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Sep 14, 2017 | 19:14 GMT

2 mins read

Iran: President Attempts to Crackdown on IRGC's Economic Influence

(Stratfor)

Iranian President Hassan Rouhani's attempt to curb the influence of the Islamic Revolutionary Guard Corps (IRGC) on Iran's economy is well underway. A Financial Times report published Sept. 14 detailed the Rouhani government's crackdown on the IRGC's business empire over the past year.

Attacking the entrenched interests of the IRGC is in line with Rouhani's wider mandate of stabilizing the economy and liberalizing parts of Iran's industrial sectors to attract foreign firms. Under Rouhani's predecessor, Mahmoud Ahmadinejad, the IRGC and affiliated businessmen were able to win a number of construction contracts, oil and natural gas contracts and other key economic spoils. Rouhani, on the other hand, promised during his campaign earlier this year to set the IRGC firmly in his crosshairs. And he almost certainly had the blessing of Iran's supreme leader, Ali Khamenei. 

So far, Iranian authorities have targeted, detained and seized the assets of over a dozen IRGC personnel and affiliate businessmen. In the past, the IRGC's business empire and independent financing allowed it to, at times, act against the supreme leader's wishes. Cracking down on the IRGC is a possible reaction to that. But as a military institution with considerable reach, funding and financing, the IRGC will not be easily cowed.

The IRGC's level of corruption, its business connections in industry, and its economic empire could grow to the point of harming the economy. Also, such malfeasance could undermine the IRGC's original purpose in handling foreign, military and intelligence operations. Still, the crackdown is unlikely to halt the IRGC's ascendance up the ranks of the military and intelligence apparatus. And the stakes are high: How Rouhani balances asserting control over a highly influential military institution will in part determine the extent of Iran's ability to reintegrate with the global economy.

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