PHOTO: Shopping for spices in Tabriz (Getty)


Centrists and reformists are celebrating an unexpected, sweeping victory in Tehran and increased influence in both Iran’s Parliament and the Assembly of Experts.

The outcome of the vote will be seen as a boost for President Rouhani, who has been under sustained pressure by hardliners and conservatives. However, the Government faces an immediate challenge, as it carries the responsibility to turn around an Iranian economy battered by years of sanctions, mismanagement, and corruption.

With regime in-fighting likely to continue — including the debate of the Government’s proposed 2016/17 budget and 5-Year Development Plan — Roshanak Taghavi writes for Foreign Policy:


“You’re so happy!” I couldn’t help but smile at Kaveh as I climbed into the backseat of an old, white Iranian Peugeot taxi on a warm May evening in 2014. By any measure, my friend should have been stressed: He had spent the last 90 minutes winding his way through Tehran’s congested traffic trying to find me. The Iranian capital’s infamous crush of Peugeots, Kia Prides, and motorbikes is often endearing for a newcomer to the city, but, for any resident, an hour-and-a-half of driving through the smog and congestion of Tehran’s narrow streets is normally a recipe for a nervous breakdown. But when I saw him nearly two years ago, Kaveh wasn’t just calm, he was beaming. “I’m just happy to see you here,” he replied simply as he climbed back into the taxi.

Five years had passed since the last time I had seen Kaveh in Iran amid the Green Movement, the storm of protests that engulfed Tehran in the wake of then-President Mahmoud Ahmadinejad’s contested 2009 re-election. Like so many Iranians, Kaveh, a consultant in Iran’s private banking and aviation industries, was disheartened by the subsequent crackdown and dispirited by the economic hardship in the years that followed. In that time, the Islamic Revolutionary Guard Corps (IRGC) had deepened its influence over major sectors of Iran’s economy; firms affiliated with the guard, such as its engineering arm Khatam al-Anbiya, were moving in to replace the major international energy companies that were fleeing the country. As Iran became more economically isolated due to sanctions, corruption reached unprecedented levels.

Speaking with Kaveh in 2014, all this seemed like an eternity ago. Hassan Rouhani had been president for almost a year, and Iran and the group of six world powers — the United States, France, Britain, China, Russia, and Germany — had inked an interim nuclear agreement in Geneva. For the first time in years, Kaveh no longer felt hopeless about the future of his country. Members of the business community, like him, believed Rouhani had the political grit necessary to fight corruption and bring economic change. The prospects of a nuclear deal had them revitalized, he told me. Kaveh had become a senior executive at a private aviation firm and was especially excited because sanctions for aviation had been relaxed; his company had launched talks with a European firm to buy new airplanes. International delegations were trickling in for business talks, and there was even talk of trade with America, Kaveh said excitedly.

Two years later, in 2016, Kaveh’s attitude has again shifted. Although there are glimmers of hope on the horizon of the Iranian economy, he tells me true change will take longer than he once thought. An aesthetic shift is underway in Iran, with refurbished mansions opening as five-star hotels in historic cities like Kashan and luxury boutiques such as Bulgari and Roberto Cavalli now dotting northern Tehran. Hotels in the Iranian capital are constantly booked with business travelers looking for investment opportunities. Inflation, which peaked at 40 percent as Rouhani took office in 2013, is on the decline and today stands at about 13 percent.

But the economy still suffers from deeply ingrained systemic problems that will take years to overcome. Youth unemployment is more than 25 percent, and though Tehran is peppered with new high-rises and construction projects, many remain incomplete, as the country endures the sector’s longest slowdown in recent history. Prices for basic foodstuffs remain high; the currency remains weak and is expected to depreciate further by summer as the government promotes exports.

In the run-up to the Parliamentary elections, Rouhani has tried to inject a sense of hope among a population disappointed by the lack of immediate economic improvement many thought would come with the historic nuclear accord. But the fact is that many Iranians’ expectations for change greatly outpaced the economic reality: The Iran deal finalized last July will allow the country to harness its vast economic potential in the long term, but average Iranians won’t feel change in their daily lives for some time to come.

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