Iran: The Riddle of Raisi

Iran has a new president, consolidating the hardliners’ control over the centres of power. What will he do about the country’s numerous crises? One answer is clear: the 2015 nuclear deal’s fate remains the most pressing issue for Tehran and its foreign interlocutors.

What’s new? Ebrahim Raisi has assumed Iran’s presidency after an election marked by mass disqualification of potential rivals and historically low voter turnout. Conservatives and hardliners now control all the Islamic Republic’s power centres.

Why does it matter? Raisi takes office at a moment of growing, intersecting crises for Iran, with the supreme leader’s succession looming. Domestic challenges, including political disillusionment, economic stagnation and the COVID-19 epidemic, are particularly acute. The fate of the 2015 nuclear pact and Gulf geopolitics also hang in the balance.

What should be done? The nuclear deal’s future overshadows all else, given its implications for Iran’s economy and foreign relations. Restoring the deal in full remains the best option for Tehran, Washington and other parties. Failing that, freezing the escalatory cycle to buy time to negotiate a more-for-more arrangement would be the best alternative.
Executive Summary

Ebrahim Raisi had no serious rival in Iran’s June 2021 presidential election, but his tenure in office will not be so easy. With Raisi’s inauguration on 5 August, Iran’s hardliners have consolidated their control of every centre of authority, elected and unelected, in the Islamic Republic. But they face myriad crises, ranging from economic stagnation and social unrest to the raging COVID-19 pandemic. Meanwhile, Supreme Leader Ali Khamenei is ageing and his successor as yet unchosen. Looming over it all are the negotiations over reviving the 2015 nuclear deal, the Joint Comprehensive Plan of Action (JCPOA). The hardliners should have the institutional support they need to restore the agreement, from which the U.S. withdrew in 2018. But they could be tempted to overreach, thus precipitating the deal’s collapse. If the JCPOA falls apart, the new Iranian administration – like the U.S. – should eschew escalation so that the two sides can instead negotiate a better-for-better successor accord.

Though every Iranian presidential election is closed to all but a handpicked few, the 2021 race was exceptionally uncompetitive, with a degree of voter alienation to match. Less than half of Iran’s electorate cast their votes – an unprecedented low – and those who did submitted more spoiled ballots than endorsements of any candidate save the winner. For the country’s leadership, it was seemingly imperative to preordain the outcome, even at the cost of undermining whatever faith Iranians have in the Islamic Republic’s already limited participatory processes. The supreme leader’s office and the military-cum-security apparatus clearly want a likeminded president in place for the next four years, as they expect pressing questions regarding Ayatollah Khamenei’s succession and the ruling system’s long-term viability to come to the fore.

After the JCPOA talks, Raisi’s major challenge will be Iran’s economy, embattled by U.S. sanctions as well as corruption, mismanagement and, lately, the coronavirus. The economy may survive even when trade is curtailed, which sanctions have certainly done, but it cannot thrive. Even substantial sanctions relief pursuant to progress in the JCPOA talks will not rehabilitate the economy as long as the government fails to institute long-overdue reforms. Yet Raisi, a product of Iran’s judicial system, comes into the job with little executive experience, and his vision for domestic and external affairs is vague. If the hardliners have plans to address the deep-seated economic maladies, their tightened grip on power should make it easier to carry them out. If they do not, trouble lies ahead. Relying on coercion and catering exclusively to the 30 per cent of Iranians who voted for Raisi – the system’s core constituency – rather than considering the needs of the 70 per cent who did not could lead to growing domestic turmoil.

Foreign policy did not feature prominently in the election, and Raisi’s direct influence on national security decisions will be checked by power centres outside the presidency, as in the past. Yet the president and his appointees play a key role in conducting negotiations and representing Iran on the world stage. In 2013, it was the transition from President Mahmoud Ahmadinejad to the more pragmatic Hassan Rouhani that put in place the conditions yielding the JCPOA. Since April, six rounds of talks in Vienna have put the deal’s revival within reach. But it is an open question as to whether the new government can push those negotiations to fruition or will squander the opportunity it has been handed.

The U.S. and the deal’s remaining parties (the UK, France, Germany, Russia and China) have signalled their willingness to see these discussions through to conclusion, even as Raisi’s human rights record makes him a less than ideal interlocutor from Western perspectives. Restoring the nuclear deal should remain the objective. But if negotiations falter, a less-for-less arrangement, or JCPOA-minus, capping Iran’s continued nuclear progress in return for limited sanctions relief, may be a necessary interim solution. Settling for a JCPOA-minus could prevent an escalatory spiral and create time and diplomatic space to move toward a JCPOA-plus arrangement, expanding the original agreement’s nuclear and verification provisions in return for more significant U.S. sanctions relief – a better-for-better agreement that both sides seek. If negotiations fail, precedent teaches that reciprocal escalatory steps are likely and that renegotiating a deal or negotiating a new one will last a long time. With the Middle East still in tumult, that outcome would spell serious problems and must be avoided.

As he takes office, Raisi faces a stark choice: banking on repression to maintain control in the face of rising domestic challenges, or addressing the roots of Iran’s problems through reform and de-escalation with the West. That choice will likely have monumental repercussions for Iran and the region.

Tehran/Washington/Brussels, 5 August 2021
I. Introduction

Ebrahim Raisi, a product of Iran’s judicial system and protégé of the Islamic Republic’s supreme leader, Ayatollah Ali Khamenei, takes over the executive branch at a time of deep uncertainty. Marked by a reputation for repression and with little experience in governance, Iran’s eighth president will need to address mounting challenges at home and on the world stage. But if the scale of his task is clear, how he intends to address it is far less so.

The June 2021 election that handed Raisi the presidency was primarily of domestic significance. Ayatollah Khamenei is 82; Raisi’s presidency may be the last he oversees as supreme leader. Should he die or step down, a once-in-a-generation contest for the country’s ultimate authority will loom. The conservative consolidation completed with Raisi’s election could lay the groundwork for Khamenei’s succession, while more immediately ensuring alignment of ideological outlook across the centres of power in tackling the manifold internal challenges the country faces.

But Raisi’s election will also have foreign policy implications. At one level, the outcome does not portend a sea change in how Iran formulates and acts upon its interests abroad; it is the supreme leader who makes strategic decisions about foreign policy, albeit informed by the views of other key stakeholders, including the president. Still, it will be Raisi who carries out those decisions, including by taking the helm of negotiations to reinvigorate the 2015 Joint Comprehensive Plan of Action (JCPOA), otherwise known as the nuclear deal, which were adjourned in June pending his inauguration.
” U.S. President Joe Biden pledged to seek re-entry into the JCPOA, but indirect talks in Vienna have not yet produced agreement “

The stakes could hardly be higher. The future of that deal – which will not just define Iran’s foreign policy trajectory but also have profound implications for its sputtering economy – very much hangs in the balance. After the Obama administration played a leading role in negotiating the deal, under which Iran’s nuclear program was restricted and subjected to international monitoring in exchange for sanctions relief, the successor Trump administration pulled the U.S. out and launched a “maximum pressure” campaign of sanctions, threats and coercive diplomacy to try to force Iran back to the table to negotiate a better deal. Current U.S. President Joe Biden pledged to seek re-entry into the JCPOA, but indirect talks in Vienna have not yet produced agreement. In the meantime, U.S. sanctions continue to bite in Iran, and Tehran’s own violations of the 2015 deal have increased its know-how and capabilities, and significantly eroded the amount of time it would need to produce the fissile material for a nuclear weapon.

This report assesses the ramifications of Raisi’s presidency for domestic and foreign policy. It is based on more than three dozen interviews conducted with Iranian, European, U.S. and UN officials, as well as experts and activists inside Iran. It draws on years of prior research, analysis and reporting on Iranian political dynamics and JCPOA negotiations.

II. A Virtual Race of One
A. An Anointed Candidate

By the Islamic Republic’s own standards, its thirteenth presidential election was unusual. Previously, potential candidates had positioned themselves to run months prior to the poll. In 2021, the field remained almost empty until late April. Turnout was historically low, attesting to popular frustration and indifference.
With few choices on the ballot, which authorities packed with hardliners or token moderates, the electorate hardly seemed energised to vote. But the lacklustre mood also appeared to have deeper roots: the state’s brutal crackdown on protesters who had taken to the streets, largely due to pocketbook grievances, in 2017 and 2019; systemic ineptitude demonstrated by the mistaken downing of a passenger jet in 2020; economic malaise; and mismanagement of the COVID-19 pandemic. These factors likely contributed to a loss of hope among the electorate in bringing about real change through balloting. That campaigning largely moved to social media platforms like Clubhouse because of COVID-19 restrictions, denying voters the opportunity to hear from candidates at large public gatherings, hardly helped.

The leadership also circumscribed the candidate selection process more than usual. Their efforts began even before formal registration opened on 11 May. A month earlier, Ayatollah Khamenei advised Hassan Khomeini, grandson of the Islamic Republic’s founder and a popular figure among reform-minded Iranians, against running for the presidency.
The candidacy of Foreign Minister Javad Zarif, whom reformists were counting on to mobilise their base, became moot when the media obtained a taped interview in which he criticised the Islamic Revolutionary Guard Corps (IRGC) for sidelining the country’s diplomatic apparatus. Then on 5 May, the Guardian Council, the twelve-member body of jurists and clerics closely aligned with Ayatollah Khamenei that is in charge of vetting candidates, announced a new set of criteria for the hopefuls, including an age range of 40 to 75, four years of executive managerial experience and, at minimum, a master’s degree.

” Of the 592 candidates who threw their hats into the ring, only seven men met with the Guardian Council’s approval “

Of the 592 candidates who threw their hats into the ring, only seven men met with the Guardian Council’s approval.
But what shocked Iranians – the elite and general public in equal measure – was the sweeping character of the disqualifications, which went beyond weeding out the system’s critics and even the loyal opposition to bar consummate insiders. The Council rejected the candidacy of, inter alia, Ali Larijani, the longest-serving former speaker of parliament, adviser to the supreme leader and lead negotiator of Iran’s strategic partnership with China, as well as Vice President Eshagh Jahangiri, who had been a heartbeat away from the presidency for eight years under Raisi’s predecessor, Hassan Rouhani.

Mahmoud Ahmadinejad, a two-term president who was disqualified in 2017, was barred once again, as were all prominent moderates and reformists.

Criticism of the Council’s decisions brought the Islamic Republic’s internal contradictions to the fore. Larijani’s brother, Sadeq, who is one of the Guardian Council’s clerics and heads the Expediency Council, which advises the supreme leader and arbitrates differences between the parliament and the Guardian Council over draft legislation, lambasted the disqualifications as “indefensible”, saying the “security apparatus” had meddled in the vetting.
Hassan Khomeini condemned as “counter-revolutionary” what he deemed acts undermining the system’s republican institutions, advising the approved candidates to drop out of the race. Even Raisi himself appeared embarrassed, stating that he was asking the authorities to reconsider their decisions. But Ayatollah Khamenei’s subsequent defence of the Guardian Council’s choices put an end to any prospect of reversal.

The Guardian Council thus deeply skewed a field in which none of the approved candidates posed a serious threat to Raisi, who had lost to Rouhani in 2017.
Others in the 2021 race included Saeed Jalili, a hardline former national security adviser and chief nuclear negotiator, who eventually dropped out in Raisi’s favour; and Alireza Zakani, a firebrand parliamentarian, who withdrew as well. Two other hardliners stayed in the contest: Mohsen Rezai, former commander-in-chief of the IRGC, mounting his fourth presidential bid; and Amir-Hossein Ghazizadeh, an ultra-conservative member of parliament. Abdolnaser Hemmati, a low-profile technocrat and former head of Iran’s Central Bank, was the only centrist in the race, but having presided over a major economic downturn in the past few years, caused by U.S. sanctions and the Rouhani administration’s mismanagement, he faced an uphill battle.

Mohsen Mehralizadeh, a former governor of Isfahan and the lone reformist, completed the field of seven candidates.

With all the key reformist candidates barred, the Reform Front, a consensus-building body established by reformist leaders under the guidance of former President Mohammad Khatami for the 2021 election, faced a dilemma: endorsing a non-reformist, referred to in their lexicon as a “rental candidate”, or boycotting the elections.
It ended up neither backing any candidate, nor boycotting the election – a stance that satisfied few if any and instead caused internal fissures. A breakaway faction threw its support behind Hemmati a few days before the contest and convinced Mehralizadeh to withdraw in his favour. It was too little, too late.

The result was a cleared field, in which Raisi’s victory was all but assured. Maintaining a commanding lead in all surveys before the 18 June election, Raisi won with 18,021,945 or nearly 62 per cent of the votes.
B. Low Turnout, High Stakes

Given the Guardian Council’s aggressive vetting and the resulting non-competitive field, the low turnout was hardly a surprise.
The backlash to the disqualifications made strange bedfellows of those who advocated for boycotting the election: from the late Shah’s son in exile, Reza Pahlavi, to Faezeh Hashemi Rafsanjani, a prominent women’s rights activist and the daughter of one of the Islamic Republic’s founding fathers, to her late father’s nemesis, former President Ahmadinejad. Surveys had predicted a relatively low participation rate, fluctuating between 36 and 44 per cent. The final official rate, 48.8 per cent, marked the lowest level of participation in Iran’s presidential elections since the 1979 revolution.

Only 26 per cent of eligible voters in the capital, Tehran, cast ballots.

The poor turnout is even more striking in that the presidential contest happened in parallel with three other elections: local council races, parliamentary mid-terms and a vote to fill six empty seats in the Assembly of Experts, the body nominally in charge of selecting the next supreme leader. Without these concurrent elections, turnout in the presidential race could have been even lower.
Equally significant was the jump in void ballots, which tripled from around 1.2 million in 2013 and 2017 (3.4 and 2.9 per cent of votes cast) to close to 4 million (13 per cent) in 2021, probably indicating a protest vote.

Before the poll, Ayatollah Khamenei insisted that high turnout would be critical, but afterward he glossed over the low numbers, contending that had it not been for the pandemic, the rate would have been around 60 per cent. He went on to characterise the turnout as “epic” in the face of what he claimed was discouragement from Iran’s adversaries.

” The political establishment seemed more concerned with highlighting the election’s outcome than explaining away the [low] turnout “

Rhetoric aside, the political establishment seemed more concerned with highlighting the election’s outcome than explaining away the turnout. In a former senior Iranian official’s words, “the supreme leader has realised that everyone forgets about the turnout in four weeks, but the system has to live with the election results for at least four years”.

If the leadership in Tehran decided to undermine a pillar of its own legitimacy, it did so because the stakes in the 2021 election were particularly high. With the 82-year-old Ayatollah Khamenei’s succession looming, and the country facing myriad external and internal challenges, the Islamic Republic is nearing a critical juncture. The exact motivations of the supreme leader’s office and the security-cum-military establishment are a subject of conjecture, but an adviser to the supreme leader’s office highlighted the most important element in the calculus:

Our system cannot survive without its core constituents, which in our case are the deprived and the destitute. The economic malaise of the past few years and endemic corruption have disaffected a large part of our base. We need to rectify this problem above all else, even if it necessitates minority rule for some time. Our stability depends on the depth of our support.

Having a loyal ally as president is a way to ensure that the government’s priorities and the system’s requirements are the same. In the same vein, Iran’s rulers may have concluded that at this time the country cannot afford a divided political order, in which unelected tutelary institutions are at daggers drawn with elected bodies, even if that means weakening the participatory instruments through which that order claims a popular mandate.

In the words of Ghazizadeh Hashemi, one of the presidential candidates:

The country needs to set aside infighting for at least ten years in order to get back on its feet. … After that period, existing and functioning democratic institutions or political factions can revive themselves and return to power.

The supreme leader may have other motives. Speculation has also been rife that elevating Raisi to the presidency is a means of grooming him for the top job, in the same way that then-President Khamenei was prepared to succeed Ayatollah Ruhollah Khomeini after his death in 1989.
Another possibility is that the system is seeking structural transformations that would reduce internal friction and usher in greater stability. A decade ago, Ayatollah Khamenei opined that there would be “no problem” in adopting a parliamentary system, giving the people’s representatives the power to elect a prime minister, and scrapping the presidency. On 3 June, in a televised speech, he suggested going even further, stating: “There may come a time in the future when elections become meaningless, as there may be other forms of public presence and expression”.

III. Domestic Implications

While Raisi’s victory was all but certain, its implications for Iran’s internal dynamics are anything but. The new president remains somewhat of a mystery when it comes to policy, not so much because he conceals his beliefs as because they are strikingly abstract. His campaign rhetoric was dominated by generalities about economic justice, fighting corruption, Islamic principles and revolutionary values. He takes office at a time when Iran is facing major crises – none of which has an easy or immediate solution – on several, often intersecting fronts. It is far from clear how he plans to address any of the country’s challenges.

The World Bank estimates that after significant economic contraction in 2018 and 2019, Iran’s GDP re-entered positive territory in 2020 and will grow by 2.1 per cent in 2021.
But serious problems persist as the COVID-19 pandemic compounds the effects of domestic mismanagement and foreign sanctions. Nearly one quarter of young Iranians are out of work, annual inflation exceeds 40 per cent and the currency’s value is volatile. While $1 was worth around 40,000 rials when Rouhani began his second term in 2017, it is now closer to 250,000. Meanwhile, the intergovernmental Financial Action Task Force has blacklisted the country for failing to adopt financial transparency measures. Polling underscores that concerns about financial well-being – inflation, job opportunities, falling income – weigh heavily on the Iranian public.

Other anxieties also abound. The pandemic’s human toll continues to mount, having reached – according to official numbers – over 90,000 dead since February 2020, with a fifth wave of infections raging and fewer than 2.5 million citizens fully vaccinated as of late July.
Water and electricity supplies are erratic or near-absent, as the country’s infrastructure creaks under natural and human-made pressures, sparking protests that the government attempts to violently suppress. Meanwhile, key industries contend with worker discontent over salaries and benefits. A spate of attacks on Iran’s nuclear facilities, infrastructure and experts has prompted warnings from intelligence veterans about infiltration by adversaries into sensitive sectors.

Raisi faces these challenges with almost no executive expertise to draw from, having spent most of his career in the judicial realm.
During the post-election transition, he vowed to adopt a non-partisan, expertise-based approach to tackling the country’s problems. In theory, he may have latitude to make good on this promise: the greater control hardliners gained over the instruments of power affords him more space than his predecessors to pursue reforms if he chooses. Mustafa Tajzadeh, a reformist dissident who was barred from running in the presidential race, noted: “Never before have we had a situation in which every head of elected and unelected institutions in our system is or has been an Ayatollah Khamenei appointee”.

But in practice, Raisi could well face obstacles in pursuing his agenda. If past is prelude, Iran’s fratricidal politics will splinter the hardline camp. In the words of Amir Mohebian, a prominent conservative strategist, “Iran will never become a one-party state, as no political faction can establish full hegemony. They are not organised to coordinate policy positions or messaging, and they lack the kind of leaders who could hold them together”.

” The question is which policies Raisi will put in place while he still benefits from unified hardline control “

The question is which policies Raisi will put in place while he still benefits from unified hardline control. Some insiders point hopefully to urgent and long-overdue structural economic changes that more moderate presidents who did not enjoy the supreme leader’s trust could not pursue.
Some of his advisers have encouraged this speculation, and Raisi himself has set ambitious targets on issues like job creation, housing and inflation – although thus far the proposed solutions he has floated are as nebulous as the scale is daunting. One of his economic advisers posited: “We need major economic surgery to stem waste [eg, corruption and tax evasion] and ten additional long-term trade deals like the one we have with China”.

As for whether socio-political reforms will feature among the new government’s priorities, observers are hardly optimistic.
Many fear they will see movement in the opposite direction: more curbs on social freedoms, further state intervention in the domestic sphere and brutal crackdowns on any form of dissent. The hardliner-dominated parliament has already triggered efforts – which the Rouhani administration pushed back against – to restrict internet access and constrain social media platforms.

Civil society activists also perceive the appointment of Gholamhossein Mohseni Ejehi, Raisi’s former deputy, as the new chief justice as a bad omen, given his history of heavy-handed rulings. A prominent human rights activist said:

The combination of Raisi, a man with a long track record of repression in the judicial system, and Ejehi, who has a similar record in the judicial and security apparatus, at the helm of two branches of Iran’s government is a warning sign that human rights abuse could get worse.

An iron-fist approach could unleash new mass protests. After years of sanctions and economic mismanagement, underemployed and disgruntled Iranians may feel they have less to lose in challenging the system, meaning that more of them may be willing to resort to violence.

The sense of grievance and potential for volatility is especially concerning in Iran’s border provinces, where the majority of the country’s ethnic minorities reside – including Kurds in the west, Azeris in the north east, Arabs in the south west and Balochis in the south east. Impoverished and underdeveloped, subject to systemic discrimination and suffering severe environmental degradation, these areas have often given rise to what a sociologist calls “a silent tsunami” of popular resentment.

If it fails to address the drivers of local grievances head on, the Raisi administration will only be buying time until the next – likely violent – standoff between state and citizenry.
IV. Foreign Policy Implications

Foreign policy rarely featured in Raisi’s campaign.
Yet his style and profile will affect Iran’s relations with the outside world, and what happens in those relations could well determine his presidency’s fate. His own background will not make negotiations easier. Raisi’s notoriety as a member of the “death committee” that oversaw the execution of thousands of political prisoners in mid-1988 could, at a minimum, increase the political cost for Western governments of engaging his administration and, at worst, harden the viewpoint that the Islamic Republic itself is beyond redemption and impervious to diplomacy.

Moreover, unlike his predecessor, who had decades of experience in Iran’s national security discussions, Raisi is a diplomatic neophyte; his appointments to key advisory and foreign policy positions will be particularly important as an indicator of his priorities and inclinations.

Still, while Iran’s emergent approach to foreign affairs will involve new personnel and a change in tone and tactics, its bottom-line positions – on its nuclear program, regional interests and defence policy – almost certainly will not change.
Outgunned by its regional adversaries and the U.S., Iran seeks to compensate for its relative conventional military weakness and sense of encirclement by achieving self-sufficiency in asymmetric military capabilities and increasing its strategic depth. Tehran has invested heavily in its ballistic missile program to deter and protect itself from external threats. It has built a network of partners and proxies for the same reasons.

Any adjustment in Iran’s calculus will be a function of changes in the regional balance of power or its threat perception, not a particular presidential transition.
A. The Nuclear Standoff

No issue on Iran’s foreign policy agenda is more consequential than the fate of the 2015 nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), the fate of which increasingly hangs in the balance.

Although the Biden administration and the Iranian government agreed in principle on the need to revive the accord, from which President Donald Trump withdrew the U.S. in 2018, it took nearly three months after the January 2021 U.S. presidential transition for negotiations to get under way toward that shared objective.
In Washington, the new team engaged in internal deliberations as well as consultations with allies on how to proceed before embarking on any major moves, while Secretary of State Antony Blinken maintained “the first step would be Iran returning to compliance”. Tehran similarly put the onus of the first concession on the U.S., with the supreme leader setting a row of red lines: “If [the U.S.] wants Iran to return to its commitments, it must lift all sanctions in practice, then we will do verification … then we will return to our commitments”.

When the European Union (EU) on 18 February proposed bringing all the parties together for an “informal meeting”, Tehran cited the lack of tangible concessions from Washington in saying no.
With a sense of deadlock creeping in, both sides began to consider suggestions for an opening gesture to build momentum, but by late March the alternative option of bypassing incremental measures in favour of discussions on the deal’s restoration in toto gained traction. The talks, facilitated by the EU and with only indirect discussions between the Iranian and U.S. teams through the deal’s European, Russian and Chinese participants, started in Vienna on 6 April and established two expert-level working groups: one tackling nuclear issues, the other addressing sanctions. A third group tasked with sequencing was set up two weeks later.

But as the discussions engaged the minute specifics of what steps each side would take, significant and stubborn gaps remained.
The U.S. approached the negotiations in the sanctions group having categorised its existing designations in three buckets: those it was considering lifting (the “green bucket”); those that were up for discussion (the “yellow bucket”); and those that were not (the “red bucket”). While Iranians were encouraged by the initial offer, which would have unshackled key sectors of Iran’s economy, in practice, Tehran seems to have sought to pocket the green and yellow lists while pursuing concessions regarding the red one. The nuclear group’s discussions likewise proved contentious, with the Western delegations frustrated by what they viewed as vague or noncommittal Iranian responses on key concerns like advanced centrifuges, Tehran’s deepening of its JCPOA breaches while the talks were under way, and increasingly fraught relations with the International Atomic Energy Agency (IAEA).

Moreover, Iran and the U.S. each pressed for a text that included commitments that were not, strictly speaking, within the JCPOA’s original framework.
Washington wanted an explicit Iranian pledge to engage in follow-on negotiations toward a “stronger and longer” deal that would potentially encompass Iran’s regional power projection. Tehran – after its experience with the Trump administration – sought assurances that the U.S. would not pull out of the JCPOA a second time or continuously undermine it by imposing new sanctions.

Notwithstanding these challenges, a text was emerging on 20 June when the delegates broke for consultations with their respective capitals, with the expectation that they would reconvene for a seventh round by the end of that month.
But as weeks passed, it became increasingly apparent that Tehran had decided that negotiations would not resume until the incoming Raisi administration could represent Iran at the negotiation table.

Rouhani had for several months intimated that forces within the Iranian system were cramping his room for manoeuvre. He lamented that “they took away the opportunity to reach an agreement from this government”, referring obliquely to legislation the Iranian parliament had enacted in December with Ayatollah Khamenei’s backing, mandating a significant escalation of Iran’s nuclear activities.
But while Iran’s nuclear steps certainly complicated the JCPOA’s revival, the key blockage – at least from Iran’s side – stemmed from lack of consensus in Tehran on whether what was on offer in Vienna would serve Iran’s interests and meet the supreme leader’s terms. Notably, Ayatollah Khamenei rejects the U.S. demand for a commitment on follow-on negotiations as a ruse of an untrustworthy interlocutor, which the outgoing Rouhani administration, in his estimation, was too eager to embrace.

” While Raisi expressed his commitment to the JCPOA … his foreign policy team comprises individuals who have a track record of strongly opposing it “

For his part, while Raisi expressed his commitment to the JCPOA during the campaign, his foreign policy team comprises individuals who have a track record of strongly opposing it.
In a 2018 interview, one of Raisi’s key foreign policy advisers, Ali Bagheri, who served as deputy nuclear negotiator under Ahmadinejad, provided clues as to the hardliners’ likely approach. Referring to the 2003-2005 nuclear talks between Iran and the E3 (France, Germany and the UK), Bagheri contended that the reason the Europeans did not abandon “their maximalist demands” and failed to reciprocate Iran’s suspension of uranium enrichment with economic incentives was not U.S. obstructionism, but their perception that Iran was in a position of weakness. By that logic, Iran’s tactic should be to demonstrate its strength rather than to make conciliatory gestures. He also defended Iran’s confrontational approach from 2006 to 2013, which led to a perilous race of sanctions vs. centrifuges – the UN Security Council and Western governments imposing the former in an attempt to stop Iran developing the latter – boasting that it gradually pushed the U.S. to retreat from its red lines and make offers more advantageous to Iran.

How the Raisi government proceeds is now arguably the key variable in the JCPOA negotiations. Raisi and his team could resume the Vienna negotiations, try to extract marginally better terms than were on offer at the conclusion of the sixth round, and secure an agreement that, while falling short of Tehran’s ideal terms, provides sufficient sanctions relief for the system to greenlight it. But with the hardliners ascendant, a brinksmanship gambit – whether by further nuclear provocations or increasing muscle-flexing in the region – could gain favour in Tehran as a means of securing wider concessions from the U.S., on the assumption that Iran’s leverage can be increased more quickly than the West’s capacity for additional financial pain or appetite for military action.

If the first option drags out, or Raisi prefers the second option, the JCPOA could collapse or become moot. The Biden administration’s position seems to be that, if Iran’s nuclear advancements pass the point at which the JCPOA’s constraints no longer suffice, it may reconsider its entire approach.
As Secretary Blinken noted, “At some point those advances will be such that returning to compliance with the nuclear agreement won’t solve the problem. … This can’t go on indefinitely”. Another key question linked to the JCPOA’s fate is that of dual-national U.S. and European detainees, whose release was to be part of a swap the U.S. and Iran were negotiating in Vienna in parallel to the nuclear talks.

Progress or lack thereof on one track would inevitably affect the other.

Restoring the JCPOA remains the Biden administration’s preference. But if in its view the JCPOA proves unworkable because the nuclear program is just too advanced for the restored deal to contain it, then the U.S. and its allies would likely feel they need to go back to the drawing board, and it is not yet clear what that would entail. The U.S. could work with its allies, particularly in Europe, to add coercive economic measures, while still seeking a more robust non-proliferation agreement with Tehran – what one official has likened to “the dual-track strategy of the past”.

The result could be something between the compliance-for-compliance proposal now on the table and the Trump-era idea of wholesale sanctions relief for a comprehensive shift in Iranian policies.
B. A China Model or a Hermit Kingdom?

How the new Iranian government approaches the JCPOA could also shed light on how it will tackle other files, notably regional relations and trade. In his first press conference after the elections, Raisi proclaimed: “Our foreign policy will not be limited to the nuclear deal. … We will have interaction with the world. We will not tie the Iranian people’s interests to the nuclear deal”.
But as with his domestic priorities, only the broad outlines of his approach toward the rest of the world can be discerned at this stage. He has said he wants to improve Iran’s ties with its neighbours, especially through an inclusive regional dialogue, but has given no indication of how Iran would address Saudi and Emirati concerns about Iran’s ballistic missiles and regional power projection, in particular. He has also indicated that he wants to further strengthen ties with Russia and China, whose leaders were the first two counterparts to congratulate him on his election, in line with Iran’s declared “look to the east” strategy.

Broadly speaking, the strategic choice facing the Islamic Republic is whether to seek stability at home and calm in its neighbourhood or a risky escalation over its nuclear program and turmoil in the region. As reformist Tajzadeh put it, “the supreme leader would have to choose between the China model of holding a tight grip on politics but opening up the country’s economy to the outside world through restoring the JCPOA, or moving down North Korea’s path of isolation”.
Opting for a de-escalatory path forward on both nuclear and non-nuclear issues would bring a sorely needed economic reprieve and help break the cycle of brinksmanship with Gulf rivals. That hardliners are responsible for negotiations with the U.S. and following through with commitments may actually make it easier for Iranian negotiators to reach and implement a deal. On the other hand, a confrontational path, be it through nuclear escalation, regional provocation or both, would carry major risk. Not only could Iran squander the slim diplomatic opportunities that have emerged from its recent moves toward rapprochement with some neighbours, notably Saudi Arabia, but it could also increase the possibility of accidental or deliberate conflict.

Tehran could try to chart a middle course. Iran’s conservatives trumpet the country’s self-reliance but few see North Korea as a model. Almost three quarters of Iran’s exports go to five countries, four of which are neighbours.
A Raisi government seems unlikely to put those links in jeopardy by courting regional conflict; more probably, it would work to deepen existing relationships while aspiring to diversify. Iran’s hardliners may not put great stock in chasing after Western contracts, particularly if they can up the country’s economic engagement with Russia and China. In any case, European companies will have only so much interest in doing business in Iran, not just if U.S. secondary sanctions remain in place but even if they are lifted or eased, particularly if Iran’s banking system remains out of line with international standards.

Thus, the Raisi government may hope to pursue security and economic engagement with Gulf rivals; deepen strategic ties with Moscow and Beijing; and shed lingering notions of rapprochement with the U.S. and Europe.

Whether it can achieve all that if the JCPOA unravels – particularly if Iran finds itself estranged from Russia and China as well over the nuclear issue and at odds with its Gulf neighbours, who are U.S. allies – remains a dubious proposition. More likely, tensions around the nuclear agreement and growing hostility between Washington and Tehran would spill over and limit Iran’s options for pursuing parallel strategies of escalation over the JCPOA and normalisation of trade and foreign relations.
V. A Way Forward

The impact of Iranian presidential transitions can be both downplayed and overstated. As head of the executive branch, Raisi will face the same structural limits that stymied his predecessors: he will be neither the decisive voice on matters of national security nor in full control of the government’s policies and purse strings. But the president’s office does set the domestic agenda, decide key appointments and set the tone in which the Islamic Republic speaks to the world.

Negotiating with Iran has rarely been easy, but Raisi raises especially uncomfortable dilemmas for Western powers. In the short run, at least, his presidency is likely to aggravate tensions between Tehran and the West, all the more so if he does not swiftly resume talks to restore the JCPOA and ploughs ahead with Iran’s nuclear development. His abysmal human rights record and the prospect of further crackdowns will give critics of negotiations more grounds for attacking nuclear talks or diplomatic engagement of Iran more broadly; indeed, such pressure is already evident.
But in the end, the alternative to talks is a path that almost inevitably leads to military confrontation.

Hoping for regime change any time soon seems futile. For all the internal disillusionment, the Islamic Republic has proven resilient. That it is consolidating power in the hands of hardliners with shrinking popular support and who are unlikely to address legitimate grievances could jeopardise the system’s survival in the medium term, if anger translates into organised opposition. But there is no sign of the Islamic Republic’s imminent collapse.

Besides, engagement with Iran does not mean indifference to human rights violations. How to address those abuses is a challenge, especially for Western governments hoping to deal with Iran over the nuclear file while viewing its domestic policies, particularly any brutal suppression of dissent, with concern. That said, this problem is hardly unique to Iran.
Nor should diplomacy and criticism be mutually exclusive: Tehran should not expect its participation in talks to earn it a pass on internal abuses, just as the importance of resolving the nuclear question requires U.S. and European governments to deal with an interlocutor whose other conduct they may find grating. At the same time, naming and shaming may not be a silver bullet, particularly against Iranian hardliners who see themselves as financially immune from sanctions and regard Western condemnation as a triviality, if not a badge of honour. Constructive methods, such as engaging with the breadth of Iranian civil society and ensuring that the Iranian people keep access to a wide spectrum of information, should complement coercive measures.

” Neither Washington nor Tehran appear overly dismayed at the impasse in talks “

For now, neither Washington nor Tehran appear overly dismayed at the impasse in talks, which is delaying concessions that would almost certainly prove unpopular with critics on both sides. Moreover, each side is fairly optimistic that if it continues with its present strategy it is likely to succeed over the long term. The U.S. sees the accumulated impact of its punitive measures, past, present and prospective, as a force that eventually will compel Iran to alter its stance in fundamental ways.
The Raisi administration is equally persuaded that, with time, Washington will have to make greater concessions as sanctions reach the point of diminishing returns and concerns peak over the nuclear program’s progress.

Yet the current stalemate in the nuclear talks is unsustainable. Absent progress in negotiations, Iran is unlikely to resolve an issue that has taxed its relations with the IAEA: the inconclusive investigation into four sites that Tehran had not disclosed and where the agency has found evidence of human-made uranium and other activities that Tehran has yet to satisfactorily explain.
If little moves between now and the IAEA’s mid-September convocation, the agency’s Board of Governors could very well pass a resolution expressing its grave concern and eventually refer Iran to the UN Security Council. Such a development could lead Iran to escalate further, by either ratcheting up its nuclear program or even, as it has threatened, withdrawing from the JCPOA and/or the Nuclear Non-Proliferation Treaty altogether.

The U.S. and its allies would likely step up coercive measures in turn. Tehran would be left not only short of its goal of shedding the burden of U.S. sanctions but also facing a more united Western front.

The better path forward would be a mutual return to full compliance with the already negotiated JCPOA. The Raisi administration’s envoys could return to Vienna in September and negotiate a slightly improved version of the text that their predecessors prepared and that brought the talks close to the finish line. Both sides would need to be flexible. The U.S. would need to offer greater sanctions relief, and Iran would need to reassure its negotiating partners that the JCPOA’s non-proliferation aspects are fully restored by conceding on the advances it has made in research and development since 2019.
As for the more significant obstacles – Tehran’s wish for guarantees against another unilateral U.S. withdrawal and Washington’s desire for follow-on talks – two options present themselves: both sides should either drop these demands or link them. In the second case, they could keep negotiating after restoring the JCPOA to strengthen it, including by building assurances – potentially, for example, a stringent exit clause – into a follow-on accord.

The alternative, if the two sides cannot bridge their divides, would likely be a risky escalation. Iran might well up the nuclear ante further and the U.S. impose more coercive measures, both looking for more leverage ahead of a return to talks. This scenario is, in any case, not anathema to some in Tehran and Washington, who deem the JCPOA inadequate and seek a more advantageous agreement, or JCPOA-plus.
Each would hope to extract more from the other. Iran, as it has already indicated in the six rounds of talks in Vienna, would want more sanctions relief, including from U.S. primary sanctions (these proved the main obstacle for the Iranian banking sector in trying to rejoin the U.S. dollar-dominated global financial system after the 2016 JCPOA sanctions relief).

Iran would also want compensation for damages incurred during the Trump administration’s “maximum pressure” campaign. Western governments, in turn, would want longer-term restrictions and more rigorous monitoring of Iran’s nuclear program. But such an escalatory cycle could spin out of control just as easily as lead to further talks.

The path to a JCPOA-plus does not need to be so treacherous. One option that would avoid the dangerous escalatory cycle would be to strike quickly an arrangement that amounts to a JCPOA-minus, in which Iran agrees to freeze some of its most proliferation-sensitive activities (eg, enrichment above 3.67 per cent, advanced centrifuge work and uranium metal production) in return for an agreed-upon level of oil exports and/or partial access to its frozen assets. Such an interim arrangement would cap the immediate non-proliferation crisis, deliver economic reprieve for Iran and buy time for the parties to negotiate parameters of a more-for-more JCPOA-plus that addresses their broader demands.

Still, even such an agreement would not be enough. Any deal along those lines will remain susceptible to the same pathologies that damaged the JCPOA: a narrow arms control agreement is unlikely to survive the enmity between Iran and the U.S., given the views of hardliners in both countries, and their respective regional allies. The parties need a parallel process to address regional tensions. As Crisis Group has proposed before, that process could take the form of an inclusive dialogue in the Gulf that is region-owned but could be initiated and supported by a core group of European states, with backing from the U.S. and other UN Security Council permanent members.
Smaller and relatively neutral Gulf countries, such as Oman and Kuwait, could lead the discussion, addressing both Iran’s and the Gulf Arab states’ collective security concerns. A regional arms control discussion that takes the conventional weapons asymmetry into account is the only way to address Iran’s ballistic missiles and their proliferation to non-state actors.

VI. Conclusion

The arrival of a hardline president in Iran has prompted dire predictions about the direction of Iran’s domestic and foreign policies. There are reasons for concern. Raisi’s past, his rhetoric during and after the election campaign, and the hardliners’ consolidated control over the instruments of power in Iran may well signal a more ideological and less pragmatic approach, especially toward the West. But none of the fundamentals has changed: the supreme leader will still have the final say on strategic matters; Iran still needs and will actively pursue sanctions relief; and any chance of altering its regional and defensive calculus will come, if at all, through serious diplomatic engagement – including at the regional level – that takes into account the country’s legitimate security concerns and interests alongside those of its rivals.
” The promise and peril of Raisi’s presidency depend, above all else, on his predecessor’s key legacy: the JCPOA “

Yet the promise and peril of Raisi’s presidency depend, above all else, on his predecessor’s key legacy: the JCPOA. Both Iran and the U.S. squandered the opportunity to restore the deal during the overlap between Presidents Biden and Rouhani – the former’s initial dithering deepened mistrust and hardened the latter’s stance, as it continued its provocations in the nuclear realm and in the region, in turn fuelling scepticism in Washington over Tehran’s seriousness in wanting to reach a deal.

But the agreement is still salvageable despite the required trade-offs, and saving it would be far less costly than the alternatives. Failure to resuscitate it soon could usher in another race between sanctions and centrifuges, reminiscent of the early years of Ahmadinejad’s presidency. The advances Iran has already made over recent months in its nuclear development would make such a race all the more perilous.

If an agreement on the JCPOA does remain beyond reach, however, a Plan B would be to agree to an interim arrangement that would freeze the crisis. Both sides, having learned from the JCPOA experience, could then build a stronger and more durable nuclear accord in parallel to talks aimed at de-escalating tensions in the region. Raisi, as a trusted disciple of Ayatollah Khamenei, is better placed to negotiate and follow through on agreements with the West. But that potential could quickly fizzle, and success depends on an inclination toward pragmatism both in Tehran and the capitals of its negotiating partners and neighbours. Eschewing diplomacy altogether, with each side waiting for the other to blink first while seeking more leverage, has already proven to deliver the worst of all worlds: mounting concerns over Iran’s nuclear program, recurrent calls for military action and continued severe economic hardship for the Iranian people.

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