Iran has unfortunately witnessed a deep political upheaval in the wake of recent Presidential elections leading to vertical polarization among its ruling elite between two major factions, one led by President Ahmadinejad and supported by Supreme Leader Ayatollah Khamenei and the other by opposition leaders Mir Hossein Mousavi and Mehdi Karroubi backed by big personalities and former Presidents Mohammad Khatami and Hashemi Rafsanjani. The conflict between the two elite factions is internally driven and one that is difficult to discern fully. But the feud appears intrinsic, with underpinnings in theological, political and economic stakes. The former represents a more radical group having a base in rural areas, while the latter belongs to the more opulent section and enjoys support from a wide section of the clergy. One faction is seeking the fierce passions of ideological mandate, while the other is demanding moderation, pragmatic change and greater prosperity.
The weeks of demonstration on Tehran’s streets was not an uprising for regime change but a struggle within the regime between two factions, both of which are committed to upholding the Islamic regime but oppose each others’ agenda. Those who steered the public demonstrations were not only the children of Iranian elite but also included members of the clergy from Qom - decrying the writ of even Ayatollah Khamenei. The events seem to have further deepened the cracks in the Iranian polity and possibly fractured the 30-year old institution of velayat-e-faqih (clerical oversight) that has successfully run the state’s affairs since the 1979 revolution. The turmoil appears to have severely dented the sanctity of even Ayatollah Khamenei’s office.
Critics have suggested various scenarios of either settling for a compromise or towards a direct confrontation between the two factions. Now that President Ahmadinejad has been officially inaugurated for a second term with a fair amount of international acceptance, the tide has turned in his favor. This could lead to political suppression and crackdown against the reformers who are up in arms against the President since the 12 June election. Already, powerful figures aligned with Ahmadinejad are raising a chorus for action against those who fomented the post-election unrest. The combative Iranian President squarely blames his Western critics for inciting the trouble and derailing democracy.
If the political tussle within remains unabated, it may have disturbing implications throughout the region including the derailment of peace building in Iraq and Afghanistan. With Ahmadinejad retaking the centre stage, the standoff on the nuclear issue and even proliferation issues in the Middle East might assume new dimensions.
It is unlikely that Ahmadinejad will change his position despite Obama’s overtures for a closer dialogue. It is also unlikely that a September deadline set by the G-8 nations will ease the differences on the nuclear issue. Tehran was able to survive UN sanctions imposed last year due to the windfall of oil revenue. It maintained a healthy 6.9 per cent growth and the World Bank showed a decline in the Iranian poverty index. Nonetheless, the country witnessed a high inflation rate due to internal macroeconomic mismanagement, especially arising from Ahmadinejad’s populist programme to "bring the oil money to people's dinner tables."
The political crisis is certainly internally generated. The West, particularly the US, showed tremendous restraint and did not call for a regime change. The sanctions have so far failed to achieve Western goals. Even though Obama may still prefer to opt for direct engagement, there would be sufficient reasons this time, in the changed circumstances, for the US Congress and the EU to contemplate another round of tough and smart sanctions against Tehran which will not hurt ordinary Iranians who are rebelling against the hardliner theocrats.
Importantly, unlike last time, the West is likely to consider targeting Iran’s gasoline imports. India, a major exporter of gasoline to Iran, could be severely impacted by sanctions this time around.
Amidst all this, the one country that could undermine Western plans is China. Tehran’s recent invitation to Chinese investors and banks to invest $43 billion in Iran’s oil industry might change the rules of the game. Beijing’s sudden stepped up energy diplomacy for long term contracts in Iran’s major oil refineries, oil and gas fields should be a cause of worry for many including India. China is stepping in when major Western and Indian companies have held off from negotiating new deals with Tehran. Beijing may be keen to bail out Iran and would be “first in line” to grab opportunities in Iran like it did with the postwar Iraqi regime by investing billions in the Ahdab field.
India’s current relations with Iran seem to be in ruins. A diplomatic chill has arisen out of multiple reasons in recent years. During the author’s recent visit to Tehran, Iranians came out strongly against India’s growing ambiguity in its relations with Iran. There were critical Iranian misgivings about India’s willingness to comprehend Iran’s policy outlook in the first place, leave aside recognizing Iran’s potential role in the region (recognized by Russia and China). Whether it was sought to entail a policy review by the Ahmadinejad’s government under its second term was not clear. But there was no doubting the Iranian despondence over India’s drift from its traditionally held high image. Behind the criticism of New Delhi’s policies lay an anti-American thrust and India, according to them, was unmistakably seeking a short term view while missing the broader picture. They thought India was losing its autonomy and the shift in its foreign policy was cause for suspicion. This, for them, was not an ideal path to be followed by a nation that led the developing world at one point of time. Not only do they see India sliding on the wrong side of the values but it has also failed to recognize the mistakes committed by the Bush administration which even the American themselves including Obama has taken note of.
Though the Iranians saw India’s compulsion for feeding its billions, they desired India becoming not just an economic but a comprehensive world power particularly in the Asian context. Emphasis was clearly on shared common values and denominators between Iran and India, and thus the stress on working together along a broader civilizational, cultural and Asian construct. They felt that racism in Australia against Indians was to be understood in such a broader context. Iranians saw the problems with India arising out of the mindset at the highest political level in New Delhi. There was complete stoppage of implementing the agreements signed at bilateral levels.
While new international scenarios may be drawn up by the West vis-à-vis Iran shortly, the country located in the critical part of our region is steadily emerging as a power of consequence. It seems to be gaining latitude and a sense of self-confidence for pursuing a major role. There was no doubting the Iranian determination to seek tough negotiations with the West and gain autonomy. Such being the case, India should not wish away Iran easily, especially when the differences that have arisen in the recent past can be overcome through direct discussion and dialogue. India needs to view Iran in the wider context of Saudi and Pakistani-sustained Islamic assertions detrimental to India’s interests. An opinion powerfully exists in Iran that Pakistan’s nuclear weapons may not be only India-centric. New Delhi needs to seek a fresh dialogue with Tehran to ensure that its interest with Iran does not diverge from those of the Chinese, whose growing interests in Iran are directed at long-term rather than short term gains. While it will be wise to wait further for things to play out in Iran, a review of India’s Iran policy should be a high priority for the UPA-2 government.