The Islamic Republic at the Crossroads: Iran's Domestic and Regional Policy in a Post-Pandemic World

Even before the outbreak of the Covid-19 pandemic, Iran was facing serious economic, social and political challenges.  Due to US and international sanctions, its economy was in dire straits, large segments of the populace have lost faith in the government of Supreme Leader Ali Khamenei, and internal conflict within the Iranian elite sets extremists in the IRGC against moderates surrounding President Hasan Rouhani who would like to pursue rapprochement with the West. Standing at a crossroads, what decisions will Iran make in terms of domestic and regional policy?

What Iran decides within the next 6 months to a year will have serious ramifications for decades to come. Broadly speaking, Iran face two choices.  It can focus on foreign policy and continue its efforts to continue with missile development, enriching uranium and sponsoring destabilizing forces in Iraq, Syria and Lebanon and continue its conflict with Saudi Arabia and the Arab Gulf states. Alternatively, it can decide to focuses on domestic needs which offers the possibility of sanctions relief and propping up the current regime’s legitimacy.

Iran's regional interests in the Levant

From a cost-benefit analysis, the latter policy would be Iran’s most sensible choice. However, extremist elements will work hard to prevent any moderation of Iran’s current regional policies and view a turn to domestic concerns as a threat to their long term interests. Nevertheless, the question remains: if we view Iran through a different frame, will changing economic and regional conditions force Iran to abandon policies which may have brought benefits in the past but could threaten regime stability and even viability in the future?  In other words, is its radical foreign policy viable over the long durée?

Since the 1978-70 revolution which overthrew Shah Mohamed Reza Pahlavi, the current regime has witnessed an erosion of its legitimacy, especially after Ayatollah Khomeini’s death in1989.  Revolutionary propaganda is belied by massive government corruption which is clear for all Iranians to see, and a state which fails to deliver on economic growth and social services.

At least 631 Iranians were killed during Nov 2019 anti-regime protests 

As corruption has spread, and a privileged elite consolidated power, the regime has drawn down on its legitimacy.  Many would argues that its “bank account” is almost empty.  Proclamations that Iran is in the vanguard of revolutionary change in the MENA region and larger Muslim world increasingly fall on deaf ears. Youth in particular chafe under rules which they see as oppressive and increasingly express themselves through anti-regime demonstrations.

One sources of regime sustenance has been its aggressive policies, not only in Iraq, but especially in support of the regime of Bashar al-Asad in Syria and Hizballah in southern Lebanon.  Iran’s hostility to Saudi Arabia for its close ties to the United States has been touted as proof that the Islamic Republic, not the Saudi royal family, is the true defender of Islam and Islamic interests.  Iran’s threat to Saudi Arabia assumed a military dimension in 2019 when one of its drones hit a Saudi refinery, temporarily sending shock waves through global oil markets.

Qom and Tehran - where the Covid-19 pandemic began in Iran

In its proxy war in Yemen with Saudi Arabia and the United Arab Emirates, Iran seems to have gained the upper hand through the Houthi rebels, its local allies.  The UAE withdrew from the war in late 2019 and recently Saudi Arabia declared a unilateral ceasefire, indicating it seeks an end to the war.  Meanwhile in Iraq, Iran’s proxy militias, such as Kata’ib Hizballah, the Badr Organization, and Asa’ib Ahl al-Haqq (League of the Righteous People) have regularly attacked US troops stationed at Iraqi military bases. 

These militias not only assumed a dominant role in decision-making in the Iraqi state under the docile leadership of Prime Minister Adil Abd al-Mahdi, but they have served as a conduit for hard currency to the Iranian regime as well as engaged in other illicit activities such as human and organ trafficking.

At the same time, stringent sanctions imposed by the Trump administration have taken a deep bite out of an already reeling economy.  Possessing the third largest reserves of oil in the world, Iran has been unable to export at the 3.5 million bbl./day it once enjoyed and currently finds itself exporting less than 300,000 bbl./day. Even with efforts to make its economy less dependent on oil, and through selling oil at discounted prices to China have not enable Iran to sustain its regional ambitions, let alone deliver the needed domestic benefits expected by the Iranian populace.

Iran’s ability to “squeak by” came to a crashing halt with the onset of the corona virus pandemic.  In a problem largely of its own making, Iran has become the MENA country with the highest number of Covid-19 infections and deaths.  Following the path of China’s President Xi Jinping and Donald Trump, Supreme Leader Ali Khamenei refused to address the spread of the corona virus when medical experts brought it to his attention.

Nothing was done to control the flow of pilgrims within Iran to holy shrines. Further, in an effort to bolster the regime’s legitimacy through a large turnout, the government urged Iranians to go to the polls in March national elections, despite fears that voting would intensify the corona virus outbreak. With many voters traveling to polling places, the elections became an incubator for spreading the virus as voters brought the disease back to their home cities, towns and villages. Travel by Chinese to Iran wasn’t curtailed because China, where the corona virus originated, is one of Iran’s strongest allies.  As of this writing, there are estimates that more than 37,000 Iranians have died from Covid-19.

In neighboring Iraq, Iran faces widespread hostility. The killing of more than a 1000 peaceful youth protestors and the wounding of more than 20,000 others who began demonstrations against corruption, nepotism and lack of democracy were viewed as a threat by Iran. Its proxy militias and militia members who have been integrated into the Ministry of Interior have been responsible for the killings as well as kidnapping and torture.

As the corona virus spread in Iran, Iraq has sealed its 1000 mile border. Despite Iranian entreaties to allow goods to be imported into Iraq, the Iraqi government has refused. Meanwhile, a campaign to boycott Iranian goods, which had already developed during the October Revolution demonstrations, to protest the killing of peaceful youth protestors, has acquired new momentum. Iraqis fear purchasing Iran goods could bring the corona virus into their households.

Meanwhile, a cleavage within Iraq’s militia movement (al-hashad al-sha^cbi) has further reduced Iran’s control over Iraqi politics. On the one side, pro-Iranian militias seek to use Iraq as a springboard for Iranian military and financial action in Syria and Lebanon while benefitting themselves from economic ties with the Islamic Republic.  On the other side, militias with ties to Ayatollah Ali al-Sistani and the Shi^ca clergy who support him seek to constrain Iranian influence in Iraq. 

With al-Sistani in ill health, there is an emerging struggle over his successor with many members of al-marja^ciya fearful that Iran’s doctrine of the State of the Supreme Jurisprudent (wilayat al-faqih; vilayet e-faqih) will be imposed on Iraqi Shiism, which eschews direct links between religion and politics.

The most recent prime minister delegate, Dr. Mustafa al-Kadhimi, is much less sympathetic to Iran than the current caretaker prime minister, ^cAdil ^cAbd al-Mahdi.  Kadhimi has made Iraq’s sovereignty a core component of his platform, signaling to Iran that he will not follow in the subservient footsteps of ^cAbd al-Mahdi. The pro-Iranian Hashad’s opposition to 

al-Kadhimi’s ministerial choices is indicative of Tehran’s displeasure and fear that he will cooperate with the United States.

IRGC forces stationed in Syria

In Syria, Iran finds itself mired down in a “forever war.” The al-Asad regime will countenance nothing less than a complete military victory over its enemies. However, with Turkey supporting anti-Asad forces in Idlib and Syria’s northern rim and a resurgent Da’ish in the al-Badiya eastern desert region, the country’s civil war offers no end in sight.  Iran also has to contend with Israel attacks on its weapons shipments to the Asad regime, especially missiles, and competition with Russia whose policies in support of the regime do not always align with those of Tehran.

Iranian Revolutionary Guards Corps (IRGC)

In addition to losing IRGC fighters, Iran’s support of al-Asad is costly. Iranians ask among themselves why the regime spends so much of the state budget on foreign adventurism rather than improving the economy and social services at home. With an Iraqi state and public increasingly hostile to Iranian interference in Iraq’s internal affairs, a weakening of the militia movement die to internal cleavages, and the decline in hard currency finding its way from Iraq into the Islamic Republic,  Iran’s ability to sustain its support of the Syrian dictator will be sorely tested.

The collapse of Lebanon’s economy has jeopardized Iran’s influence in the south of the country through its support for Hizballah. As a dominant partner in the current Lebanese government, Hizballah has come under criticism even from its own members. Increasingly, pro-Hizballah Shi^ca ask why the organization continues to focus on “struggle” when people no longer have jobs and can’t feed their families.

As the Lebanese lira loses its values, Hizballah has tried to take over Lebanon’s banking system as a means of obtaining funds.  Clearly, Iran is in no position to bail out the organization which also bears responsibility for the millions of Syrian refugees who have placed such an economic burden on the country.  What was once a vaunted militia, more powerful than the Lebanese Army itself, is now seeing a decline in its power. Its ability to support Iran’s interests in Syria, which involved sending its forces to help the Syrian Army, is no longer a given.

Streets being disinfected in Tehran

Despite the active involvement of Iran’s Revolutionary Guards Corps (IRGC) in helping to fight the corona virus pandemic, the failure of the Iranian government to take the pandemic seriously in the first place has further undermined public trust in the state and its institutions.  Despite the first death from Covid-19 in February, it took until the end of March before the regime began to implement serious measures to contain it. Rather than seek international help, the regime forced Doctors Without Borders to leave Iran in March, rather than allow them to witness the virus’ spread and lethal consequences.

Even though the first fatality of the virus was reported in the holy city of Qom on February 19^th, local clerics, with the support of Supreme Leader Ali Khamenei, successfully argued against a Ministry of Health request that local shrines should not be closed to the public thus spreading the disease. Like Donald Trump, Khamenei downplayed the virus’ threat for over a month and proposed quack cures for the virus.  He and IRGC leaders continued to refer to the virus as a “United States and Israeli plot.”

Posters for Iran's February elections

That the February elections had the lowest turnout (42.57%) since the Iranian Revolution established the current state in 1979. Turnout in 2016 was 61% with the lowest prior to that being 51% in 2004. The disqualifications of 9,000 progressives and moderates by the so-called Guardian Council prior to the elections undermined regime efforts to encourage large-scale voter participation.

The state’s interference in the elections and lack of transparency in confronting the Covid-19 pandemic were only reinforced by the accidental shooting down of a Ukrainian civilian airliner by the IRGC this past January, killing all 176 passengers aboard, which took the regime over 72 hours to acknowledge its responsibility.

The Iranian regime still has the string support of hardline elements in Iran. Trust however is a rare commodity in Iran as the populace as seen hardline elements work to stymie all of President Rouhani’s efforts to promote the economy by sidelining the financial empire of the IRGC.  That the IRGC killed more Iranian protestors, largely youth, during November protests against a sharp spike in gasoline prices, has not been forgotten.

Satelleite photo of mass graves prepared for Covid-19 victims-March 2020

The Trump administration has played into the hands of Khamenei and Iran’s hardliners. They will probably dominate the Iranian presidential elections in 2021. However, by not recognizing the economic reality of a post-corona virus world and a populace which increasingly views the Islamic Republic as a corrupt, nepotistic and ineffective regime, Iran’s political class will lose even further confidence and legitimacy.  Because Iran refuses to use the pandemic to implement reforms which would strengthen the state, its aspirations to become a regional hegemon are in the process of being severely curtailed.