President Hassan Rouhani is toeing a very fine line: On one hand, he has openly called for the privatization of the Iranian economy which is dominated by the IRGC’s formidable network while on the other hand, he is weary of confronting the IRGC head on since that will essentially pit him against Supreme Leader Ali Khamenei.
The IRGC’s business empire reaches far beyond the military fields which once embodied the organizations main scope. Over the years, and especially under Rouhani’s predecessor, Mahmoud Ahmadinejad, and during the years of global sanctions in Iran, the IRGC expanded its empire to include the fields of construction, telecommunication, oil and gas, finance, infrastructure etc…Huge governmental and private projects are regularly awarded to the IRGC conglomerate of affiliated companies in which, incidentally, Khamenei is sometimes named as a shareholder. Furthermore, the IRGC affiliates such as “Khatam-al Anbiya” also enjoy the special privilege of tax exemptions and there are strict orders by the regime which forbid the monitoring of IRGC affiliates by external agencies. As such, the nature of the ties between the IRGC and the regime is problematic to say the least since the IRGC was born as a military organization dedicated to the preservation of the regime.
The ties between the IRGC and innumerable cases of human rights abuses and links with terroristic activities have led to sanctions which remain in effect following the signing of the nuclear deal. Since the IRGC is so well connected to Iran’s economy, these sanctions are especially worrisome to foreign investors who want to capitalize on Iran’s economic potential but do not want to find themselves in contravention of these sanctions after partnering with the IRGC.
Furthermore, the IRGC has not sat idly by during Rouhani’s presidency: although the IRGC has tacitly supported Rouhani in his efforts to sign the long-awaited nuclear deal which freed Iran of sanctions, IRGC leaders have continuously criticized Rouhani over the years on numerous subjects including the nuclear deal itself. Since the IRGC answers directly to Khamenei himself, it’s obvious that such criticism could not be levelled at Rouhani without Khamenei’s approval or request.
Khamenei is not averse to intervening in all of the aspects of the governing of Iran including the economy. He has maintained, for the last two years, the ideal of the “Resistance Economy” which places a huge emphasis on keeping the Iranian economy free of foreign intervention or influence. The “Resistance Economy” is a part of Khamenei’s strategy to allay his paranoia of a “soft war” in which foreign states would weaken the regime through cultural and economic “infiltration”. The IRGC, of course, fully supports the “Resistance Economy” since it is exactly such an economy that made the IRGC the economic behemoth it has turned out to be. Rouhani, on the other hand, continues to support the ideal of the “Resistance Economy” but he seems to be doing so not out of a real belief in this strategy but because he understands too well that were he to oppose such a strategy, he would find himself, once again, fighting a losing battle against Khamenei.
Rouhani fully understands that clashing directly with the IRGC could easily result in being banned from the upcoming presidential elections since the body which authorizes or disqualifies presidential candidates, the Guardian Council, is an unelected body dominated by the IRGC and Khamenei. Just to make it clear, a spokesman of the Guardian Council has released a statement claiming that Rouhani has still not been officially allowed to run for president next year.
In a strange development, Rouhani has agreed to award plans for “rural development” to the IRGC. Handing over the billion-dollar projects was meant as a means to allow Rouhani to continue with the privatization of the economy while giving the IRGC enough economic clout back. Unfortunately for Rouhani, the IRGC took over these plans, establishing its Progress and Development Headquarters but has not lifted any pressure from expanding in other commercial projects. In fact, Hossein Dehghan, Rouhani’s minister of defense who just happens to be an ex-IRGC commander and the godfather of Hezbollah, has announced that the IRGC will be awarded 50 more huge construction contracts to build highways, dams, gas-fields etc…
The strength and fate of the IRGC is directly correlated to the strength and fate of the regime itself and both are dependent on Islamic Revolutionary ideals and money, lots of money. Rouhani and any other elected president doesn’t have the power to weaken the IRGC nor the regime as long as Tehran is governed at the end of the day by an theocratic dictator whose sole interest is to preserve the status quo of the regime.