October 19, 2013

OUR ALLY, THEIR ENEMY:

Iran: A changing of the Guards (Najmeh Bozorgmehr, 10/16/13, Financial Times)

[A]t home it is the Guards' commercial empire that causes the deepest worries. Over the past decade, associates of the Guards have profited from $120bn of so-called privatisations to acquire core national assets, notably in the communications sector. This has only strengthened the financial muscle that the Guards had accumulated from their traditional cash cow: taking a hefty cut from imports of consumer goods, believed to range from glass to Maseratis.

But now this new cadre of Sepah-affiliated businessmen, who are considered Iran's oligarchs, will have to overcome a new challenge if they are to preserve their influence.

The victory of Hassan Rouhani in June's presidential election, which many observers say defied the will of the Guards, and the Islamic regime's shift towards support for his more moderate domestic and foreign policies, could prove costly for the corps. Western diplomats say that Iran set out a fresh approach to breaking the impasse over its nuclear programme at talks in Geneva this week.

The new government also seems determined to reduce the Guards' influence and carve out space for private companies that have been suffocated by its operations. Despite holding the world's largest gas reserves and fourth-biggest oil reserves, sanctions over Iran's nuclear programme are crippling the country, stoking inflation and unemployment. Mr Rouhani's government has sensed that economic revival will require an attempt to curtail the influence of the Guards.

"The regime has decided that it needs to improve its image at home and abroad by containing the Guards and allaying concerns that the country is run by military men," says a senior adviser to the government. "The Guards' economic interests have become too big and out of control. They need to be curbed."

Posted by at October 19, 2013 4:24 PM
  

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