Iran Matters

This paper constructs and tests the robustness of consistently measured poverty trends in the Islamic Republic of Iran after 2008, using international poverty lines based on U.S. dollars at 2011 purchasing power parity. The constructed estimates reveal three distinct periods of welfare in the Islamic Republic of Iran: increase in poverty and inequality between 2008 and 2009, decline in poverty and inequality between 2009 and 2012, and gradual deterioration of both indicators again after 2012. The results are robust regardless of the choice of welfare aggregate, inclusion or exclusion of different components, and spatial adjustment accounting for regional variation in food and housing prices.

Aaron Arnold, Associate with the Project on Managing the Atom, analyzes whether or not Iran has made sufficient progress with regards to financial reform in order to see restrictions on banking lifted. He notes that while the Financial Action Task Force did not call for members to exercise countermeasures when dealing with Iranian financial institutions, he questions whether or not Iran has made moves towards to financial reform, and notes that it has not undertaken the mutual analysis efforts that other nations with financial concerns, such as Pakistan, have undertaken for more positive assessments from the FATF.

This chapter explores the complexity of political processes in Iran and assesses the degree of change and continuity in the Iranian political system in light of the tumultuous events unfolding since 2009. Why have elite power relations in Iran been unsettled, and what is the impact of these factional fluctuations of power and processes of change on the institutional structure of the Iranian regime itself? It is critical to ask whether the manner by which institutional alteration occurs within the regime was conducive to the long-term monopolization of power by a single political faction. If so, has the multifactional and competitive nature of the regime been replaced by one of dictatorship, as may have appeared to be the case? Or, is the regime’s system of elite conflict management and institutional restraint a durable feature that will persist in the foreseeable future?

Aaron Arnold, Associate of the Project on Managing the Atom at the Belfer Center, writes in The Diplomat that a key threat to the ongoing implementation of the Iran nuclear deal is the risky nature of the Iranian financial sector. While Iran is banking on receiving greater foreign investment, continued problems with the Iranian financial sector, including lack of sufficient regulatory controls and the potential ties to terrorist financing, have made companies cautious about investing in Iran. He suggests that the United States work with Iran to bring its banking system up to the same standard as the global economy, and to consider closer integration of Iran into the world economy in order to preserve the effects of the nuclear agreement.

A coalition of moderates and reformers achieved major gains in both the Majles (parliament) and Assembly of Experts elections held on Feb. 26, and more in this week’s Belfer Iran Brief, covering February 22-March 4, 2016.

Iran is holding a high-stakes parliamentary election Friday. In mid-January, the conservative Guardian Council surprised some observers with the massdisqualification of reformist candidates in Iran’s upcoming parliamentary elections. This institutional gambit was partially rescinded a few weeks later, after a new review of the qualifications of the candidates. While the disqualifications show that the conservatives still hold the reins of power in Iran’s political system and set the terms of the game, as the reversals signal, they cannot dictate the final results or eliminate competition.

With the successful negotiation of the nuclear agreement, the coalition that backed President Hassan Rouhani on the deal will begin to fragment as factional rivalries and infighting increase and once again shape political competition inside Iran. The electoral results, however, will not have a significant impact on the continued implementation of the nuclear agreement. Instead, the conservative establishment in Tehran seeks to maintain leverage over Rouhani on broader international developments as well as domestic matters. In particular, these elections will be more important in determining the future path of development Iran chooses and how economic reform will be undertaken by the Rouhani administration.

The heightening of tensions between Riyadh and Tehran has become a significant factor in the regional politics of the Middle East.  While the cold war between Iran and Saudi Arabia is certainly not a new phenomenon, the recent execution of Sheikh Nimr by the Kingdom, the storming of the Saudi Embassy in Iran, and the end to formal diplomatic ties between the two countries signals a more dangerous chapter in the regional conflict. What are the perspectives from Iran and Saudi Arabia on the rising tensions? How do they view each other’s regional intentions and foreign policies? And, what steps can be taken to mitigate the conflict? To answer these questions, the Iran Project, led by Payam Mohseni, has solicited two pieces to provide us with vantage points representing how Iran and Saudi Arabia respectively view each other. Below, we are delighted to highlight HRH Abdulmajeed AlSaud’s article on behalf of the Saudi perspective.

The heightening of tensions between Riyadh and Tehran has become a significant factor in the regional politics of the Middle East.  While the cold war between Iran and Saudi Arabia is certainly not a new phenomenon, the recent execution of Sheikh Nimr by the Kingdom, the storming of the Saudi Embassy in Iran, and the end to formal diplomatic ties between the two countries signals a more dangerous chapter in the regional conflict. What are the perspectives from Iran and Saudi Arabia on the rising tensions? How do they view each other’s regional intentions and foreign policies? And, what steps can be taken to mitigate the conflict? To answer these questions, the Iran Project, led by Payam Mohseni, has solicited two pieces to provide us with vantage points representing how Iran and Saudi Arabia respectively view each other. Below, we are delighted to highlight Ambassador Seyed Hossein Mousavian and Mehrdad Saberi’s article on the Iranian perspective.

The dramatic seizure of American navy sailors in the Persian Gulf by the Iranian Revolutionary Guards could have endangeredImplementation Day—when on January 16 Iranian compliance with the nuclear agreement so far was verified and the international sanctions against Iran lifted. Instead of derailing the deal, however, the Guards used the incident, as well as the highly publicized prisoner swap, as symbolic events to send the world a message.By detaining the vessels and broadcasting images of its crew to a global audience, the Guards used the opportunity to reveal the future path of Iranian foreign policy in the wake of the nuclear agreement—a path that can be best described as ‘pragmatic revolutionism.’

Graham Allison, Director of the Belfer Center for Science and International Affairs, Joseph Nye, Harvard University Distinguished Service Professor, and James Walsh, Research Associate with the Security Studies Program at MIT were among a group of 53 national security leaders and analysts who signed a statement supporting the implementation of the Iran nuclear agreement. The statement highlights the progress made by the agreement in limiting Iran's nuclear program and reaffirms, despite continued differences between the United States and Iran, the value of diplomacy in resolving international disputes.