Mr Rouhani's return

A strong mandate raises the stakes for Iran's president

The resounding electoral victory for the comparative moderate, Hassan Rouhani, in Iran provided an ironic contrast to the meeting between US President Donald Trump and leaders of Saudi Arabia and Gulf states allies, all models of uncompromising dictatorship. Mr Trump and the Republican Party have been fierce opponents of a breakthrough nuclear deal signed between Mr Rouhani and then US President Barack Obama in 2015. The accord ended the decades-long international oil and financial sanctions in return for Iran ending its uranium enrichment programme. Mr Rouhani’s victory with 57 per cent of the ballot in an election with a record turnout of over 70 per cent — requiring many polling stations to stay open till midnight — marked a resounding approval of his achievement of integrating Iran into the global community. His support from Iran’s intensely political and youthful middle class saw off his principal opponent, the hardliner Ebrahim Raisi (38.5 per cent of the vote).

In voting Mr Rouhani a second term, the Iranian people are offering him a chance to deliver on the promises implicit in the nuclear accord — of faster job creation for the country’s 78.8 million people. Although growth has picked up since, from a contraction of 2 per cent in 2015 to 6.4 per cent in 2016, unemployment remains high at 12.7 per cent, and among the youth, who comprise 40 per cent of Iran’s population, it is 30 per cent. Much of Mr Rouhani’s success in shrinking poverty had been the result of a universal cash transfer programme, which, under a 2016-21 development plan, has been replaced by a remarkable reform exercise involving subsidy cutbacks (bread, electricity, and fuel) and targeted cash transfers that eliminated better-off households. With the outlook on oil prices distinctly soft, however, Mr Rouhani’s challenge is to attract global investment that will stoke employment. His Shia Muslim country’s alliance with Russia and deep involvement in the multiple West Asian conflicts, in opposition to traditional US allies, the Sunni Muslim Saudi Arabia, and Israel, complicates the picture. He could be helped by the scheduled departure of the hard-line Supreme Leader Khamenei, who heads a unique institution that dominates Iranian governance.

But his principal test will involve managing the relationship with the US, headed by a hawkish president who has just signed a massive weapons deal with Saudi Arabia. Last week, the Trump administration signed the sanction waivers under the terms of the 2015 deal but it is yet to remove Congress-imposed unilateral sanctions, which are preventing international banks and businesses from investing in the country. All of this provides India an opportunity to strengthen ties with a reformist-minded country with the world’s second-largest oil reserves, building on its steadfast support in the sanctions era by devising an ingenious payment method for oil purchases. Speeding up its work on the Chabahar port would be a good start, and a useful reiteration of geo-political intent at a time when China is moving aggressively ahead with its One Belt One Road initiative.