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Iran – Elections Boost Reformists

In late February, voters went to the polls for elections to fill the 290 seats in the unicameral parliament and to choose the 88 members of the Assembly of Experts, the body responsible for choosing Iran’s supreme leader. Incomplete results indicate that reformist allies of President Hassan Rouhani have significantly increased their presence in both bodies.
The president was counting on widespread public approval of his successful effort to free Iran from the burden of international sanctions to produce an upwelling of support for like-minded parliamentary candidates, thereby improving the prospects for implementation of other elements of the reform agenda, and, presumably, improving Rouhani’s chances of securing a second term in 2017.
That appears to have been the case, albeit with some caveats. The reformist electoral bloc, the List of Hope, won a total of 83 seats in the Majlis, including all 30 of those representing the capital, Tehran. However, with claim to nearly 70 seats yet to be determined—run-off elections are scheduled for April—the balance of power in the Parliament is still unclear. Moreover, the disqualification of a significant number of reformist candidates by the conservative Guardian Council created vacancies in the List of Hope that were filled by candidates who failed to make the cut for the conservative People’s Voice Coalition or the hardline Principlists Grand Coalition.
Thus, even if the List of Hope ends up with the most seats in the Majlis, the scope for substantive reform may not be as great as the headline numbers might suggest.
There is little doubt that the conclusion of a nuclear agreement with the so-called P5+1 (the five permanent members of the UN Security Council and Germany) last year, which cleared the way for the full lifting of US and EU sanctions in January 2016, played a big role in the strong showing of reformist and moderate candidates at the February elections. Whether popular support for the reformist agenda can be sustained through next year’s presidential election will depend to a large degree on the government’s ability to translate Iran’s international rehabilitation into tangible economic improvement.
The strong showing of reformists in February can be expected to boost investor confidence, even more so if Rouhani’s allies win the lion’s share of run-off contests in April. The government has set a goal of contracting out about four dozen oil and gas projects with a projected value of $185 billion by 2020. Officials have touted a new investment model based on an integrated petroleum contract that purportedly will include very attractive terms. However, details await the presentation of the 2016/2017 budget and the new five-year development plan, both of which have been delayed owing to the elections. The Majlis has already approved an extension of the current five-year plan for another year, and a continuation of the budget for the current fiscal year (to March 21) for two months.
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