the conservative camp, spearheaded the battle with the opposing camp, which Rouhani leads.
The culmination of the nuclear accord between Iran and the world’s six powers (the US, Russia, China, the UK, France, and Germany) escalated the conflict between Rouhani and the IRGC. Rouhani believed — and still believes — that the solution to all economic and even non-economic ills is linked to the flow of foreign investment into the country.
“The oppressive sanctions must be removed so that investment can come and the problems of the environment, employment, industry and drinkable water are resolved,” he remarked in 2015. For Rouhani to achieve this goal, it is imperative that Iran abandons its aggressive and revolutionary policies and give priority to diplomacy and interaction with the countries perceived as enemies.
Existential threat
The IRGC views this approach as an existential threat to the organisation for two reasons. First, as a result of a de-escalation with the West that could lead to détente with the US, the IRGC will lose its relevance. That is because the philosophy behind its existence is shaped upon hostility against the western hemisphere led by the US, militarism (as opposed to diplomacy), and revolutionarism. A normalisation of relations with the western bloc could be tantamount to the end of the revolution. In such a scenario the revolutionary institutions led by the IRGC would lose their relevance or their importance, to say the least.
Second, the IRGC and its subsidiaries are the country’s largest economic powerhouses and dominate key sectors such as oil and gas, power generation, transportation, construction, telecommunication, media, mining, electronics, the car industry, banking, and shipping, among others.
For example, one of the companies owned by the IRGC is Khatam Al Anbia, a construction company primarily involved in gas and oil mega project. The company boasts 40,000 employees and an estimated annual turnover of $12 billion (Dh44 billion). The chief director of the company, General Abdullah Abdullahi, recently announced that the government owes the company $6 billion.
In 2009, a consortium of three investment companies, two of them owned by the IRGC, teamed up to participate in the largest deal in the history of the country’s stock exchange in a bid to own a controlling stake in Telecommunication Co of Iran. The partners won the stake for $7.8 billion, Iran’s largest privatisation ever.
It is obvious that if the country’s doors are opened to the foreign companies, the companies could seriously undermine the IRGC’s dominant position in Iran’s economy.
Why has the conflict intensified? A recent statement Rouhani made caused an uproar among the IRGC and its supporters. Clearly referring to the IRGC, Rouhani remarked, “Part of the economy was in the control of a government without guns. [During Ahmadinejad’s tenure] we gave it to the government with guns. This is not economy. This is not privatisation.”
Overwhelming response
The IRGC’s reaction was overwhelming. The recent issues of the weekly Sobhe Sadeq, the political organ of the IRGC, are filled with assaults on Rouhani and his administration. In an editorial in its July 10 issue, “the incumbent administration,” and a number of newspapers supported by it, were accused of having possible connections with “foreign enemies.” The article requested that “all the security and the intelligence systems... enter the case and investigate the matter.”
Another reason for the intensification of the conflict between Rouhani and the IRGC is the early July signing of a 20-year contract between the Iranian government and French energy giant Total to develop Iran’s South Pars gasfield. Total will invest an initial $1 billion for the first stage of the project and take a 50.1 per cent interest. Its investment will eventually reach $5 billion. The Chinese will own 30 per cent, and Iran’s Petropars 19.9 per cent. The contract is the first deal of its kind since the culmination of the nuclear deal between Iran and the world’s six powers.
The project, reaching into an area where the IRGC is heavily active, rang alarm bells. If other foreign companies follow Total, over time there would be less space for the IRGC in the oil and gas industry, Iran’s largest economic sector. The IRGC fiercely opposed the nuclear accord, which led to the lifting of sanctions against Iran in exchange for a sizing down of the country’s nuclear activities. After the nuclear deal was sealed, Major-General Mohammad Ali Jafari, the commander of the IRGC, said, “The nuclear deal is by no means an honourable document for the Iranian people. People accepted it reluctantly.”
Commenting on Total’s contract, General Abdullahi said, “While we have the capability of handling such projects we should never damage our dignity by accepting to work as sub-contractors [of Total].” He criticised Rouhani’s comments, in which Rouhani alluded to the IRGC as “the government with guns. He added: “We are not competing with the private sector... While the banks offer 20 per cent interest on your money, private sector companies are not able to handle projects with 7 to 10 per cent profit margin.”
Should this trend continue it is likely that the factional infighting will escalate even further leading to unforeseen consequences.
Cyrus Namjoo Moghadam is a freelance writer.
