The IRGC under Rouhani: Changinig economic role?

As IranPolitik has noted in the past, the Islamic Revolutionary Guard Corps (IRGC) is a major economic player in Iran, with interests in nearly every economic sector, most notably Iran’s strategic petroleum industry. This situation has arisen for a variety of reason, including the IRGC’s experience in construction projects from the Iran-Iraq War, the weakness of Iran’s private sector in the post-war period and today, international economic sanctions, and the body’s political clout, both within the regime generally and with the Mahmoud Ahmadinejad administration between 2005 and 2013 specifically. Most notably, under the last administration Rostam Ghassemi, former commander of the IRGC’s construction arm the Khatam al-Anbia Construction Headquarters, became oil minister and is believed to have further expanded the body’s influence in this strategic industry.

Since the election of Hassan Rouhani as president in June 2014, however, there have been increasing calls and expectation for limits to be placed on the IRGC’s economic activities, and the new president has made what has been interpreted as veiled criticisms of the body in this regard. That’s why recent comments by Ali Saeedi, the supreme leader’s representative to the IRGC, have caused a stir and raised the question of whether the IRGC may be gradually retreating from its economic role.

Saeedi, speaking at a press conference on Sunday 24 January 2014, was quoted by the IRGC-linked Javan Online as stating that “Just as it has until now limited its projects, the IRGC is considering whether it shall continue doing this and give national projects to the private sector that has the capacity for these projects.” He continued, saying that the IRGC’s goal was not “making income” but rather entering economic activities in accordance with “the essential duties of the IRGC, meaning defending the Islamic Revolution.”

Saeedi cited an example of this where foreign firms had exited major energy projects and the IRGC had stepped in to assure the continuation of these projects: “The time that the two major corporations, Total and Shell, withdrew from major projects an institution must place its shoulder under this weight so there is no blow against the advance of the revolution. As a result, this action of the IRGC is a strategic action.”

The contents of Saeedi’s speech are disputed. Javan Online, ISNA, and Etemad, all carried the above quotes. However, Sepah News, closely linked to the IRGC’s PR department, and Mehr News Agency quoted Saeedi differently. Still, the election of Rouhani and these recent statements, among other things, raise interesting questions about how the IRGC may be revising its economic role in light of the negative attention these activities have brought the body. The IRGC has been sensitive in recent years to combat “Sepah-harrasi” (IRGC-phobia) which emanate both from the domestic press but especially foreign media, and has undertaken considerable public relations efforts in line with this object.

Could we see the IRGC retreating from economic activities and focusing more on its national security role? Or could we see it restructure its economic activities to attract less negative attention toward itself? Saeedi’s reference to giving more contracts to the private sector may be a reference to the latter option, though not in the way one might imagine: It may contract out small-to-medium contracts and phases of large contracts to ostensibly “private” sub-contractors which are in fact loosely affiliated with it and continue to perpetuate its influence.

Whatever path it takes, the current status-quo, appears unsustainable.