Crisis Response Council spoke to experts to examine the implications of Ebrahim Raisi's victory in Iran's controversial presidential election.
Economic Implications & Reforms in Iran
Karen Young, Director, Economics and Energy Program, Middle East Institute
The election of Judiciary chief Ebrahim Raisi as Iran's next President is neither a surprise nor an obstacle to the successful resumption of the JCPOA agreement. But it is an obstacle to Iran's economic growth and re-entry to financial markets. Raisi's hard-line positions and belief in the resistance economy model will mean that Iran's eggs will be in one basket early on for economic growth. That basket is oil. While Iran already finds ways to export oil, its ability to grow the oil and gas sector through foreign investment will be limited as the sector itself is seeing a sharp decline in capital investment globally, and investors will be shy of entering a market that is very likely to see continued sanctions on individuals connected to military enterprises.
The timing of Iran's re-entry to oil markets will coincide with an upcycle in prices, and Iran will benefit from that revenue into 2022 if a deal can be reached by late 2021 with some energy export sanctions relief included. But the longer term shifts in energy markets mean that Iran will be unsuited to attract and absorb the kinds of new clean energy investments that might stimulate longer-term growth. Moreover, the state itself is unlikely to initiate necessary reforms to its bank sector and regulatory environment that would allow outside competition.
The Middle East is poised for an opportunity, as a lot of capital is sitting on the sidelines looking for investments that qualify or are labeled as friendly to the environment, to social welfare or to building better governance - what investors call ESG. Iran’s new President is unlikely to be interested in the kinds of reforms that would position his country to take advantage of this opportunity. The outlook for Iran’s economic reform agenda is now a holding pattern that may be extremely costly for its future.
The Reaction from Turkey
Ali Bakir, Assistant Professor, Qatar University
In a message to President-elect Raisi, Turkey’s President Recep Tayyip Erdogan congratulated the incoming president and wished prosperity for the Iranian people. The Turkish President hopes Turkey-Iran ties will further strengthen under Raisi's presidency, announcing he is ready for cooperation and willing to visit Iran for the upcoming meeting of the Turkey-Iran High-Level Cooperation Council once the pandemic abates. However, Turkey is firmly aware that Raisi has limited influence over Iran's most critical policies and priorities, particularly if his position runs contrary to that of the Supreme Leader and the IRGC.
Therefore, there are no illusions in Turkey in relation to the decision-making process in Iran but Turkish officials will pay special attention to Raisi's own posture and governance over the coming period, not necessarily because of his notorious reputation as a prosecutor who oversaw the deaths of thousands of political prisoners or because of his new position as President of the country but to assess what might become of Raisi in the future as Iran prepares a successor to Ayatollah Khamenei.
Relations between Turkey and Iran have always been characterized by rivalry and conflict. Yet, Turkey’s relations with Iran during Raisi’s era will be influenced by two main factors: US-Iran relations and the geopolitical re-alignments. These relations and configurations will shape Ankara's ties to Tehran, which could be shaped by a combination of both co-operation and competition, as well as indirect confrontations. While Ankara will look to boost economic relations and bilateral trade, geopolitical and foreign policy issues and dynamics may overshadow economic ties and present a series of challenges to their broader relationship.
The Response from the KRG
Wladimir van Wilgenburg, Author, The Kurds of Northern Syria
Leaders of the Kurdistan Region's leading parties, the Kurdistan Democratic Party (KDP) and Patriotic Union of Kurdistan (PUK), were quick to congratulate Ebrahim Raisi on his election win. However, both parties would prefer a moderate alternative. Their main message to Iran was focused on dialogue and stability. The Kurdistan Region’s President, Nechirvan Barzani, stated he hopes relations with Tehran are strengthened to “secure peace and stability for both sides", while Prime Minister Masrour Barzani stated that the Kurdistan Regional Government (KRG) hopes to “advance regional peace and stability” through cooperation with the new President in Iran. The PUK, a party that is aligned more closely with Iran than the KDP, issued a statement that stated the Kurdistan Region is in “dire need of your wisdom in line with establishing the language of negotiations and reinforcing peace and security.”
Kurdish officials have repeatedly expressed their concerns over the increase in attacks on Erbil, by Iran-aligned militia groups. Raisi has so far promised to revive the nuclear deal with the West, but ruled out limiting Iran’s missile program and support for militias, including in Iraq. The Kurds want Coalition troops to stay in the Kurdistan Region as a balance against Iranian and Turkish influence. Therefore, the Kurdish parties hope that the new President in Iran will not escalate support to Iran-backed militias in case nuclear talks between the US and Iran make limited progress. However, they also know that the election and Raisi's presidency will not necessary lead to any major significant changes, especially since the Iraqi file is controlled and managed by the IRGC but do, at the same time, hope that nuclear negotiations could reduce tensions in the region and the prospects of further attacks on Kurdistan.