The Legatum Institute hosted a lunch discussion with Abbas Milani, Director of Iranian Studies at Stanford University, to discuss President Rouhani’s reforms and the societal transition taking place in Iran.
For this unusually distinguished group of Iranian experts and specialists, Milani laid out a striking argument: Although the Islamic Republic remains in place, Iranian society is now changing rapidly, becoming secular, anti-clerical and westernised. The street protests of 2009 showed, he argued, the extent of the dissatisfaction with the regime. But they also taught people that a street revolution cannot succeed against implacable violence. Nobody wants Iran to end up looking like another Syria.
Against this background, President Rouhani could play an important role, as a negotiator of an important but gradual transition. Rouhani’s government has to deal with a static and corrupt system made worse during Ahmadinejad’s presidency. The state of the economy drastically deteriorated under the previous administration: the oil industry now only produces 2 million barrels daily, whereas under the Shah it used to generate 3 times as much. Unemployment remains high and there has been double digit inflation for 42 consecutive years.
In response to both economic and social pressure, President Rouhani is trying to modify the political system, but without confrontation, which makes the transition process complicated. Rouhani plans to reform the country by first rationalising and opening up the economy. Milani believes that Rouhani really does want to strike a deal with Western powers in a bid to end the sanctions regime.
Milani argued that the revolutionary guards (IRGC) and the clergy are not strong enough to resist Iran’s societal change. If they want to retain a position of power, they will need to reform themselves. Already the ‘mafia organisation’ of the IRGC is no longer a homogeneous group, and some members of the clergy are already making some concessions, such as voicing their concern about the persecution of Bahá’í s. But those who benefit from the status quo will need guarantees. This particularly applies to the revolutionary guards, who currently control about a third of the economy and would not be able to compete in an open economy.
Milani concluded that at the deepest level, the Islamic Revolution has already failed. Iranians, particularly the youth and women, “are negotiating a new concept of politics” by changing the regime without a revolution. If Rouhani has the audacity and can win the support, Milani argued that “a brighter future is awaiting Iran”.