This article was first published on the Stratfor website.
The author, George Friedman, is chairman and CEO of Stratfor, the
world’s leading online publisher of geopolitical intelligence. 

Speaking of the situation in Iran, U.S. President Barack Obama said
June 26, “We don’t yet know how any potential dialogue will have been
affected until we see what has happened inside of Iran.” On the surface
that is a strange statement, since we know that with minor exceptions,
the demonstrations in Tehran lost steam after Iranian Supreme Leader Ayatollah Ali Khamenei called for them to end and security forces asserted themselves. By the conventional wisdom,
events in Iran represent an oppressive regime crushing a popular
rising. If so, it is odd that the U.S. president would raise the
question of what has happened in Iran.

In reality, Obama’s point is well taken. This is because the real struggle in Iran has not yet been settled, nor was it ever about the liberalization of the regime. Rather, it has been about the role of the clergy — particularly the old-guard clergy — in Iranian life, and the future of particular personalities among this clergy.

Ahmadinejad Against the Clerical Elite

Iranian President Mahmoud Ahmadinejad ran his re-election campaign against the old clerical elite,
charging them with corruption, luxurious living and running the state
for their own benefit rather than that of the people. He particularly
targeted Ali Akbar Hashemi Rafsanjani, an extremely senior leader, and
his family. Indeed, during the demonstrations, Rafsanjani’s daughter
and four other relatives were arrested, held and then released a day
later.

Rafsanjani represents the class of clergy that came to power in
1979. He served as president from 1989-1997, but Ahmadinejad defeated
him in 2005. Rafsanjani carries enormous clout within the system as
head of the regime’s two most powerful institutions — the Expediency
Council, which arbitrates between the Guardian Council and parliament,
and the Assembly of Experts, whose powers include oversight of the
supreme leader. Forbes has called him one of the wealthiest men in the
world. Rafsanjani, in other words, remains at the heart of the
post-1979 Iranian establishment.

Ahmadinejad expressly ran his recent presidential campaign against
Rafsanjani, using the latter’s family’s vast wealth to discredit
Rafsanjani along with many of the senior clerics who dominate the
Iranian political scene. It was not the regime as such that he opposed,
but the individuals who currently dominate it. Ahmadinejad wants to
retain the regime, but he wants to repopulate the leadership councils
with clerics who share his populist values and want to revive the
ascetic foundations of the regime. The Iranian president constantly
contrasts his own modest lifestyle with the opulence of the current
religious leadership.

Recognizing the threat Ahmadinejad represented to him personally and
to the clerical class he belongs to, Rafsanjani fired back at
Ahmadinejad, accusing him of having wrecked the economy. At his side
were other powerful members of the regime, including Majlis Speaker Ali
Larijani, who has made no secret of his antipathy toward Ahmadinejad
and whose family links to the Shiite holy city of Qom give him
substantial leverage. The underlying issue was about the kind of people
who ought to be leading the clerical establishment. The battlefield was
economic: Ahmadinejad’s charges of financial corruption versus charges
of economic mismanagement leveled by Rafsanjani and others.

When Ahmadinejad defeated Mir Hossein Mousavi on the night of the
election, the clerical elite saw themselves in serious danger. The
margin of victory Ahmadinejad claimed might have given him the
political clout to challenge their position. Mousavi immediately
claimed fraud, and Rafsanjani backed him up. Whatever the motives of
those in the streets, the real action was a knife fight between
Ahmadinejad and Rafsanjani. By the end of the week, Khamenei decided to
end the situation. In essence, he tried to hold things together by
ordering the demonstrations to halt while throwing a bone to Rafsanjani
and Mousavi by extending a probe into the election irregularities and
postponing a partial recount by five days.

The Struggle Within the Regime

The key to understanding the situation in Iran is realizing that the past weeks have seen not an uprising against the regime,
but a struggle within the regime. Ahmadinejad is not part of the
establishment, but rather has been struggling against it, accusing it
of having betrayed the principles of the Islamic Revolution. The
post-election unrest in Iran therefore was not a matter of a repressive
regime suppressing liberals (as in Prague in 1989), but a struggle
between two Islamist factions that are each committed to the regime, but opposed to each other.

The demonstrators certainly included Western-style liberalizing
elements, but they also included adherents of senior clerics who wanted
to block Ahmadinejad’s re-election. And while Ahmadinejad undoubtedly committed electoral fraud to bulk up his numbers, his ability to commit unlimited fraud was
blocked, because very powerful people looking for a chance to bring him
down were arrayed against him.

The situation is even more complex because it is not simply a fight between Ahmadinejad and the clerics,
but also a fight among the clerical elite regarding perks and
privileges — and Ahmadinejad is himself being used within this
infighting. The Iranian president’s populism suits the interests of
clerics who oppose Rafsanjani; Ahmadinejad is their battering ram. But
as Ahmadinejad increases his power, he could turn on his patrons very
quickly. In short, the political situation in Iran is extremely
volatile, just not for the reason that the media portrayed.

Rafsanjani is an extraordinarily powerful figure in the
establishment who clearly sees Ahmadinejad and his faction as a mortal
threat. Ahmadinejad’s ability to survive the unified opposition of the
clergy, election or not, is not at all certain. But the problem is that
there is no unified clergy. The supreme leader is clearly trying to
find a new political balance while making it clear that public unrest will not be tolerated.
Removing “public unrest” (i.e., demonstrations) from the tool kits of
both sides may take away one of Rafsanjani’s more effective tools. But
ultimately, it actually could benefit him. Should the internal politics
move against the Iranian president, it would be Ahmadinejad — who has a
substantial public following — who would not be able to have his
supporters take to the streets.

The View From the West

The question for the rest of the world is simple: Does it matter who
wins this fight? We would argue that the policy differences between
Ahmadinejad and Rafsanjani are minimal and probably would not affect
Iran’s foreign relations. This fight simply isn’t about foreign policy.

Rafsanjani has frequently been held up in the West as a pragmatist
who opposes Ahmadinejad’s radicalism. Rafsanjani certainly opposes
Ahmadinejad and is happy to portray the Iranian president as harmful to
Iran, but it is hard to imagine significant shifts in foreign policy if
Rafsanjani’s faction came out on top. Khamenei has approved Iran’s
foreign policy under Ahmadinejad, and Khamenei works to maintain broad
consensus on policies. Ahmadinejad’s policies were vetted by Khamenei
and the system that Rafsanjani is part of. It is possible that
Rafsanjani secretly harbors different views, but if he does, anyone
predicting what these might be is guessing.

Rafsanjani is a pragmatist in the sense that he systematically has
accumulated power and wealth. He seems concerned about the Iranian
economy, which is reasonable because he owns a lot of it. Ahmadinejad’s
entire charge against him is that Rafsanjani is only interested in his
own economic well-being. These political charges notwithstanding,
Rafsanjani was part of the 1979 revolution, as were Ahmadinejad and the
rest of the political and clerical elite. It would be a massive mistake
to think that any leadership elements have abandoned those principles.

When the West looks at Iran, two concerns are expressed. The first
relates to the Iranian nuclear program, and the second relates to
Iran’s support for terrorists, particularly Hezbollah. Neither Iranian
faction is liable to abandon either, because both make geopolitical
sense for Iran and give it regional leverage.

Tehran’s primary concern is regime survival,
and this has two elements. The first is deterring an attack on Iran,
while the second is extending Iran’s reach so that such an attack could
be countered. There are U.S. troops on both sides of the Islamic
Republic, and the United States has expressed hostility to the regime.
The Iranians are envisioning a worst-case scenario, assuming the worst possible U.S. intentions, and this will remain true no matter who runs the government.

We do not believe that Iran is close to obtaining a nuclear weapon,
a point we have made frequently. Iran understands that the actual
acquisition of a nuclear weapon would lead to immediate U.S. or Israeli
attacks. Accordingly, Iran’s ideal position is to be seen as developing nuclear weapons,
but not close to having them. This gives Tehran a platform for
bargaining without triggering Iran’s destruction, a task at which it
has proved sure-footed.

In addition, Iran has maintained capabilities in Iraq and Lebanon.
Should the United States or Israel attack, Iran would thus be able to
counter by doing everything possible destabilize Iraq — bogging down
U.S. forces there — while simultaneously using Hezbollah’s global reach to carry out terror attacks. After all, Hezbollah is today’s al Qaeda
on steroids. The radical Shiite group’s ability, coupled with that of
Iranian intelligence, is substantial.

We see no likelihood that any Iranian government would abandon this
two-pronged strategy without substantial guarantees and concessions
from the West. Those would have to include guarantees of
noninterference in Iranian affairs. Obama, of course, has been aware of
this bedrock condition, which is why he went out of his way before the
election to assure Khamenei in a letter that the United States had no
intention of interfering.

Though Iran did not hesitate to lash out at CNN’s coverage of the
protests, the Iranians know that the U.S. government doesn’t control
CNN’s coverage. But Tehran takes a slightly different view of the BBC.
The Iranians saw the depiction of the demonstrations as a democratic uprising against a repressive regime as a deliberate attempt by British
state-run media to inflame the situation. This allowed the Iranians to
vigorously blame some foreigner for the unrest without making the
United States the primary villain.

But these minor atmospherics aside, we would make three points.
First, there was no democratic uprising of any significance in Iran.
Second, there is a major political crisis within the Iranian political
elite, the outcome of which probably tilts toward Ahmadinejad but
remains uncertain. Third, there will be no change in the substance of
Iran’s foreign policy, regardless of the outcome of this fight. The
fantasy of a democratic revolution overthrowing the Islamic Republic —
and thus solving everyone’s foreign policy problems a la the 1991
Soviet collapse — has passed.

That means that Obama, as the primary player in Iranian foreign affairs, must now define an Iran policy — particularly given Israeli Defense Minister Ehud Barak’s meeting in
Washington with U.S. Middle East envoy George Mitchell this Monday.
Obama has said that nothing that has happened in Iran makes dialogue
impossible, but opening dialogue is easier said than done. The
Republicans consistently have opposed an opening to Iran; now they are
joined by Democrats, who oppose dialogue with nations they regard as
human rights violators. Obama still has room for maneuver, but it is
not clear where he thinks he is maneuvering. The Iranians have
consistently rejected dialogue if it involves any preconditions. But
given the events of the past weeks, and the perceptions about them that
have now been locked into the public mind, Obama isn’t going to be able
to make many concessions.

It would appear to us that in this, as in many other things, Obama will be following the Bush strategy — namely, criticizing Iran without actually doing anything about it. And so he goes to Moscow more aware than ever that Russia
could cause the United States a great deal of pain if it proceeded with
weapons transfers to Iran, a country locked in a political crisis and
unlikely to emerge from it in a pleasant state of mind.