This week, Iran implemented an overhaul of its national subsidy system, in effect cutting billions of dollars worth of subsidies for daily consumer use, especially fuel and electricity. Though cushioned by transfer payments to low-income households, it is akin to a major austerity move. While the economic impact is clear, many outsiders remain baffled how a regime ridden with internal factionalism (and widespread unpopularity) can manage such radical reforms. The past few weeks have seen rumors of a looming impeachment trial of President Mahmoud Ahmadinejad, followed by his humiliating dismissal of Foreign Minister Mottaki. These are hardly the signs of calm leadership steering through an economic crisis.
But narratives grabbed from the headlines can be misleading, and longer-term developments in Tehran point in a surprising direction. Today, the Islamic Republic is set to become more politically stable, and may even offer the chance for improved US-Iranian relations under what Secretary of State Hillary Clinton has called an emerging “military dictatorship.”
Although this development was well under way at from at least the mid-1990s, the 2009 post-election fiasco was the ultimate coming-out party of the security apparatus, notably the Revolutionary Guards. Observers have termed it a ‘praetorian takeover,’ borrowing the name from ancient Rome’s Praetorian Guard, the feared imperial bodyguard of the Caesar who used their proximity to power to eventually become kingmakers themselves.