Dismantling the wall

NOT even this month’s record snowfalls have chilled the mood in Iran’s capital, Tehran. Hopes that an economy long hampered by international sanctions may soon grow again have been rising ever since the election last June of President Hassan Rohani. They have soared since the signing in November of an interim deal between Iran and six world powers, led by America, over the country’s controversial nuclear programme. Further talks—the latest round of negotiations opened in Vienna on February 18th—aim to secure a comprehensive agreement to end the decade-long nuclear crisis.

“At last we have reason to be cheerful,” grins one Tehran resident. Few deny that the fractious atmosphere that prevailed under Mr Rohani’s predecessor, Mahmoud Ahmadinejad, has changed. The new president has a co-operative touch, working with parliament, for instance, to pass his first budget in record time. In contrast to Mr Ahmadinejad’s anti-Israeli diatribes, Mr Rohani avoids mentioning the Jewish state and is being nice to Iran’s small Jewish community. He recently delivered a hefty government donation to a Jewish hospital in Tehran, for instance. After years of steady devaluation, Iran’s currency has stabilised. The IMF reckons inflation fell over the last six months of 2013 from 45% to under 30%.

In January, Mr Rohani, an affable but steely cleric, travelled to Davos, eyrie of global capitalism, to declare that Iran was open to “constructive engagement”. His oil minister, Bijan Zanganeh, has announced that he wants to all-but quadruple Iran’s oil sales from their current, sanctions-depleted level of 1.2m barrels per day. On February 2nd, 100 French corporate bigwigs were in Tehran to talk business. According to the local rumour-mill, European executives are not the only ones sidling along the corridors of the oil ministry: there are Americans, too.

Naysayers aplenty

Yet big obstacles remain to lasting improvement in the daily lives of Iranians. Opponents of the country’s current diplomatic initiatives abound. American legislators are threatening new sanctions—so far, without result. Israel’s prime minister, Binyamin Netanyahu, called the interim deal an “historic mistake”. And sceptics can be found in Tehran, too. Mr Rohani is acknowledged to be a canny operator with strong public support, but he faces powerful opposition in the form of revolutionary ideologues and militarists. For them, detente would be anathema.

Hossein Shariatmadari, the influential editor of Keyhan, a conservative newspaper, contrasts the government’s unwillingness to disclose details of nuclear negotiations with American loquacity on the subject. Nowhere have foreign powers acknowledged the Islamic Republic’s much-vaunted “right” to enrich uranium, complains Mr Shariatmadari. The regime maintains that this was the goal for which Iran has braved sanctions and acts of sabotage, such as the assassination of four of its nuclear scientists.

Iran’s conservatives are used to baiting moderate presidents; they drove to distraction Mr Ahmadinejad’s predecessor, a gentlemanly reformist called Muhammad Khatami. They have moved against one of Mr Rohani’s allies, Sadegh Zibakalam, a political scientist, who dared recently to ask what Iran’s nuclear effort has achieved for a country whose development indicators rival those of African countries. More than 5m Iranians are unemployed, Mr Zibakalam said, and the country is ravaged by drought. He has since been charged with “weakening the system”.

But Mr Rohani is made of sterner stuff than former leaders. On February 4th he called critics of the nuclear deal “barely literate”. A day later he successfully browbeat hardliners who control the state broadcasting monopoly into reversing a sudden decision not to air a scheduled interview with him.

A decade ago it was the disfavour of Iran’s supreme leader, Ayatollah Ali Khamenei, that condemned Mr Khatami’s reformist government to failure. Mr Rohani’s ability to prosper also lies in the ayatollah’s hands, which control many of the levers of Iran’s “deep state”. Mr Khamenei’s attitude towards the diplomatic process has been calculatedly ambiguous. In a speech on February 17th, the eve of the Vienna talks, he said Iran “would not breach what it had started”. Yet he also admitted he was not optimistic. Iran, he said, should not count on talks, but rely on its “bottomless” domestic capacities.

Iranians who voted for Mr Rohani so he could alleviate the pain of sanctions hope the supreme leader’s words are mere diplomatic bluff. But Mr Khamenei is known for first supporting, then distancing himself from, presidents elected beneath him. If a government fails, the sagacious ayatollah will be seen as indispensable to the establishment of a new one.

Mr Khamenei’s professed agnosticism about Mr Rohani’s diplomatic forays could be an insurance policy against their failure. Equally, warns one former official, the ayatollah may fear that success for the president would give too big a boost to the reformists’ prospects in elections over the coming 18 months—for parliament and for the Assembly of Experts, a body of clerics partly selected by the ayatollah that, among other things, picks the supreme leader. Should loyalist conservatives lose control of those bodies, says the ex-official, they could be out of power for years.

Still, for all their bravado, Iran’s long-triumphant conservatives have weaknesses of their own. Public backing for the nuclear programme, which by some estimates has cost upwards of $400 billion when outlays and losses from sanctions are combined, may be weaker than regime supporters assume. Conservatives cannot fail to take note of economic realities, either. It was by concentrating on those fabled domestic capacities, and cocking a snook at sanctions, that Mr Ahmadinejad’s government suffered the collapse in revenues that has forced his successor into negotiations from a position of weakness. Iran’s GDP contracted by 1.5% last year, says the IMF, and is unlikely to pick up in 2014.

Without oil revenues gushing in again, Mr Rohani’s government will simply look like a saner, less profligate version of its predecessor. Its budget may restrain inflation but will hardly dent unemployment, raise living standards or make up for years of underinvestment. Mismanagement will need to be tackled even when sanctions are fully lifted. Only then will the hopes in Iran be fulfilled.