18.05.2021

The crisis Rouhani helps to fight corruption in Iran

Recent political developments in Iran surprised many observers and analysts. In the past, political groups in the country, as a rule, United in the face of external pressure. But this time, the reaction to the American sanctions was the escalation of internal tensions, including calls for impeachment are known for their moderate President Hassan Rouhani.

You can, of course, to explain the level of internal tension and hostility fractional paradigm, but the coincidence of these events with major turmoil in the currency market of the country, including the devaluation of the Rial to an unexpected and unprecedented level, about the impact of other factors.

Numerous statements by Rouhani and his Ministers regarding the possible publication of the names of the organizations that have received significant amounts of hard currency at the official exchange rate, indicate the political aspects of the current confrontation. In other words, there are signs that the ongoing economic crisis in Iran is a direct result of the political shifts that are overlooked in the West because of excessive emphasis on external factors such as sanctions.

Iran’s President Hassan Rouhani has made re-election for a second term. A convincing victory in the first round, surpassing his own figures of 2013. Although many political observers did not rule out second round of presidential elections.

You need to understand two interrelated internal processes: the resistance of some stakeholders who believe that conducted after the conclusion of the nuclear deal Rouhani’s reforms were undermining their interests, and internal competition for future international course of Iran, writes in Al Monitor, the economist and managing partner of Vienna-based consulting firm Atieh International Bijan Khajehpour.

The second of these processes explains why foreign Minister Mohammad Javad Zarif recently found it necessary to comment on the internal tensions, saying that at this stage “internal cohesion” is more important than bread and water.

However, it is also clear that those who are fuelling the current economic crisis, creating an artificial demand for hard currency, care little about the welfare of the economy and sacrificing national interests for their own political purposes. Thus, it is important to try to determine what stakeholder groups do you feel most threatened by Rouhani’s reforms and how they put pressure on the government.

In Iran, as in other countries, business and political interests often overlap each other. For example, the Party of Islamic coalition was originally the Association of traditional traders (or “salesmen”). A few decades ago, the organization became a political party, and is now actively involved in negotiations with the government. The Union of industrial producers is another example of the group’s business interests, which grew into a political entity.

In most cases, the political presence of the business community not so much (the only exception is the two aforementioned organizations), but the events of the past two decades, first the introduction of external sanctions and growing internal corruption, strengthened the interdependence of politics and business.

In addition, a number of semi-state entities belonging to the military, religious and revolutionary foundations that represent a different level of the merger of political and business interests. These groups have their own clear interests, and they should work in an economy where the government remains a key player because of its monopoly on oil and gas revenues, and thus the main provider of hard currency.

It is clear that in such circumstances, the real private sector is in the shade and each of these stakeholder groups (and government) are creating their own spheres to take advantage of the enormous economic potential of the country.

This mode of operation is possible only in case if interests are distributed based on an opaque and informal political culture. This culture flourished against the background of decades of external pressure and often the secrecy and opacity was exhibited as a legitimate and necessary way to overcome international sanctions.

At the same time, anyone who demanded greater transparency and accountability, were isolated with the arrest and persecution. Consequently, the cases of large misappropriation of public funds have become commonplace and even considered an integral part of the culture of opacity.

The decision to conclude with Rouhani world powers nuclear deal, and was then weakened by international sanctions, and steps to ensure transparency and accountability came into clear contradiction with this culture.

The reform process began to increase the transparency of state expenditures and the distribution of funds among the various organizations. Government organizations must now disclose more recently, non-public inside information. In parallel, the administration has introduced the changes needed to restore the connection of the banking sector with the global financial system.

Such openness is corrupt interests naturally perceived negatively. Businessmen, government officials, leaders of the Islamic revolutionary guard Corps and many others feared that opening their illegal activities, and the true self-interest will undermine their credibility in Iranian society. And it is important to emphasize that the corrupt interests are not confined to one specific faction or group.

In this context, the recent Rouhani instructed all ministries to publish the names of natural and legal persons who have received hard currency at the official exchange rate can be considered as a tool to counter groups that oppose government policy.

One recent example of an attack on the government was the statement of a senior member of the Party Islamic coalition of Asadulla of Badamchian urging Rouhani to apologize to the people, to resign and to hold early General elections as “a conservative President who will govern much more effectively”. In this regard, the non-random look and the anti-government protests in the “Big Bazaar” in Tehran.

To the aggravation of the political situation responded to Iran’s Supreme leader Ayatollah Ali Khamenei. June 27, in his speech to the surprise of many was asked to increase transparency and assist the administration. Thus, Rouhani received the crucial support of Khamenei and can at least in the near future to continue its reforms and actively combat corruption.

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