The Rouhani Era
Iran's new president promises to lift struggling economy and improve ties with the outside world
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UPDATED: August 12, 2013 NO. 33 AUGUST 15, 2013
The Rouhani Era
Iran's new president promises to lift struggling economy and improve ties with the outside world
By Yu Lintao

SUPREME SUPPORT: Iran's newly elected president, Hassan Rouhani (third right), speaks at an endorsement ceremony in Tehran, Iran, on August 3. Iran's Supreme Leader Ayatollah Ali Khamenei (fourth right) officially endorsed Rouhani in a ceremony that day (XINHUA)

Tehran bid farewell to Mahmoud Ahmadinejad with the swearing in of new Iranian President Hassan Rouhani on August 4. Rouhani defeated five rivals in an election campaign bearing the slogan "moderation and wisdom," capturing the expectations of Iranian people that he could change the country's deteriorating economic climate as well as its relationships with the outside world.

However, observers claimed that Rouhani's ability to alter Iran's course is limited, as the current economic climate in Iran is mainly caused by Western sanctions and that it is impossible for Iran to change its position on the nuclear issue. Though the new Iranian president is believed to be more moderate in dealing with Western countries, fundamental changes are unlikely to be achieved between Iran and the West.

Pressing task

Rouhani has inherited from his predecessor a country mired in economic depression and diplomatic dilemmas. The sluggish economy, in particular, has severely affected the livelihood of the Iranian people.

Iran is under substantive political and economic sanctions from the United States and its Western allies due to its controversial nuclear program. The West suspects that Iran's nuclear activities may have military motives while the latter emphasizes its civilian purposes. The sanctions have pushed Iran's inflation rate to more than 30 percent, the unemployment rate has risen to around 20 percent and the country is losing tens of billions of dollars in oil revenues every year.

Many ordinary Iranian people hope that the new president will be able to boost the economy after taking office and raise living standards. If the issue boils down to producing nuclear weapons versus putting bread on the table, ordinary people say they prefer the latter.

Rouhani said during his inauguration ceremony that he will rescue the country's economy, deal with the economic hardships of the people and fight poverty. However, the key to solving the current economic difficulties is easing the Western sanctions.

"For Iran's current economic difficulties of Iran, any small adjustment or amendment is of little help," said Wang Feng, Deputy Director of the International Relations Department of the Institute of West-Asian and African Studies under the Chinese Academy of Social Sciences.

"To change the situation, we should see how the new Iranian president improves relations with the West," Wang told Beijing Review.

As a moderate conservative, Rouhani has pledged to save the struggling economy by improving relations with the international community. During his inauguration, Rouhani admitted Western sanctions have put pressure on the economy and exacted a heavy toll on the country's people.

In the meantime, the new president said Iran would continue to safeguard its own independence and dignity. He stressed the West should engage in dialogue with Iran on a basis of "equal footing" and "mutual respect."

Core problem

The improvement of Iran's economy rests with the lifting of Western sanctions. To do so, Rouhani will have to at least break the deadlock surrounding the nuclear talks with five permanent members of the UN Security Council and Germany. The world powers and the Islamic republic have conducted several rounds of talks concerning the country's sensitive nuclear program, but no agreement has been reached.

Hua Liming, Former Chinese Ambassador to Iran, said that whether the sanctions on Tehran are lifted or not depends on the progress of the Iranian nuclear negotiations, which in turn depends on the attitude of the United States.

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