Iran, Business 1st Outlook Sees Opportunity In Sanctions Relief

Iran’s Revolutionary Guard (IRGC), the most powerful branch of Iran’s military, is known for its fierce rhetoric, for supporting fellow Shiite Muslims across the Middle East, and for challenging American and Israeli regional influence.

Domestically the IRGC wields substantial political influence and controls a multi-billion dollar business empire that accounts for at least 10% of Iran’s economy.

For years the IRGC profited  from economic sanctions imposed by the Western powers over Iran’s nuclear program, by presiding over everything from vast construction projects and smuggling to charitable foundations.

So why now is the Guard supporting an emerging deal?

One reason is that the IRGC is loyal to Iran’s supreme leader, Ayatollah Ali Khamenei, who has cautiously endorsed a nuclear deal. But another is that years of managing lucrative companies have created a more flexible business 1st mentality, offsetting ideology.

Sanctions relief is good for Iran’s economy, which is good for everyone’s business. And easing the daily plight of ordinary Iranians helps guarantee survival of the Islamic Republic, thus preserving the IRGC’s prominent role.

Iran’s President Hassan Rouhani won the June 2013 elections in part by promising to remove the sanctions. While some in the Guard benefited from earlier years of sanctions, until about Y 2011, the far more comprehensive measures imposed under US President Barack Hussein Obama, from curtailing Iran’s Oil exports to hobbling its cash transactions have hurt even the big players.

While Iran’s hard-line politicians oppose any nuclear deal that requires compromise, and dislike even talking to the US and Western powers, whom they accuse of seeking regime change, the IRGC top brass in early April publicly backed the nuclear talks as never before.

“Up until today the nuclear negotiation team have defended the Iranian nation’s rights well, and the nation and IRGC is grateful for their honest efforts,” said IRGC commander Mohammad Ali Jafari.

This period of negotiations was a definitive year for Iran, Maj. Gen. Jafari said, and “the enemy”  the United States was “wrongly thinking” it could change Iran’s behavior through talks and sanctions. Lifting all sanctions was the main demand of the talks, he said, in addition to preserving Iran’s right to Uranium enrichment and nuclear development.

IRGC is far from monolithic, and that its own confrontational rhetoric often masks a pragmatic side, they do not want war.

The IRGC wants to maintain the status quo, wants the Islamic Republic to be reinforced, wants to stay in power, and if things continue and there is more opposition internally because of sanctions or because of Iran’s isolation, that would endanger the IRGC position.

 

The Guard’s weekly magazine, Sobh-e Sadegh, recently highlighted Khamenei’s words. The negotiating team and talks toward “an honorable agreement” deserved support, it wrote, while “optimism about the US” was to be avoided.

But for the IRGC support for a deal may be about money and preserving post-deal political influence.

Some of the leaders see the big picture, that there is huge money for the IRGC and affiliates once the economy opens up.

The IRGC’s institutional presence in elected bodies is weak and about to get weaker with parliamentary elections next year likely to force out some hardliners.

 

By Reza Hashami, CEO, Global Modern Insurance, Inc.

Paul Ebeling, Editor

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