Frustrated voters may deprive President Rouhani of a second term.
EghtesadOnline: Aryan, a 26-year-old with a master’s degree in engineering, showed impeccable timing when he returned home to Tehran from Canada. It was early 2016, and a decade of economic sanctions was drawing to an end, boosting Iran’s economy and kicking off a scramble for the country’s small pool of white-collar professionals. The job offers piled up. “Abroad, you’re a small fish in a big pond,” says Aryan as he unwinds in a garden cafe after a day spent drafting investment strategies for clients of the European consulting firm he works for. (He asked that his last name and the name of his employer be withheld.) “Here, each person can be the first to launch something or become a leader in their field.”
The thriving metropolitan upper-middle class that Aryan represents is a natural constituency for President Hassan Rouhani, who’s seeking a second term in the May 19 election. The nuclear deal he secured with world powers in 2015 lifted a host of crippling sanctions, drawing $12 billion in foreign investment and enabling a jump in oil output. Economic growth in Iran rose to more than 6 percent last year, after contracting 1.6 percent the previous year, according to International Monetary Fund estimates, Bloomberg reported.
Yet with the election less than two weeks away, Iran’s conservative clerics and their political allies are trying to defeat Rouhani by painting him as a leader who neglected the poor while courting international investors. A victory for Iran’s hard-liners could exacerbate already rising tension with the administration of U.S. President Donald Trump.
Six candidates have been approved by Iran’s Guardian Council to run in the election, but some may drop out before voting commences. Rouhani’s chief opponents include Ebrahim Raisi, a conservative cleric who’s widely viewed as the favorite of Ayatollah Ali Khamenei, the country’s highest authority. Another is Tehran’s mayor, Mohammad Baqer Qalibaf, whose performance in the first of three live televised debates on April 28 lent his candidacy new momentum. Qalibaf assailed Rouhani on air, accusing him of failing to keep his promise to boost employment. “Creating jobs, that’s what gives hope,” said the candidate, who hails from the conservative Principlist faction. “Investment can come from both abroad and locally. Good management is what’s needed.”
Efforts to unseat the moderate cleric have been aided by the growing perception that the rewards from the nuclear accord haven’t been evenly distributed. In an April survey by IranPoll, 72 percent of respondents said the deal hadn’t improved the living standards of average Iranians.
Khamenei has admonished candidates not to campaign on their ability to attract foreign investment, a comment widely seen as a dig at the incumbent. “Rouhani needs in the next two weeks to work on showing that post-sanctions developments will benefit the poor, if not now, then in his second term,” says Adnan Tabatabai, chief executive officer of the Center for Applied Research in Partnership With the Orient, a think tank based in Bonn, Germany.
Hossein, who owns a shop that sells saffron, barberries, and spices in the northeastern city of Torqabeh, Qalibaf’s hometown, voted for Rouhani in 2013, but he’s considering supporting the Tehran mayor this time around. “I am of two minds,” says the merchant, adding that business was better under Rouhani’s predecessor, Mahmoud Ahmadinejad.
The former president, whose confrontational style and rhetoric were blamed for the crippling economic sanctions imposed on Iran, championed populist policies at home, including cash transfers for the majority of Iranians. These helped cushion the blow from reductions in fuel subsidies and inflation that soared to more than 40 percent by the time he left office in 2013, as sanctions choked off imports of everything from medicines to oilfield equipment. Qalibaf has proposed more than tripling the monthly payments to low-income Iranians from 450,000 rials ($14) to 1.5 million rials. “If Qalibaf says he’ll increase subsidies, then I know for sure the villages will turn out for him,” Hossein says.
While Iran’s economy got a bump from the lifting of sanctions, the IMF estimates that the nonoil economy, the main engine for job creation, contracted in 2015 and barely grew last year. The fund estimates that unemployment has reached 12.5 percent, up from an average of 10.6 percent in 2014-15.
More than 50 percent of IranPoll respondents said the next president’s top priority should be reducing joblessness. Raisi, the conservative cleric, has also latched onto the theme; his campaign tag line is “Dignity and Work.”
Foreign-educated Iranians such as Aryan face no shortage of opportunities. Multinationals like Nestlé SA and Siemens AG that already had a presence in the country are adding staff, while newcomers are desperate for personnel to help them navigate language and cultural barriers. “It’s a battle for talent,” says Aseyeh Hatami, whose IranTalent recruitment website saw a 110 percent increase in the number of job listings posted by international companies in 2016 from the previous year.
Aryan, whose employer also has offices in Dubai, Kuala Lumpur, and Seoul, says he earns a salary comparable to what he’d get abroad. So far he has few regrets over his decision to build a career in Iran. “The boom that everyone expected, an explosion of interest and investment, didn’t happen,” he says. “But at the end of the tunnel there’s still light. Friends abroad email me to say, ‘If you see a cool vacancy, let me know.’ ”
The bottom line: An uneven recovery and rising unemployment bode ill for President Rouhani’s chance of securing a second term.