Two main external developments marked the years 2019 and 2020 in Iran: the unilateral sanctions re-imposed by the United States in late 2018 after abandoning the Joint Comprehensive Plan of Action (JCPOA), and the COVID-19 Pandemic that had its first case in Iran in February 2020. The heavy burden represented by the combination of both situations severely affected Iran’s economy, its domestic policies and its foreign relations.

Keywords – Iran Politics; Hassan Rouhani; maximum pressure; JCPOA; COVID-19; HOPE.

1. Introduction

The Iranian economy, domestic and foreign policies during 2019 and 2020 were heavily marked by two main external developments. First, the unilateral sanctions re-imposed by the United States in November 2018 compromised the expected economic improvement promised by the signature of the JCPOA (Joint Comprehensive Plan of Action) in 2015. Second, the COVID-19 pandemic affected the whole world, but mainly oil-exporting countries and states either without a well-developed health system or characterized by high social inequities. In all these respects, Iran could not but be particularly vulnerable. While, since Trump’s victory in 2016, a worsening of Iran-US relations was expected, the COVID-19 crisis caught Iran, as, for that matter, the rest of the world, completely by surprise. The combined impact of both the sanctions and the pandemic provoked substantial economic hardship for the Iranian population and their government. The latter failed to guarantee the stability of the currency and the inflation; could not attract foreign investments; and was unable to reduce tensions with the United States and Iran’s neighbouring countries. When the pandemic hit the region, Iran was the second state after the UAE where COVID-19 cases were recorded. Since then, three COVID-19 waves shocked the country, deepening the economic, social, and political crises which powerfully contributed to discredit the incumbent Rouhani’s administration.

In the three following sections, the impact of this combination of economic sanctions and pandemic-induced shock on the Iranian economy and society, and on its domestic and foreign policies will be analyzed.

2. Economy and society

The Iranian economy in 2019 and 2020 was greatly affected by the implementation of the unilateral sanctions by the US administration in November 2018, following President Donald Trump’s decision to abandon the Comprehensive Plan of Action (JCPOA). Besides, the COVID-19 pandemic worsened the already negative situation of the Iranian oil industry. The reduction of the economic activity, initially in China and then in the whole world, provoked a drastic drop of both Iranian exports and oil prices worldwide. Iranian oil sales went down to almost to zero in the middle of the year 2020. This was coupled by the drastic fall in oil prices, due to the drop in world demand, which hindered any chance for the Iranian state to compensate the loses due to US pressure on Iranian oil buyers.

2.1. The financial-economic situation

The economic indicators kept showing negatives figures during 2019 and 2020 due to both the US-imposed sanctions and the COVID-19 pandemic. According to World Bank estimations, compiled by Statista, the Iranian GDP growth plummeted from its highest rate – 12.52% in 2016, a result of the implementation of the JCPOA – to negative figures for three consecutive years: -5.42%, -6.51%, and -4.99%, in 2018, 2019 and 2020 respectively. The same estimations suggest, however, a 3.16% increase for 2021.1 The December 2020 World Bank Economic Monitor report portrays a challenging future ahead, because of the effects of the “triple-shock of sanctions, oil market collapse, and COVID-19”. The report highlights the three years of recession that the Iranian economy has passed through and how this provoked high inflation and depreciation of the Iranian currency. It also highlights how the decline in governmental revenues, caused by the reduction of oil exports, drove to extensive debt issuance to meet the state needs.2

Due to these economic constraints, triggered by external factors as well as the lack of efficient economic reforms implemented by the Rouhani administration, the inflation rate remained within the two digits along the two years under review, with figures that reached more than 50% monthly in 2019, even before the breakout of the pandemic. Table 1 also shows how, despite reducing the inflation rate to less than 20% in April 2020, the year ended with a very preoccupying rise of 44.8%.3

Unemployment was not severely affected by the sanctions/pandemic combination: the official figures show a decline from 12.4% in 2018 to 11.38% and 11.18% for 2019 and 2020, respectively.4

The dollar-rial (US$-IRR) exchange remained a source of concern for both the government and the people, since foreign currency is still the main instrument not only in foreign trade, but in household savings. 2019 started with a dollar at 112,000 rials, and reached a first but not alarming peak of 156,500 by 9 May. The exchange remained stable at around IRR 120,000 for US$ 1 for the whole year. From 22 February 2020, after the first case of COVID-19 was reported in Qom, the US dollar price started to rise, reaching IRR 255,000 for US$ 1 on 18 July, to further rise to IRR 322,000 for US$ 1 on 15 October 2020. The year 2020 ended with a US dollar at 258,500 Iranian rials, having more than doubled since the beginning of the two-year period covered in this article.5

The price of Iranian oil varied greatly throughout 2019 and 2020 due to external constraints as well. The Iran heavy crude oil was sold at 48.34 US dollars per barrel on 2 January 2019, reaching a peak of 69.9 in April of the same year, then keeping a relative stability, without reaching the 81 US dollars of the previous year. Due to the reduction of economic activity, caused by the COVID-19 pandemic, China, the leading oil importer from the Persian Gulf region, including Iran, drastically reduced its oil demand. The same policy was followed by other consuming countries. The demand reduction provoked an excess of oil supply and offer, which drove to a drastic decline in oil prices starting in February 2020. Thus, the Iranian heavy oil dropped to the minimum of 15.87 US dollars per barrel by 28 April. The price recovered until mid-August, reaching US$ 40. The second COVID-19 wave, however, slowed down the rise of the price, preventing Iranian heavy oil from reaching more than US$ 48 per barrel by the end of 2020.6

The impact of the twin constraints over Iranian oil exports seems to be more problematic to assess. US sanctions forced the Iranian authorities to find a way to continue the oil supply to Iran’s international partners, avoiding the blockade of Iranian tankers carried out both by the US and its allies, abiding by the sanctions. In this the Iranian authorities were not always successful, as shown by cases such as the seizure by the US Navy in July 2020 of four tankers heading to Venezuela, carrying 1.1 million barrels;7 and the temporary seizure of an Iranian tanker bound to Syria, in Gibraltar, by the United Kingdom Royal Navy.8

In its Annual Report 2020, the Organization for Petroleum Exporting Countries (OPEP) stated, on the basis of official data provided by the Iranian government, that Iran exported 651,100 barrels per day during 2019. This figure is lower than the 1.8 million per day reported in 2018, and still lower than the 2.5 million exported before the sanctions in 2017; nonetheless is far from the zero barrel per day expected by the Trump administration.9 The official data for 2020 was not available at the closing of this article, but different estimations show that Iran may have successfully circumvented the sanctions, exporting an average of 1 million barrels per day during 2020.10 It has also been reported that the Iranian government was able to bypass the strict surveillance of the tankers by disabling the trackers they have onboard, which means that Iran’s real oil exports are possibly much higher than officially estimated.11

The Iranian public perception of the economic situation does not seem to have changed drastically as a result of the worsening of the economic indicators mentioned above. The IranPoll and Maryland University periodic surveys conducted within Iran only showed a minor change in the Iranian people’s mood, which was already pessimistic. Thus, while in April 2018 – a month before the US pulled out from the JPCOA – 72% of the respondents answered that the economic situation was bad, the figure remained the same in the six surveys conducted up to February 2021, when that figure slightly increased to 74%. The same can be said about the answer concerning the development of the economic situation. In this case, the proportion of those judging it to be worsening rose from 64% in 2018 to 68% at the beginning of 2021. Interestingly, the same poll shows that the majority of the Iranian people’s (58%) think the most important factors negatively impacting on the Iranian economy are local economic mismanagement and corruption, while only 35% blame foreign sanctions and pressure.12

2.2. COVID-19 and the Iranian economy and society

The first COVID-19 case in Iran was officially reported on 19 February 2020, with the first two positive cases in Qom, which were also the first two recorded casualties caused by the coronavirus in the Middle East.13 The Ministry of Health informed later that both cases were businessmen who had travelled to China, although it had initially been reported that the victims were two elderly people. Alternative sources, such as a report released by the BBC, dated the first case a month earlier, on 22 January, but without providing consistent evidence apart from the information delivered anonymously by Iranian hospital personnel.14 Two days after those first official cases, on 21 February, two more deaths and 13 new cases were reported in Qom, Tehran, and Gilan, which indicated the fastness with which the disease had spread all over the country in a brief period.

The lack of transparency in the information initially provided by the government and the absence of strict initial confinement measures – contrary to what had been happening in other countries in the region at the same time – were the main reasons the Iranian authorities received criticism for. The lack of strict confinement measures at the early stages of the pandemic – such as the ones taken by Italy, imposing a generalized national lockdown – and the government’s lack of transparency about the actual situation caused concern and criticism among the Iranian people. The Iranian government avoided imposing a lockdown on both the city of Qom, which was the focal point of the pandemic in Iran and later in the whole region, and Tehran, the most populated megalopolis in the Persian Gulf area. Traveling within provinces was discouraged; however, severe restrictions were avoided before the annual Nowruz15 celebrations, which traditionally start on 21 March. In this period, which usually includes one or two weeks holidays, most Iranians, mainly those from the capital city, travel within the country and abroad. It was only by 20 March that the government decided to cancel public gatherings, close mosques, shrines, schools, universities, bazaars, and malls, and limit the movements between provinces, following the decision taken by the Task Force to Combat Coronavirus.16 The measures, however, were widely criticized because the Iranians are heavily reliant on informal economic and commercial activities. In big cities like Tehran, large-scale gatherings and movements of people are an essential part of daily economic life.

Security checkpoints were installed on several roads along the country to discourage people from traveling; however, the controls were not strict enough, and the movement limitation efforts were not as efficient as expected. Despite their shortcomings, however, the capital witnessed a clear and drastic reduction in the daily movement of people.

At first, the government’s response to the pandemic had appeared to be fast. In fact, on 20 February, one day after the first case was reported, the government spokesman and the assistant to the president in social communications, Ali Rabiei, announced the creation of the Task Force to Combat Coronavirus, headed by President Rouhani. It was composed of the ministers of Health, Interior, Tourism, the Government Speaker, and representatives of the Armed Forces.17 Its performance, however, was not as fast as the situation required since the first measures of social distancing, movement limitations, and lockdown were announced only on 20 March.18 The initial measures lasted until 8 April, when a step-by-step reopening of low-risk businesses and activities was ordered. By 27 April, all international borders had been reopened, and by 26 May, most businesses and religious sites were also allowed to again open their doors.

Like it happened with other countries that suffered from the pandemic, and despite the limitations represented by the crippling US sanctions and the reduction of oil prices and oil exports, the government implemented strong fiscal and monetary measures to reactivate the economy and to help households to cope with the effects of the pandemics. Extra funding was injected into the health sector, and cash subsidies were distributed to the population, together with subsidized loans to small and medium-sized businesses. Additionally, a three-month tax moratorium was implemented. By mid-August, the Iranian National Development Fund had distributed around US$ 245 million in aid to business owners.19

The Iranian Central Bank also announced specific allocations of funds to import medicines and a diverse set of monetary policies aimed at facilitating daily commercial transactions, hampered by the lack of liquidity due to the reduction of economic activities. The Central Bank also injected US$ 1.5 billion into the exchange market to contain the fall of the Iranian currency.20

Despite the priority given to the economy, the fight against the pandemic was not successful as expected by the authorities. The first wave of March and April reached a peak of 3,186 new daily infections, registered on 30 March, and 158 daily deaths, reached by 4 April. These figures positioned Iran among the top ten countries with the worst COVID-19 figures worldwide. The figures of the second and third waves in June and September 2020 were even worse. The peak of new daily infections during the second wave was on 4 June with 3,574 cases and 14,051 on 27 November for the third wave. The peak of new deaths registered during the second wave was 235 on 28 July and 483 on 20 November.21 According to some analysts, the significantly reduced number of tests conducted in Iran since the beginning of the pandemic, jointly with the alleged lack of reliability of many of them, might indicate that the actual figures are higher than the official ones.22 Besides, in an Iranian academic article published in July 2020, researchers used statistical data on yearly deaths trends to argue that the excess of deaths compared with other years could be attributed to COVID-19, and that their number was actually higher than what hitherto reported by the government.23

The government implemented stricter measures in late September, to remedy the proven inefficiency of the containment strategies implemented up to that point. The new measures included the mandatory use of masks, with heavy penalties in case of lack of compliance. Besides, the border with Iraq was closed on 7 October to prevent Iranians from performing the Arbaeen pilgrimage, which usually involves millions of Iranian pilgrims moving on foot to Karbala, in Iraq. Finally, six Iranian provinces closed public places such as schools and universities for at least two weeks to flatten the curve of the third wave.24 Deputy Minister of Health Iraj Harirchi also announced, on 9 October, that hospitalization of non-urgent cases was forbidden until further notice. This measure was due to the danger of an imminent collapse of the country’s health institutions, which indeed demonstrated the heavy toll imposed by the pandemic on the whole national health system.25

As early as 2 April 2020, the government announced three different groups had started developing a vaccine made in Iran.26 Additionally, a few days later, the government announced that Iran was producing rapid COVID-19 tests to compensate for the lack of supplies from abroad, due to the US-imposed sanctions.27 By 20 December, Iran officially announced that the state-owned Shifa Pharmed Industrial Group had tested the vaccine, called COVIran Barakat, on animals, while clinical trials on humans had been approved by the administration to start on March 2021.28 In the meantime, the government cooperated with Russia and other countries to co-produce or purchase the vaccines needed by the Iranian population, directly or through the COVAX international initiative created ad hoc to facilitate worldwide access to the vaccines.29 Paradoxically, the Iranian Red Crescent announcement on 28 December30 regarding the supply of 150,000 Pfizer doses donated by charity organizations abroad generated a considerable controversy inside the country, with Supreme Leader Ali Khamenei stating in a public speech on 8 January 2021 that «Imports of U.S. and British vaccines into the country are forbidden… They’re completely untrustworthy. It’s not unlikely they would want to contaminate other nations».31 The same statement was posted on Khamenei’s official Twitter account; nonetheless, the social network removed it due to a violation of its rules.

3. Domestic policy

The most relevant event in the period discussed in the present article was the 11th Legislative Elections. The combined impact of sanctions and the COVID-19 pandemic was visible on the results, participation and, afterward, positions adopted by the new parliament and the political establishment itself. On the one hand, the disappointment of the Iranian population regarding the management of both the economy and foreign policy, mainly in confronting and managing US sanctions, somehow predicted the low turnout and electoral outcome. On the other hand, the outbreak of the pandemic – which, as above remembered, started in the city of Qom shortly before the elections – created controversy. The political establishment was heavily targeted by both the reformist-pragmatic and the conservative camp, demonstrating the importance of Qom as the political epicentre not only for Iran but for the whole region.

3.1. The 2020 Legislative Elections

The 11th Iranian Legislative Elections took place two days after the first case of COVID-19 was reported in the country. On 21 February 2020, 57,918,000 Iranians were called to vote in the first round of the elections. Among the voters, 2,931,000 were first-time voters, who had reached the minimum age of 18, established by the electoral law. The seats up for grab in the Islamic Consultative Assembly (Majlis) were the 290, representing the 31 Iranian provinces, divided among 208 electoral districts (174 single and 34 multiple).32 The most important are those multi-member districts with many seats and political weight at the national level, such as the one for Tehran, Ray, Shemiranat, Eslamshahr and Pardis, which appoints 30 MPs. The fact that these 30 elected seats in the previous elections of 2016 were won by the «List of Hope», which supported President Hassan Rouhani,33 raised expectations that the outcome of the voting in this constituency could be read as a referendum on the incumbent President’s performance. This, as documented also in previous articles in this journal, had been on the whole unsatisfactory, especially due to the few benefits of the nuclear agreement (JCPOA) and the dismal record of the economy, particularly since the reimposed sanctions by the USA in May 2018, which had triggered popular protests.

The complexity of the Iranian electoral system – with the existence of factions and electoral lists but no formal political parties – added to the importance of the Tehran district. Here, the fierce competition among conservative, ultra-conservative, pragmatic, and reformist groups attracts much more attention than in any other districts, due to the implications for the presidential elections, which always take place one year after the legislative elections.34 The existence of multiple lists proposed by the factions and alliances reflects the constant fight to control the elective institutions, mainly among the two principal factions: conservative and pragmatic-reformist. The legislative elections are the main scenario of this dispute.

As happened in previous elections, their «competitiveness» was questioned due to the role exerted by the Guardian Council in charge of the approval/rejection of the aspiring candidates.35 In this case, 16.145 Iranians registered their candidacy, but the Council accepted only 7.148 –44.3% of the applicants. Although this proportion is the lowest since the first legislative election in 1980, it is also true that the number of approved candidates has been the largest since then, being 900 more than in 2016. Also, as shown in Table 3, the number of applications was much higher, being 4,000 more than in the former elections. Accordingly, it is not the «competitiveness» that is in question but the «representativeness» of the selected candidates. In fact, a considerable proportion of the almost 9,000 rejected applicants belonged to the reformist and pragmatic groups. The voluntary withdrawal of some present parliament members from the electoral race, like the reformist Reza Aref, the pro-Rouhani conservative Ali Motahari, and the moderate-conservative Ali Larijani – the incumbent Majlis president – left Rouhani’s supporters without many options in trying to maintain the chamber’s control.

Therefore, it is no surprise that electoral participation was, as foreseen, the lowest in all legislative elections since 1980, barely reaching 42.6%, dropping almost 20 points from the 62% of 2016. Nor was it surprising that the participation in Tehran province was the lowest within the country, with barely 26.2% compared with 50% in 2016. Tehran, together with the districts in the outskirts of the country, like Azerbaijan, Kermanshah, or Kurdistan, often are places where the reformists obtain good numbers. In 2020, the shortage of reformist candidates undoubtedly promoted a drop in electoral participation. However, this has not been the only reason.

An almost direct relation between the rejected candidates’ proportion and the shortage in electoral participation is identifiable in Table 4. It can be observed how the evolution in the participation rate has been declining in proportion (or even more than in proportion) to the rate of rejection by the Guardian Council of the candidates. Only on two occasions, in 1996 and 2016, the participation rate was superior to the rejection rate. In both cases, the reformist and pragmatic candidates won a relative majority of seats in the Majlis. Therefore, the relation between high participation and good results on the part of the reformist forces in the Majlis is evident. Also, it is evident that the insufficient number of reformist and pragmatic candidates in 2020, together with the scarce participation, determined the number of seats won by these groups, which was negligible, being not even 20, compared to the 120-150 won in 2016. 

Here some explanation is due, concerning the indeterminacy of the number of seats won by the reformist and pragmatic candidates (as revealed by the numerical indications given in the preceding lines. This is an indeterminacy generated by the electoral list system itself. Candidates who appear in one or another list do not necessarily have to be affiliated with a particular political group. On certain occasions, especially in Tehran, a given group intending to propose say 30 candidates, but lacking the right personalities to do so, invite to become part of their lists notables without known political affiliation or preference. These candidates can be elected thanks to a «dragging effect» caused by their being part of a given list. Nevertheless, ultimately their election as members of a given list does not mean that they share the conservative or reformist inclinations of the group which put up the list. Personal interviews conducted in Iran in February 2020 confirm that it has never been known for sure how many «reformists» stricto sensu were in the outgoing legislature.

Mohammad Bagher Ghalibaf (also spelled Mohammad Baqer Ghalibaf) – a former conservative mayor of Tehran, with strong connections with the Revolutionary Guard Corps, considered by some as a «technocrat» and by others as «ultra-conservative» – became the leader of the conservative faction in the chamber after obtaining 166 votes in an internal vote within the ‘Islamic Revolution Faction’ – the majority block formed after the elections.

The composition of the Majlis as a result of the 2020 elections shows at least 230 conservative members, 16 reformists, and 30 independents. Therefore, it was not a surprise that Bagher Ghalibaf was elected speaker of the new Majlis on 28 May. He obtained 230 votes out of 267, with the other candidates, Mostafa Mirsalim and Fereydoun Abbasi, obtaining only12 and 17 votes respectively. The conservatives Amir-Hossein Ghazizadeh Hashemi and Ali Nikzad – a former minister under Ahmadinejad – were elected as the first and second deputy parliament speakers with 208 and 196 votes respectively. All the remaining nine members of the Majlis Board also belonged to the conservative camp.

Ghalibaf replaced the veteran former Speaker Ali Larijani, who did not run for re-election. With a parliament controlled by the conservatives, the parliamentary politics took a significant turn in its orientation, moving away from the postulates of the administration of Hassan Rouhani, especially those related to foreign policy. While Rouhani was under intense pressure from the Majlis, which included the possibility of his impeachment, the explicit support that he received from Supreme Leader Khamenei made the members of the parliament refrain from carrying out that threat.

3.2. The impact of COVID-19 over the political establishment

The impact that the COVID-19 pandemic had over the elections, but mainly over the political establishment, is comparable with the impact that it had on the economic situation of the country. To start with, there was wide-spread criticism against the Iranian authorities, who had not cancelled the legislative elections, although the first positive cases had officially been reported two days earlier, as abovementioned. The elections were held without the pandemic threat causing any concern on the part of the authorities and, seemingly, of the society at large, at least in Tehran. However, the 2020 polls had the lowest turnout since 1980, of just 41% in the whole country, and only 21% in Tehran, as previously mentioned. The coincidence of the Iranian elections with the first COVID-19 cases sparked widespread controversies and debates among political authorities, experts and analysts all over the world, debating whether the concern of being infected had resulted in the low turnout. The figures were used by the opposition abroad to criticize the government’s poor performance. However, the bottom line is that there is neither enough evidence to make claims about the possible impact that the gathering of people at the polling stations may have had on the spread of the virus during these initial stages, nor on the possible impact of people’s fear in causing the low participation rate. As argued above, a more credible hypothesis, based on previous elections, is that the massive exclusion of many incumbent reformist candidates together with the disappointing performance of the legislative chamber during its last term were more influential in shaping the people’s decision to cast or not their votes.

During the first couple of months after the first COVID cases had been detected, it was clear that the existing closeness within the Iranian political establishment had to some extent contributed to the spread of the disease throughout the many layers of the Iranian political structure and institutions. Since the very beginning of the pandemic, many members of parliament, of the Rouhani’s government, and of the clerical establishment had been infected by or had died because of COVID-19. Among the high ranking officials that lost their lives were Mohammad Mirmohammadi, member of the Discernment Council; Mohsen Habibi, deputy head of the Judicial Council, and Ahmad Tuyserkani, advisor to Ebrahim Raisi; Hashem Golpayegani, a member of the Assembly of Experts; the high ranking IRGC officials Farzad Tazari, Nasser Shabani and Habib Barzegari; diplomats like Hadi Khosroshahi, Ambassador at the Vatican, and Hossein Sheikholeslam, former Ambassador to Syria; and members of parliament like Mohammad Ali Ramazani Dastak; Fatemeh Rahbar; Mohammad Reza Rahmancheman; Hamid Kahram; and Issa Jafari.

Several members of Hassan Rouhani’s government had also been infected by coronavirus but then recovered, like the two vice-presidents, Masoumeh Ebtekar and Ishaq Jahangiri, as well as members of the cabinet, like Minister of Interior Mostafa Pourmohammadi; Minister of Industry Reza Rahmani; and Minister of Cultural Heritage Ali Asghar Mounesan. Very relevant figures such as Ali Akbar Velayati, foreign policy advisor to the Supreme Leader; Ali Larijani, member of the Expediency Council and former head of the Majlis; and Mohamad Reza Khatami, former deputy speaker of parliament and brother of the former reformist president had also contracted the virus. Finally, around 20% of the incumbent members of parliament also tested positive during the first months of the pandemic. The most publicized case was the one of Iraj Harirchi, vice minister of Health, who appeared on live television with clear signs of the disease before being eventually diagnosed with COVID-19.36

As already noted, the high level of contagion among politicians, officials and clergymen are a clear indication of the close connections that all of them have, regardless of the different political trends they belong to. It also proved the importance of Qom for Iranian and regional politics, since the city became the epicentre of the COVID-19 outbreak in Iran, affecting the entire Iranian political élite, but also some of the neighbouring countries, whose first cases were people infected in the Iranian metropolis. Qom is where the most important Shiite seminars are located, and where politicians, clerics and religious students from Iran and the whole region come to for religious training, pilgrimage and even political discussions. All this prevented the imposition of stricter measures at the beginning of the pandemic, aimed to quarantine Qom in order to prevent the spread of the virus to other cities or even to other countries. This decision actually triggered the second controversy related to the alleged mismanagement of the crisis by the Iranian government.37

3.3. The factional power struggle

In Iran, the electoral processes are considered mechanisms to solve the intra-disputes between the several political factions. As mentioned in a previous section, the legislative elections serve to distribute the parliamentary seats among the different factions, on this occasion with a clear victory of the conservatives. The allocation of non-elective positions, appointed directly by the Supreme Leader or distributed through a combined mechanism of ex-officio appointments – such as in the cases of the members of the National Security Council and the Expediency Council – or nominated by the Majlis and confirmation by the Judiciary – as in the case of the six non-religious scholar members of the Guardian Council – also form part of the struggle for power within the structure of the Islamic Republic.

The two years under review were crucial in determining the composition of some of the institutions of power that would influence the political evolution of the coming year, including the outcome of the presidential elections in June 2021 and, eventually, the designation of the next Supreme Leader of the Islamic Republic. One of the most relevant among these institutions is the powerful Expediency Council. Led first by the late Hashemi Rafsanjani, from 1989 until his death in 2017; then by the also influential Mahmoud Hashemi Shahroudi, until his death on 24 December 2018, since 30 December 2018 Expediency Council has been led by Sadegh Larijani (also known as Amol Larijani), a former head of the Judiciary and member of one of the most powerful political families in Iran. After Larijani became head, with Ibrahim Raisi as deputy, the Expediency Council clearly showed a change in its performance. Since Rafsanjani’s time, the Council had supported pragmatic approaches to both domestic and foreign policies; then, with Larijani’s ascent, the power of the moderate-conservative faction increased.

A few months later, on 7 March 2019, the deputy head of the Judiciary, Ibrahim Raisi, became the head of the Judiciary, replacing Larijani. This appointment was considered a clear signal of Supreme Leader Khamenei’s support to Raisi, either in his presidential career or in his race towards leadership.

With the expected defeat of the reformist and Rouhani’s allies in the 2021 presidential elections, and with the already discussed conservative victory in the 2020 Legislative elections, the political arena in Iran looks more unbalanced towards the conservatives like never before in the last twenty years. Controlling the most powerful institutions – the Supreme Leadership, the Guardian Council, the Expediency Council, the Majlis, and, expectedly, the Presidency – the conservative camp is the arena where the struggle for power between factions will be defined. This does not mean that power will be concentrated in a few or even a single person, but that the competition will be among several conservative and hard-line factions, without the participation of the reformist and pragmatic groups. This is the result of the reformist and pragmatic groups’ loss not only of institutional backings but also of the popular support expressed during elections. Like it happened after Mohammad Khatami’s Presidency, the disappointment of the Iranian population with the reformists’ performance determined per se the fate of the electoral outcome in 2020.

4. Foreign policy

The combined effect of the US re-imposed sanctions and the COVID-19 Pandemic marked Iran’s foreign policy in 2019 and 2020. The pandemic, followed by the «maximum pressure» campaign initiated by the Trump administration, exacerbated the regional tension. They arrived to the brink of war on a couple of occasions, namely the shutdown of a US drone by the Iranian IRGC Air Defence, on 20 June 2019, and the killing of Brigadier Qasem Soleimani in Iraq by a US drone, on 3 January 2020. This escalation also dragged in other regional actors, such as Saudi Arabia and the United Arab Emirates, within the arc of tension.

Other aspects of the Iranian foreign policy, such as the nuclear diplomacy and the HOPE constructive engagement initiative (on which more later), were also affected negatively by the tension with the US. The end of Trump’s term, coinciding with the end of the period covered in this article, brought however a breeze of hope on the future developments of the US-Iran bilateral relations. It is a hope based on the position that the new US president, Joe Biden, has expressed on the nuclear deal abandoned by his predecessor.

4.1. The increasing tension with the US and Saudi Arabia

Following the withdrawal from the JCPOA in May 2018 and the re-imposition of unilateral sanctions in November of that same year, the State Department issued on 2 April 2019 a fact sheet detailing the US «maximum economic pressure» strategy to be followed, with the aim of a new deal negotiated with Iran on the nuclear issue. According to the Trump administration, this new deal was expected to include the other security concerns that the 2015 deal did not mention: the ballistic missile program and the Iranian regional influence. In that document, the US effort in isolating Iran by undermining its oil exports, its access to external revenues, its relations with third countries, and the necessity to «restore» the US deterrence capabilities in front of the perceived regional threat represented by Iran are detailed.38

The ensuing reciprocal accusations and exchange of threats between the Iranian and American governments provoked an escalation that brought to indirect confrontation US and Iran military forces on three occasions along the two years under review.

The first incident occurred on 12 May 2019, when four oil tankers were damaged by unidentified aggressors in the Gulf of Oman anchored close to Fujairah port, in the UAE territorial waters. The tankers belonged to Saudi Arabia, the UAE, and Norway.39 One month later, the second incident took place on 13 June, when two oil tankers were also attacked, again by unidentified aggressors, in the Strait of Hormuz waters. In this case, the vessels were Japanese and Norwegian coming from Saudi Arabia and Emirati ports. The crew of both ships was assisted by American, Iranian, and Emirati rescue services.

These two attacks did not produce any casualties; neither they compromised the ships but demonstrated the vulnerability of the shipping lines to non-conventional military attacks. Iran condemned both attacks, claiming that the presence of the US troops in the Persian Gulf is what is generating insecurity in the region.40 Nonetheless many thought that Iran was behind the attacks. President Trump, in particular, called Iran «a nation of terror», and accused Tehran of being responsible for the attack on the two oil tankers. He based his accusation on a video released by the U.S. military, which allegedly showed Iran’s Revolutionary Guard seeking to remove evidence of its involvement in the attack.41

This situation created diplomatic hardships for third countries. In particular, the second incident took place during Japanese Prime Minister Shinzō Abe’s official visit to Iran, precisely during a meeting with Iranian Supreme Leader Ali Khamenei. Allegedly, Abe was about to deliver a direct message from president Trump, as Japan tried to mediate between the US and Iran, trying to de-escalate the existing tension. While Japan condemned the attack, it refrained from accusing Iran directly or any other specific actor.42

A third incident, which almost ended in a direct military confrontation between the US and Iran, occurred on 29 June 2019, when the IRGC Air Defence forces shot down a US drone conducting a surveillance mission over the Persian Gulf. While the US official position was that the drone was flying over international waters, the Iranian position was that it had violated the Iranian airspace near the Strait of Hormuz and began to spy on Iran. Hence the shooting down of the US aircraft, which, according to Major General Hossein Salami of the Islamic Revolutionary Guard Corps (IRGC), aimed at conveying «the straightforward message that any foreign intrusion into Iran’s sovereign territories would draw a crushing response».43 On his part, President Trump twitted that Iran had committed a «very big mistake»,44 and threatened Iran with military retaliation. This, however, did not take place as, allegedly, Trump cancelled it at the last minute, to avoid a lethal attack «not proportionate to shooting down an unmanned drone».45

The fourth incident directly involved Saudi Arabia. On 14 September, a drone attack targeted the Saudi Aramco oil facilities at Abqaiq and Khurais. The Yemeni Houthis claimed responsibility for the attack,46 similarly to what it happened with other drone attacks in Saudi regions close to the Saudi-Yemeni border. However, the proximity of the facilities to the Persian Gulf and Iran and the already accumulated tension drove the US to directly accuse Iran.47 The Iranian government denied any involvement in the attack.48 This incident had a global impact since, because the damages inflicted on the oil facilities forced Saudi Arabia to reduce their production for a few days, provoking distress in the oil market. Most importantly, the 14 September attack showed that despite all the technological advances and the strategic alignment between Saudi Arabia and the United States, the oil facilities of most of the regional states were vulnerable to a kind of attack which required neither high technology nor a vast and well-equipped army to carry it out.

The situation in 2020 got even worse. On 3 January 2020, Qasem Soleimani, an Iranian commander of the IRGC Quds forces and one of the most popular political figures in Iran, with strong influence on Iranian foreign policy, mainly concerning the Syria and Iraq scenarios and the fight against ISIS, was killed by a US drone attack. The killing took place near the Baghdad International Airport when Soleimani was meeting with the Deputy Head of the Iraqi Popular Mobilization Forces and nine other Iranian and Iraqi officials. The US government justified the killing of Soleimani on the basis that it had been decided to prevent an «imminent attack» against American interest. In fact, according to the Trump administration, the action had been taken «in response to an escalating series of attacks […] to protect United States personnel, to deter Iran from conducting or supporting further attacks…and to end Iran’s strategic escalation of attacks […]».49

The killing was condemned not only by Iran and Iraq but also by American politicians, including then-presidential hopeful Joe Biden in a tweet on 3 January.50 On his part, President Trump twitted that «we have […] targeted 52 Iranian sites (representing the 52 American hostages taken by Iran many years ago), some at a very high level & important to Iran & the Iranian culture, and those targets, and Iran itself, WILL BE HIT VERY FAST AND VERY HARD.”51

The attack also generated many speculations about the timing of Soleimani’s killing and the real reasons behind it. Some sources claimed that Soleimani was in Iraq to deliver a message to the Saudis through the Iraqi officials to start a de-escalation in the Persian Gulf. Others claimed that Soleimani’s killing had been planned a long time ago, but only now Trump had decided to execute him. In doing that, Trump’s objective was to raise the bar to a level that would make war inevitable in case of an Iranian retaliation52.

While it is not the objective of this paper to clarify this issue, it is evident that, regardless of the reasons behind such a decision, there was no retaliation by Iran commensurate with the seriousness of the killing of Soleimani. In fact, Iran’s limited reaction, which took place just a few days after the killing, on 8 January, was an attack with a large number of ballistic missiles at the Ayn al-Asad US airbase in Al Anbar governorate in Iran, and another near Erbil, in the Iraqi Kurdistan region. While no casualties were registered, at least one hundred US soldiers suffered traumatic brain injuries from the attacks.53 Interestingly, these Iranian attacks did not trigger any strong response from the US military.

During the Iranian retaliation, the Ukraine International Airlines Flight 752, departing from Tehran International Airport on the 8 January early morning, was shot down by mistake by the IRGC Air Defence forces, killing the 176 passengers and crew on board. Most of them were Iranians with Canadian citizenship, returning to Canada.54 While the Iranian government initially rejected any Iranian involvement in the plane crash, Rouhani later admitted that a «disastrous mistake» had been provoked by a human error, due to the tense war situation. Allegedly, the air defence forces had confused the airliner with a possible US aircraft retaliating the ongoing Iranian mission in Iraq.55 Since then, there has been much speculation as to the causes of the mistake, including the Iranian accusation that the US had caused it by using a virus that had disoriented the Iranian radars.56

Since the time of the Iran-Iraq war (1980-1988), there has not been such a tension in the Persian Gulf waters between Iran and the United States as the one taking shape in the years under review. During the Iran-Iraq war, a civilian Iranian Airline airplane was mistakenly shot down by the USS Vincennes. While that incident forced Iranian acceptance of the UN/SC resolution 598 which ended the war, these incidents – the killing of Soleimani, the Iranian reaction and the erroneous shooting down of the Ukrainian airliner – forced a de-escalation between the US and Iran. Both governments tacitly accepted the exchange of attacks as enough retaliation, preventing a further escalation that could have ended in a large-scale war with unpredictable results.

4.2. The HOPE Initiative

In September 2019, President Rouhani and Foreign Ministry Zarif presented the «Coalition for Hope», or Hormuz Peace Endeavour (HOPE), at the United Nations General Assembly. This initiative aimed «to promote peace, stability, progress, and welfare for all the residents of the Strait of Hormuz region, and enhance mutual understanding and peaceful and friendly relations amongst them».57 The HOPE initiative was directed to the Gulf Cooperation Council (GCC) states, namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates, and aimed at easing the increasing tension between Iran, the US and Saudi Arabia generated by the incidents occurred in the Persian Gulf.

Both Rouhani and Zarif explicitly acknowledged that, to achieve peace in the region, it was necessary to adhere to common principles of good neighbourliness, such as dialogue and mutual respect; respect for sovereignty, territorial integrity and invariability of international borders; peaceful settlement of all disputes; rejection of threats and use of force; non-aggression and non-intervention in the internal or external affairs of any country; and rejection and non-participation in coalitions and alliances against each other. While this last principle explicitly referred to (and implicitly decried) the presence of external forces in the regions such as the US military, the HOPE initiative acknowledged for the first time the security concerns of the GCC states and the role of the US forces in protecting the Arab monarchies.

To enhance its legitimacy as a regional power, Iran suggested HOPE to become the framework of a broader security arrangement that, taking the OSCE as a model, included all the regional actors and did not object against the presence of the US troops in the GCC states, at least at the beginning. The reference to the Strait of Hormuz, instead of the Persian Gulf, was also indicative of the inclusive tone given by the Iranian government to the initiative.

The HOPE initiative was presented to the six GCC states, with the expectation of receiving positive feedback. The regional launching of the initiative took place at the Tehran Dialogue Forum on 7 January 2020. Three of the GCC states – Qatar, Kuwait, and Oman – sent high-level representatives, which was considered a positive reception from those three states, compared to the silence of the other three (Saudi Arabia, UAE, and Bahrain). While the Forum was supposed to focus entirely on HOPE, the killing of Qasem Soleimani just four days earlier arguably forced Zarif to change the content and tone of his inaugural discourse. Nonetheless he maintained the spirit of the message, addressing the need to achieve a «paradigm of regional inclusivity and synergy – as the only realistic way out of the current cycle of perpetuating crises».58

4.3. Iranian Nuclear Diplomacy

Due to the unilateral withdrawal of the US from the JCPOA, the Iranian government started to use several tools to pressure the other signatories of the agreement, mainly the European Union, to counter the American renewed sanctions. Iran aimed at obtaining the promised benefits in terms of the needed investments in the oil and gas industries and commercial deals that did not materialize or were cancelled due to US pressure. Examples are the cancellation of both the Airbus and Boeing deals signed in 2016 to provide much needed new aircraft to the Iranian airlines.59 Iranian pressure strategy consisted of a set of measures that gradually reduced compliance with the limitations established in the JCPOA. Thus, the 8 May 2019, Iran announced that it was no longer bound by stockpile limits on heavy water (130 metric tons) and uranium hexafluoride gas enriched to 3.67 % (300 kg), agreed in the plan of action. Later on, on 1 July 2019, Iran announced it had exceeded the limitations of enriched uranium at 3.67 stockpiles, and the inspectors of the IAEA verified it on the ground. On 7 July, Iran announced it would exceed the 3.67 % enrichment limit and, in fact, it had begun to enrich to the 4.5 % limit, also verified by the IAEA. By 5 September, Iran announced it would cease respecting the limitations on research and development of centrifuges agreed on the JCPOA. On 7 September, the IAEA verified that Iran had begun to install new centrifuges, and on 25 September, enriched uranium from those centrifuges started to accumulate. On 5 November, Iran announced that it would enrich uranium at the Fordow facility (closed after the signature of the JCPOA), transferring uranium from the Natanz facility. IAEA verified Fordow’s activities resumption on 9 November. On 16 November, Iran announced its breach of heavy water stockpile limitation. The IAEA inspectors confirmed it on 17 November.60

The remaining parties to the JCPOA (China, France, Germany, Russia, the United Kingdom, and the EU) responded to Iran’s first four violations by condemning Tehran’s actions and expressing support for the JCPOA. After the fifth violation, however, on 14 January 2020, the E3 (France, Germany and the United Kingdom) triggered the dispute resolution mechanism laid out in the JCPOA to address issues of noncompliance.61

On 5 June 2020, the IAEA released two reports, on the monitoring of Iran’s compliance with the UN Security Council resolution 2231 and the JCPOA, and on Iran’s safeguard agreement with the IAEA. The reports certified Iran exceeded the low-enriched uranium stockpile limits, and that Iran failed to comply with the agency’s request to access two possible undeclared nuclear sites.62 As a result, on 11 July, the Iranian Majles approved a bill to halt the implementation of the additional protocols to its safeguards agreement.63 However, Iran still continued to implement the protocols.

On 11 November 2020, the IAEA Quarterly Report certified that Iran’s stockpile of uranium gas enriched up to 4.5 percent uranium-235 equates to 2,443 kilograms, up 338 kilograms from the last quarter.64

Two incidents not directly linked to the JCPOA affected the Iranian program and its stand toward the negotiations. The first occurred on 2 July, when an explosion at the Natanz nuclear site damaged the centrifuge facility, fortunately enough without any leakage of radioactive material. Iran considered the incident as a sabotage and accused those who were against US sanctions lifting.65 The second incident was the assassination of the Iranian nuclear scientist Mohsen Fakhrizadeh in the suburbs of Tehran. Iran accused directly Israel, which did not deny its involvement.66

The withdrawal of the US from the deal, the gradual steps taken by Iran, and the lack of significant achievements since 2015 resulted in a situation characterized by the fact that the JCPOA was almost dead by the end of Trump’s term in December 2020.

4.4. The COVID-19’s impact on Iran’s relations with neighbouring countries

The Iranian government had been criticized by some of Iran’s neighbours because of its slow reaction at the beginning of the pandemic. This criticism was sustained by the evidence of the first cases that were recorded in some of Iran’s neighbouring countries. As reflected in the figure below, with the exception of the United Arab Emirates, which registered its first case before the first Iranian case on 29 January, at least ten countries traced the origin of their first cases back to Iran. Most of them were nationals from third countries that had travelled to Iran, mainly for religious reasons, and most of them had visited the city of Qom, where the outbreak had started. As a result, most of the neighbouring countries took drastic and swift containment measures towards Iran. Just a few days after the first case was declared, Iraq and Turkey closed their borders with Iran. Many countries cancelled their flights to Iran, and imposed quarantine measures on all those coming back from the Islamic Republic, even when the return flights were via Dubai, Doha or other airports.

Iran was also heavily criticized for not suspending the flights to Beijing operated by Mahan Air, the private air company based in Tehran. According to some regional governments, this allowed the spread of the virus all over the region.

Table 5: First COVID-19 cases in Iran’s neighbouring countries
Lebanon	21 Feb	1 Lebanese citizen coming from Qom
Afghanistan	23 Feb	3 Afghan citizens from Herat coming from Qom
Oman	24 Feb	2 Omani citizens coming from Iran
Kuwait	24 Feb	1 Kuwaiti, 1 Saudi y 1 bidoon67 coming from Iran
Iraq	24 Feb	1 Iranian religious student, in Najaf
Pakistan	26 Feb	1 Pakistani student in Karachi coming from Iran
Azerbaijan	28 Feb	1 Russian citizen coming from Iran
Qatar	29 Feb	1 Qatari citizen coming from Qom
Saudi Arabia	2 Mar	1 Saudi citizen coming from Iran
Source: Author’s elaboration based on several official and press sources
Country	date	First case origin
UAE	29 Jan	1 Chinese citizen coming from Hubei
Iran	19 Feb	2 Iranian citizens from Qom (pos. post-mortem)
Bahrain	21 Feb	1 Bahraini citizen coming from Qom

What the table demonstrates, however, is that, contrary to the claims of Iran’s neighbouring countries, it was not Iranian citizens who spread the disease in the region, but rather the citizens of the neighbouring countries who had travelled to Iran. The disease neither did discriminate against different nationalities, religions or cultures, nor did it respect existing borders, despite the heavy measures that had been implemented to curb its spread. But also, and maybe most importantly, the data show that it is impossible to isolate Iran from its neighbouring region, as desired by some of Iran’s regional adversaries. Cities such as Qom or Mashhad are simply too important, and attract travellers from all over the region, Arabs and non-Arabs alike.

The COVID-19 pandemic, in this regard, highlighted beyond any possible doubt that security concerns that affect the region cannot be addressed following the traditional hard-core militarized security approaches. In spite of that, the nature of the security concerns in the region did not change, staving off an increased cooperation between Iran and its regional neighbours in terms of prevention of the disease spread or development of a locally produced vaccine, to be distributed within the region.

5. Conclusion

The double impact of the US re-imposed unilateral sanctions in November 2018 and the COVID-19 pandemic that spread worldwide and affected mainly oil-producing economies like the Iranian one heavily marked the Iranian economy, politics, and foreign policy. The ‘maximum pressure’ exerted by the Trump administration brought the Iranian oil exports to tiny figures in 2019, but without reaching the zero barrels expected by the American President. The pandemic, with the reduction of oil consumption worldwide, mainly in China, unexpectedly contributed to the near achievement of the US goal of strangling Iran’s economy. Thus, the Iranian economy struggled to survive along this period, with the Iranian government hesitating on the measures to be taken to tackle the spread of the pandemic without further damaging an already shrinking economy.

Iran was the second state in the Middle East, after the UAE, in registering cases, but it was the one in which the virus spread more rapidly, contributing to extending it to other countries. By the end of the period covered in this article, two waves of COVID-19 had shocked Iran, with significant peaks of new daily cases and new daily deaths, significantly higher than those in the rest of the world. By the end of 2020, however, Iran announced the beginning of the clinic trials of its own produced vaccine, an achievement unique in the whole region.

The domestic politics were marked by the expected defeat of the pro-Rouhani groups in the parliamentary elections, the ones with the lowest participation since 1980. This was coupled by the reconfiguration of some of the non-elective political institutions, balancing the whole political arena towards the conservative and hard-line factions.

The tension with the US was at the core of the Iranian foreign policy concerns, and the whole region was on the brink of war in two occasions, in 2019 and 2020, first after the shooting down of the US drone violating the Iranian airspace near the Strait of Hormuz and then after the US killing of Qasem Soleimani. At the end of the period under review, Joe Biden’s victory in the presidential race and the consequent end of the Trump era were seen by most international analysts as opening the possibility of a de-escalation of the tension counterpoising the US to Iran. However, only the future will reveal whether this possibility will become reality.

ISSN 2385-2526