As vote looms, Rohani gets tough with big bankers
London - The sacking of four chief executives of Iranian state banks in June came on the eve of the first anniversary of the nuclear deal with world powers and as Iran’s economy falls short of popular expectations in the run-up to the 2017 presidential election.
“Four like this in one industry is unprecedented,” a leading Iranian business journalist said. “Last year [the Iranian year ending in March], all of us expected the economy would grow by 3-5% and we could, like Frank Sinatra, sing: ‘It was a very good year’. But, at best, growth was 0.9%.”
The government predicted 3.9% growth in the current year. The improvement results partly from eased sanctions and a doubling of oil exports, though it also reflects the government loosening monetary and fiscal discipline, even at the risk of stoking inflation.
However, will that be enough to overcome disappointment at the limited benefits of the July 14th, 2015, nuclear agreement, especially among poorer Iranians? They have felt little positive effect, and, in March, the Statistical Centre of Iran reported increasing inequality and poverty over the previous 12 months.
The culling of the bank executives — carried out at the request of Iranian President Hassan Rohani, according to the official IRNA news agency, followed weeks of executives’ pay details being leaked through social media.
The sackings came after Iranian Supreme Leader Ayatollah Ali Khamenei told the cabinet that “astronomical salaries” were “an attack on our values” and demanded the matter be “seriously followed up and the people informed of the results”.
Many in Tehran say Rohani’s critics are behind the “pay cheque scandal” and using it to feed popular resentment of the rewards enjoyed by technocrats but the scandal also points to shift in political factions.
February’s elections for parliament and the Experts Assembly, which chooses the supreme leader, culminated months of jockeying between supporters and opponents of the nuclear deal. Now the deal is accepted — Khamenei has said Iran will not renege if Washington does not — a wider fissure is opening that strains the relationship between Khamenei and Rohani.
“Categories of ‘reformist’ and ‘hardliner’ don’t work. This isn’t about democratisation,” said Saeid Golkar, a lecturer at Northwestern University in the United States and senior fellow at Chicago Council on Global Affairs.
“There are those who want to interact in foreign relations — Rohani has spoken of the nuclear deal as a model for regional problems — and against them are ‘confrontationists’. They have different discourses on both the economy and international relations. The competition for the next presidential election and the next supreme leader will be between ‘interactionists’ and ‘confrontationists’.”
The confrontationists are a large segment of the principlists, who yearn for a return to the egalitarian ideals of the 1979 revolution and who despise the technocrats associated with Rohani and his long-time ally, former president Akbar Hashemi Rafsanjani.
The confrontationists are looking for a candidate for the presidential election, probably in June 2017. Some back former president Mahmoud Ahmadinejad while others look to Qassem Soleimani, commander of al-Quds, the overseas arm of the Islamic Revolutionary Guards Corps (IRGC), who has enjoyed a strong public profile since 2014. Ahmadinejad, however, in his second term fell out publicly with Khamenei and would probably be banned by the watchdog Guardian Council.
Golkar said a more suitable choice could be Parviz Fattah, head of the Imam Khomeini Relief Committee, former director of Bonyad Taavon Sepah, an IRGC charitable foundation, and also former deputy head of Khatam-al Anbia, the Guards’ construction arm.
“Like Ahmadinejad, he leads a simple life and showed this by recently publishing his pay cheque,” said Golkar. “Fattah has good IRGC connections while the Imam Khomeini committee supports around 5 million Iranian families.”
While Fattah is hardly as well known as Rohani, Ahmadinejad’s 2005 landslide showed the power of an egalitarian message. “There are strong feelings against what is seen as corruption,” said Golkar.
“The head of Refah Bank got 240 million tomans [$78,000] a month in salary and bonuses, whereas the poverty level for workers is 850,000 [$276] per month. That’s why Fattah put his pay cheque online, to show he is the people’s man and receiving a monthly net income of 7.34 million tomans [$2,380], far less than many senior managers.”
This highlights Rohani’s vulnerability, Golkar said. “His focus is on the middle class and big cities. Poorer people and those in rural areas are saying, ‘Why should I vote for Rohani? He’s a technocrat. These people are getting 240 million tomans a month and I’m on just 850,000,’” Golkar said.
Unearthing and publicising pay cheques show the ruthless sophistication of Rohani’s opponents. Their election campaign has started far earlier than Ahmadinejad’s in 2005. And something else will irk Rohani: Khamenei’s reaction suggests his natural sympathy lies with those upholding the egalitarianism of the 1979 revolution rather than with technocrats.