On Sept. 17, Iranian Supreme Leader Ayatollah Ali Khamenei called on the Islamic Revolutionary Guard Corps to remain neutral in partisan politics. Speaking before the 20th National Assembly of Commanders and Officials, Khamenei said the corps' duty was to protect the revolution. Rouhani made a similar statement at the assembly, imploring the corps to use its resources and experience to help the Iranian economy, which has deteriorated steadily since the imposition of the latest round of sanctions in 2012.
Righting the economy will require the removal of those sanctions — a task that requires successful negotiations with the United States. And to optimize its bargaining position, Tehran needs the cooperation of the Islamic Revolutionary Guard Corps, which has become one of Iran's major economic stakeholders. Its influence grew particularly rapidly during the 2000s, when Tehran was forced to find more creative ways to circumvent economic sanctions. With its vast experience in foreign operations, the corps was able to assist the government in this regard, and it profited greatly from its assistance.
By requesting the corps' help in reviving the economy, Rouhani is following in the footsteps of his mentor, former two-term Iranian President Ayatollah Ali Akbar Hashemi Rafsanjani, who gave the corps' a leading role in the country's reconstruction efforts after the Iran-Iraq War (1980-1988). Like Rafsanjani, Rouhani hopes that the corps will help improve the economy after eight years of mismanagement and economic sanctions.
Rouhani does not intend to allow the corps to completely dominate the economic affairs of the Islamic republic. He has put together a team of respected technocrats who are experienced in economic and financial matters for his Cabinet, including Oil Minister Bijan Namdar Zangeneh, Economy Minister Ali Tayebnia, Industry Minister Mohammad Reza Nematzadeh and Energy Minister Hamid Chitchian.
These officials are expected to push for market-oriented reforms that will complement the corps' ability to circumvent sanctions. They intend to undo the damage of the Ahmadinejad administration, which drained government funds and gave little oversight to the corps' financial operations.
This will help Tehran as it negotiates with the United States. It would like to appear more financially sound than is generally believed, and it would like to show Washington that it has made progress in its ability to generate revenue and via better fiscal management.
Curbing the Corps' Power
However, Rouhani has a political angle in his courtship of the Islamic Revolutionary Guard Corps. Giving the group a stake in his administration's economic policies is one way the president can try to normalize the balance of state power. It is also a means for placating the concerns of the corps that the logical outcome of improving economic conditions will be a decline of their clout, especially down the line when foreign companies begin to invest in the country.
Stratfor has long documented how the factionalism of Iranian politics has enabled to the corps to gain power. Its rise began during the administration of former President Mohammed Khatami (1997-2005), when the corps sided with the supreme leader and the clerical establishment to counter reformist domestic and foreign policies that were seen as detrimental to the country.
Backed by the corps-led security establishment, the clerics facilitated the rise of Mahmoud Ahmadinejad, a conservative whom they believed would harmonize the regime. Ahmadinejad's presidency did the opposite, effectively weakening the regime. Like the clerics, the former president used the corps to secure support for the executive branch, and in doing so he further politicized the group.
The Green movement, triggered by Ahmadinejad's controversial re-election in 2009, brought the corps even deeper into domestic politics when it was given control over domestic security. Moreover, several retired corps commanders were appointed to key Cabinet posts, particularly in Ahmadinejad's second term.
Notably, veterans of the Islamic Revolutionary Guard Corps do not necessarily represent the interests of the serving generals. And there are political divisions within the corps itself. The corps' legitimacy is derived from the clerics, and considering Iran has a separate, conventional armed forces, there has always been civilian supremacy over the military.
But civilian control has slowly eroded. Because of the role it played in protecting the state against internal opposition — and because of the role it played in Iran-Iraq War — the corps was able to able to gain control of some economic sectors, including industry, construction and oil. And the chaos of the Ahmadinejad administration helped the corps become the most powerful political entity in the country.
Rouhani wants to curb the group's power — and not just by providing additional economic incentives to the corps. The president will try to restore the balance between the clerical establishment and the democratically elected institutions, especially the executive branch. Working with the clerical establishment, he hopes to strengthen the power of the elected government, as do virtually all the stakeholders in the regime, which has dissatisfied the Iranian public.
Already there are efforts underway to grant greater freedoms in civil society and to improve the economy. The latter requires reducing tensions with the United States, with which there is an ongoing diplomatic effort involving Iran's nuclear program and the crisis in Syria.
Judging by the decline in confrontational rhetoric from its commanders, the Islamic Revolutionary Guard Corps supports this plan. The corps understands the need for diplomacy and the need to move away from factional infighting. It also understands that Iran needs to halt and eventually reverse its economic decline. As it happens, the interests of the state align with the interests of the corps.
Unlike the previous two presidents, Rouhani is someone the corps has worked with before. That he is a centrist with decades of experience in governance and policy-making, especially in terms of national security and foreign policy, gives Rouhani considerable leverage. In addition to giving the corps a lead role in reviving the economy, Rouhani had Khamenei appoint a former head of the group's naval forces, Rear Adm. Ali Shamkhani, as the head of the Supreme National Security Council — the first time a corps veteran has served in the post. Though Rouhani has given responsibility for the nuclear issue to another former associate, Foreign Minister Javad Zarif, Shamkhani will also play a key role on the issue and other foreign policy issues, especially any bilateral talks with the United States.
Between his past relationship with the corps and the new one he is now forging, Rouhani is in a decent position to rebalance civil-military relations. Given Iran's dire economic circumstances, the corps will also cooperate on the economic front. However, the group will not want to see their institution's economic clout weaken once investment begins to trickle in, so Rouhani's problems will remain even if he achieves some diplomatic success.