Rowhani’s first 100 days

President-elect Hassan Rowhani will assume office on August 3 with a mandate thanks to his decisive first round election victory on June 14. But in his first 100 days, Rowhani will face a daunting agenda: he must address a struggling economy, form a unity government, send the right signals abroad, and start rebuilding the regime’s legitimacy. Most importantly, he must convince Supreme Leader Ayatollah Khamenei that his agenda is worth blessing.

Rowhani’s top concern will be Iran’s economy. The new administration is tasked with reversing years of mismanagement and, as Rowhani puts it, "brutal pressures exerted on us externally." Indeed, Rowhani has already begun the hard work of curbing expectations. On July 14, he told the Majlis, Iran’s parliament, that Iran’s economic situation was far worse than the current administration dared admit. 

Speaking to lawmakers, the president-elect placed the country’s inflation rate at 42 percent — challenging the official rate of 32 percent. For the first time since the Iran-Iraq war in the 1980s, he said the country’s economy has contracted for two consecutive years. Iran’s most recent budget is also a source of concern. "When we look at the budget figures and compare them to the reports prepared by the Office of Management, we discover that the budget articles are far from implementable," Rowhani revealed.

Major impediments include the currency’s volatility and loss of value, severely restricted revenue from diminished oil exports, and costly welfare expenses like subsidies. Sanctions have handicapped the country’s central bank and some industries. Today, Iran is a pariah among global financial institutions; sanctions have forced the country to barter for goods instead of collect hard currency.

Fixing the economy is further complicated in that Rowhani does not have a key organization at his disposal. In 2007, President Mahmoud Ahmadinejad forced dozens of seasoned economists into early retirement when he dissolved the Management and Planning Organization — one of Iran’s relatively independent institutions responsible for preparing the country’s budget.

Rowhani will need a reliable cabinet to address issues like the economy. It’s too soon to tell who the favorites are but he will most likely choose veteran politicians from the Executive of Construction Party — a center-right party founded in 1996 by members of former president Hashemi Rafsanjani’s cabinet. Many of these individuals have weathered political storms going back to the 1980s and, for the most part, are trusted by the Supreme Leader. If Rowhani wants to leverage his mandate, he may even challenge the Majles to approve Khatami-era officials who are distrusted by hard-line conservatives.

While campaigning, Rowhani promised a unity government that will utilize "all knowledgeable and able experts regardless of their political affiliation." He told parliament this month that the country’s condition must be reassessed. Akbar Torkan, the head of the presidential transition team, was assigned to prepare a comprehensive report and form committees focused on the economy, foreign policy, domestic politics, and socio-cultural issues. Each consists of 20 sub-committees that have asked for guidance from "500 experts, scholars, experienced politicians from the executive and legislative branches, and independent organizations." Based on these recommendations, Rowhani will send his cabinet list to the Majlis on August 4.

If lifting sanctions is a priority, Rowhani will quickly replace Saeed Jalili as Iran’s nuclear negotiator. The style and tone of any new negotiator will be a key signal to anxious foreign powers. And so the appointment will carry as much weight — if not more — than some cabinet posts because it is key to relieving Iran’s isolation and economic problems. Former Foreign Minister Ali Velayati is an ideal candidate for the position. He performed poorly in this year’s presidential election but still gave voters the most memorable episode of the race.

During the final debate, Velayati — who also serves the Supreme Leader as a top foreign affairs advisor — blindsided Jalili for his performance as a negotiator: "You have to move forward step by step … You can’t say we will take an inch and you [Western powers] lift all the sanctions … Let’s say you want to purchase a drinking glass. The shopkeeper tells you 100 tomans, and you say how about you give it to me for 2 tomans. He’ll ask you to stop wasting his time."

Velayati could serve as Iran’s top negotiator with the trust of both Rowhani and Khamenei. The nuclear file may even be taken away from the National Security Council and held instead by the president’s office, a source close to Rowhani told the Iranian press. Major decisions will still be cleared by the Supreme Leader, however the move could give Rowhani more room to maneuver.

Western powers want to see if Rowhani can create movement where there has only been inertia. Jalili was known for not giving an inch, so whoever replaces him must make a good first impression. For a president focused on the economy, changing the tone at the negotiating table is essential because new sanctions are not out of the question. Rowhani promised voters he would secure Iran’s nuclear rights and improve relations with the world. These two issues are inseparable.

Rowhani may also be expected to "rebalance the system." He will renew his office’s deference to the Supreme Leader and coordinate more with the Majlis, which he promised to do during the July 14 meeting. Ahmadinejad disrespected both and sought to enhance the executive branch’s power at their expense. Rowhani, by contrast, is a product of the system and a firm believer in it. He will do his best to rebuild trust among institutions and, in his first 100 days, will likely start with symbolic outreach.

Over time, minor improvements in press freedoms and broader human rights concerns are possible. However, the issue of political prisoners is troublesome. Khatami has already requested their release from the president-elect. To be successful, Rowhani will have to satisfy conservatives and Khamenei, while asking for mercy on the "seditionists" — a term used by traditional conservatives to describe leaders of the Green Movement.

When Rowhani was asked about his view on the house arrest of Mir Hossein Mousavi and Mehdi Karroubi during the campaign, he responded, "I think it’s possible to bring about a condition, over the next year, in which not only those under house arrest but also those who have been imprisoned after the 2009 election would be released." Rowhani has to be tactful in delivering this promise. Moving too fast may bring about the wrath of conservatives and moving too cautiously will result in losing popular support. Restoring the system’s legitimacy with a lighter hand and competent management is an unstated but obvious goal of the new administration.

Unity (Etehad) was the buzzword after Rowhani’s victory. During the campaign, all candidates called for it and the Ayatollah demanded it. It’s up to the president-elect now to capitalize on it. Paradoxically, Khamenei presents the biggest challenge to Rowhani’s administration. Thus far the Supreme Leader seems supportive but cautious. Khamenei asked public officials to assist the incoming government and "facilitate cooperation by promoting unity," while warning about "too many hasty and unreasonable demands.

The regime is a "ship" and the Supreme Leader is its captain, Khamenei likes to say. Rowhani will do his best to keep the ship from rocking and its captain content. The Supreme Leader will not tolerate a complete suspension of nuclear enrichment or any direct challenge to his office. As long as Rowhani does not cross these redlines, his relationship with the Ayatollah will remain cordial enough to pursue his agenda at home and abroad.

Reza H. Akbari (@rezahakbari) is an independent analyst based in Washington, DC. Matthew M. Reed (@matthewmreed) is a Middle East specialist at Foreign Reports, Inc..