Hassan Rouhani, a former nuclear negotiator, has won an emphatic victory more than 50 percent of the vote – in Iran’s presidential election held on June 15. The electorate obviously endorsed a candidate who had promised to lift the country out of the state of utter despondency that has overtaken it for the most part of the last eight years when international sanctions began to hurt as the value of the country’s currency began to plummet.
Widely regarded as a moderate with a more pragmatic approach towards security and the economy, the newly elected president faces a formidable array of challenges. The economy has stagnated under the weight of sanctions, unemployment among the youth has reached an alarming 40 percent, and the country – one of the biggest oil producers in the world – has reduced oil production in the wake of declining demand from the EU, Japan and other countries. This has led to a drastic decrease in revenues. Banking transactions involving Iranian banks have almost come to a standstill in terms of letters of credit not being opened or accepted.
It is expected that Rouhani will vigorously pursue a more conciliatory policy aimed at constructive engagement with the west on the nuclear issue. Indeed, western capitals have cautiously welcomed Hassan Rouhani’s victory on the premise that it would lead to some breakthrough in the stalemate in negotiations over the nuclear issue. Although Rouhani is committed to pursuing the development of nuclear technology for peaceful uses, he nonetheless demonstrated a willingness to meet the concerns of western countries when in 2004 he agreed to suspend uranium enrichment in return for some concrete incentives.
Since 2004, Iran has slipped into a vicious cycle of poverty resulting in deep-seated acrimony and frustration that threaten to destroy the whole system that the 1979 revolution brought about. It is this fundamental concern of saving the ‘system’ that must be at the core of the policy that the new leadership will unfold – provided the Guardian Council and the supreme leader are persuaded to accept a compulsion-driven flexibility in the nuclear policy.
The growing resentment among the youth of the country – who are not prepared to accept a life of isolation dictated by the demands of an overly regulated state and a regimented society – should most worry the new leadership. The younger population wants integration with the wider world for the economic and social opportunities that such ties would offer. Breaking the impasse on the nuclear issue would help end the country’s isolation and create an environment for rapid socio-economic transformation.
How far can Rouhani go in meeting the demands of international community? Provided he is able to have the supreme leader on board, Rouhani can initiate a dialogue that would allow Iran to produce an acceptable level of uranium enrichment with international safeguards having been instituted after negotiations. Weapon grade enrichment will not be pursued as Iran has repeatedly pledged. The new president is well aware of the sensitivity of the issue as well as the aspirations of the Iranian people on the nuclear issue.
It will be a difficult balancing act for him – navigating through the various demands of national interest, people’s sentiments, international concerns, the desire to achieve a breakthrough and end crippling sanctions and avoid being targeted by his political opponents. But with the supreme leader’s support he can sail through easily as far administration is concerned.
Another problem of enormous importance for the new leader will be how to handle the growing schism between Iran and the Arab world. There is an escalating war of words and ever-deepening mistrust between Iran and its Arab neighbours that centre around perceived or alleged Iranian backing for ethnic movements in parts of the Arab world. This animosity is partly fuelled by western countries and partly by Iran’s support to the rapidly disintegrating Assad regime in Syria. Iran cannot afford to live in a hostile neighbourhood for the sake of extending help to ethnic minorities. Any such prolonged state of distrust bordering on hostility could undermine the country’s strength and vitality. A reappraisal of Iran’s role in Syria, Lebanon and the Gulf has to be undertaken if it is to play a role that is truly compatible with its size and stature.
One decisive advantage that the new president has is the deep yearning for change among the Iranian people, which is what swept Rouhani into the presidency. The supreme leader will certainly take into account the overwhelming urge among the people for more freedom and democracy, and for an end to the policy of confrontation with the west while protecting the country’s right to its nuclear development agenda. It is now for the new leader to translate into action the plan for change that he so vociferously advocated in his election campaign by winning both the Guardian Council and the supreme leader’s support for his vision.
With the second-largest gas reserves and the fifth biggest oil reserves in the world, Iran is on the threshold of change. Failure should not be an option.
The writer is a former ambassador.

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