The paradox of Hassan Rouhani’s election to the Iranian presidency is that it is a victory for both the reformist camp and for Iran’s conservative clerical establishment.
On the reformist side, the last minute rallying of voters for a candidate promising a return to social harmony with economic realism and a new approach to Iran's Western foes represents a necessary rebalancing of the later years of the outgoing presidency of Mahmoud Ahmadinejad. The latter’s increasing recklessness alienated him both from the guardian of Iran's theocratic establishment, Supreme Leader Ayatollah Khamenei, and large swathes of the Iranian public. The least the reformists can now hope for is some limited political openings and the possible release (if not immediately) from house arrest of their champions Mehdi Karroubi and Mir Hossein Mousavi, defeated and arrested after the ill-fated 2009 presidential elections.
On the clerical/establishment front, and despite his pragmatic style, Rouhani is one of the regime's own, as were all pre-approved presidential candidates. Known to the outside world as Iran's chief nuclear negotiator late on in the turbulent presidency of the last reformist president Mohammad Khatami (1997-2005), Rouhani studied law in Glasgow alongside his more traditional clerical training. Unlike Ahmadinejad, Rouhani has never lost favour with the Supreme Leader, and his endorsement by Khamenei is a signal that he is expected to draw Iranian politics back into the mainstream clerical camp.
Several things should thus be understood from this election, if seen in the light of a regime strategy to return to normality, Iranian-style. The first is to redress the deepest of internal rifts and on-going damage caused by the fiasco of the 2009 elections that led directly to the widespread 'Green movement' protests. Despite being brutally contained, the public outcry against vote-rigging and the pro-Ahmadinejad bias of the results critically damaged the political standing of the senior clerical establishment, as did rumours in 2010 that Khamenei was terminally ill. With less talk of the Supreme Leader's frailty this time around, succession-planning for the senior clerical leadership must nevertheless have featured somewhere in the regime’s post-'Arab spring' thinking.
Secondly, on the economic front, remedies requiring an internal consensus are desperately needed. Rouhani has already acknowledged the limitations to fixing things any time soon, but the combined assault on Iran's economy wrought by international sanctions, the devaluation of the national Iranian rial, and inflation rising to an estimated 40% or more have all taken their toll. 70% of Iranians are now urban dwellers, in a radical change from the largely rural demographic make-up of Iran during the 1978-9 revolution, putting increasing strains on infrastructure, jobs and the need to secure and sustain new external markets, above all with Iran's neighbours in Asia.
Deliver on foreign affairs
Thirdly, patching up external relations has become more than a matter of satisfying Western political demands. Iranian oil exports to Japan have, according to the BBC, dropped 95% over the past year due to insurance costs inflicted by the international sanctions regime, affecting Korean and Indian demand too. Iran will need to find some kind of relief in its ability to trade freely, and may look to its Asian allies to pressure the UN Security Council to include some inducements (as well as punishments) in international dealings with Iran.
Rouhani's utility to the outside world is his role as a pragmatic and subtle negotiator, but he is not a figure who will fundamentally change Iran's bottom lines on issues close to Western concerns. He shares official – and NPT sanctioned – red lines over Iran's right to conduct a civil nuclear programme on its own terms, as well as a regional vision that sees the US and its allies, not Iranians, as the illegitimate intruders in the Middle East. Healing the damage with the West is thus more likely to be a question of tactics and short term objectives over any fundamental change in substance.
The bottom line for Iranians, Rouhani included, is that Iran's interests and role in its near neighbourhood have to be acknowledged by the West as legitimate, rather than countered and sanctioned at every turn.
One area of the Iranian budget not subject to austerity measures is the support, both financial and material, that Iran provides to Syria's Assad regime. The West's disarray over Syria has lent succor to Iran in not finding itself entirely alone in facing down Western ambitions in the Middle East: opportunistically or otherwise, Russia (and China) are on the same page as Iran in supporting the current Syrian government. The 2003 invasion of Iraq has left the US and EU internally and externally divided over Syria, and where Iran's strategy to protect its links through Syria to its Lebanese ally and client Hezbollah is so far working, the West has yet to devise a strategy that will stick.
If Iran can now break out of its economic cul-de-sac (a big 'if'), it may emerge strengthened from the election; even the regime critic and former president Rafsanjani has acknowledged the poll to have reflected popular Iranian will.
The West meanwhile is weakened on two fronts: by its own lack of a clear vision of what it can accept as an international and regional role for Iran; and by failing to forge links between Iran's regional aspirations and containing its nuclear ambitions. Once again, the threshold for break-out capability is being placed in the near future (as early as the end of 2013 by some estimations), just as the major Western powers (the US and UK above all) have extremely reduced networks inside Iran through which to understand the subtleties of what the newly harmonized clerical establishment can be expected, or trusted, to do.
Under-estimating the tenacity of Iran's key interests has served Western interests badly in the past. Failing to concede something to new regional times, in the kind of confrontation urged by Israel and the Gulf alike, will continue to serve them badly now. The pragmatism of Rouhani, within the constraints of his mainstream trajectory, should be seized on as an opportunity to de-escalate tensions in areas where there is some possible room for manoeuvre. But this may be in areas of Iran's declared interests that the West has so far been reluctant even to contemplate until now.