JCPOA and Two Different Choices: Easternism or Westernism?

Recent statements by Eshaq Jahangiri, the first vice president of Hassan Rouhani, indicate that "today's society faces serious economic, cultural, and foreign policy problems." This aligns with the World Bank experts' views on Iran's dilemma between two models of modernization: moving towards a free economy and an open political society, or continuing a single-product economy (relying on oil), with government intervention in all matters and keeping society closed like the authoritarian regimes before the fall of the Soviet Union. At the end of June, David Lipton, the first deputy managing director of the International Monetary Fund, elaborated on Iran's choice in a conference at the Carnegie Foundation in Washington regarding the post-JCPOA situation: the Eastern European model after the collapse of the Soviet Union or maintaining a closed political system and continuing a state economy until the end. Lipton's remarks are significant because he had visited Iran prior to his speech at Carnegie and had comprehensive discussions with officials from private banks and the economic authorities of the Islamic Republic regarding the government's financial and economic problems. During his stay in Iran, he mentioned the IMF's readiness to enhance Iran's economic position and private banks if they adhere to global standards and avoid money laundering. In contrast to Jahangiri's statements, which indicate the government's inability to move towards modernization and experience a more open economy and society, Rahim Jafari, the commander of the IRGC, claimed that "all imperialist services are mobilized against the Islamic Revolution," openly criticizing the nuclear negotiations and the government's efforts to approach the West, emphasizing that "they think they can solve economic problems through negotiations." The direct and mutual criticism between Hassan Rouhani and Tehran Mayor Bagher Ghalibaf is the latest example of the ongoing efforts of government Westernizers against the tendencies of principlists who favor an Eastern outlook in the Islamic governance. The JCPOA, even before reaching phases 2 and 3 or beyond, as Hassan Rouhani had promised, provided an opportunity for the transformation of the ruling system and distancing the religious government of Tehran from the revolutionary framework and joining the ranks of conventional governments. The comprehensive nuclear agreement, despite the criticisms it faces, provided opportunities for renewing Iran's worn-out economic infrastructure. The government's acceptance of new commitments to avoid money laundering, efforts to align Iranian banks with the global banking system, and the announcement of readiness to modernize land and air communication tools using Western capacities; the agreement to purchase one hundred passenger planes from France and Italy, and the agreement to modernize railways using $4 billion of financial and technical credit from Italy are among the efforts the government has made to utilize post-JCPOA opportunities. The government's intention is to create new attractions for increasing foreign direct investment, particularly in the oil and gas sector, strengthening the private sector, and creating job opportunities for the young and educated generation. Continuing this path, if the closed and state economy is maintained, will not be feasible due to the continuation of rent-seeking and the preservation of tax immunities for quasi-state institutions. While the government strengthens its Western outlook to untie Iran's economic knots, Russia, using the leverage of political, security, and military cooperation after the revolution, despite its more limited financial capacities and outdated technology compared to the West, intends to direct Iran's post-JCPOA trajectory towards the East by increasing economic and commercial cooperation. This latter option enjoys the support and interests of the current leader of the government, military personnel, and anti-Western principlists. The announcement of the approval of export credit related to the construction of a thermal power plant in Bandar Abbas with a capacity of 1400 megawatts by Sergey Donskoy, the Russian Minister of Natural Resources, if implemented, will be the first step towards realizing the plan to build four thermal power plants worth $10 billion by Russia. Russia had previously provided a $7 billion credit for selling technical equipment to Iran and expressed readiness to build an electric railway to connect Garmsar to the Turkmenistan border. Choosing between the two outlooks towards the East or West by Iran, as David Lipton, the senior IMF envoy to Tehran, also addressed in his remarks in Washington, will not be easy and will not happen quickly. Iran, even without showing clear signs, has entered a transitional state after the JCPOA. This transitional state is not limited to economic and financial matters, as seen in Jahangiri's remarks on "problems in foreign policy." Jahangiri was neither able nor deemed it expedient to directly mention the existence of political problems in the country instead of using metaphorical language, while the government, understanding the current situation and being more informed about internal issues, is preparing not to resolve foreign policy problems but for the political era after Ali Khamenei's leadership. Determining the final path of economic changes in Iran may continue until the political conditions of the country stabilize. Accepting this premise, determining the next government leader that the principlists are striving for and will be clarified next spring is the first step towards achieving internal political stability. Ali Khamenei has never hidden his ideological inclination towards avoiding the West and its warm or soft powers (even opposing the teaching of English), while passing through the current transitional state in Iran requires at least coordination among the branches of power and creating diversity and balance internally and in foreign relations.