06/25/2013 05:13 pm ET Updated Aug 25, 2013

Iran's Newly Elected President and His First Term's Significant Domestic and Foreign Policies

After the votes of Iran's 2013 presidential election were tallied and Hassan Rouhani announced the winner, the new president of the Islamic Republic -- who will soon replace the controversial and provocative figure Mahmoud Ahmadinejad -- will be preparing to face several major domestic, regional and international issues. This term of presidency is an especially critical one for Iran, as the country has recently been facing an unprecedented level of economic decline as well as regional and international pressure and isolation. The most significant issues that Iran's new president must face can be categorized by two fronts.

One on hand is domestic policy. This includes addressing the country's economy, high level of inflation and unemployment rate (particularly in urban areas), the youth that are disaffected with the Islamic character of the regime, as well as repression of political parties, journalists, minorities and activists. On the other hand is Iran's foreign policy, specifically: Iran's nuclear program, defiance of the international community, relations with Assad's turbulent regime, hegemonic ambition in the Middle East, political, strategic, economic, diplomatic and geopolitical relationships with proxies throughout the region (including Hezbollah and Al-Mehdi's Army), four rounds of paralyzing economic sanctions, as well as regional and international isolation.

Iran's deteriorating economy that Hassan Rouhani will have to inherit is in some part attributed to the policy mismanagement of the current lame duck president, Ahmadinejad, who insisted that rates for borrowers and depositors could not exceed the inflation rate. In addition, according to recent statistics by the International Monetary Fund, under Ahmadinejad's presidency in 2013, inflation in Iran reached 25.2 percent, unemployment 13 percent (although the unofficial number is above 23 percent), and economic growth a staggering 0.8 percent. Moreover, the value of the rial has eroded for the past few years, to a point where it now costs about 39,800 rials to buy $1 in Tehran. When Ahmadinejad first assumed the presidency, the rate had been 1,300 rials.

From a domestic and economic perspective, it is very unlikely that Hassan Rouhani would be capable of significantly enhancing Iran's declining economy, reducing the unemployment rate (particularly among the youth), or generating more job opportunities for the population. This is partly due to the fact that Iran's deeply wounded economy is not only linked to the inefficiency and mismanagement of ex-president Mahmoud Ahmadinejad, but also -- and most fundamentally -- the accumulated impact of sanctions.

In addition, most of the revenues in the country are allocated to Iran's nuclear program, facilities and technologies. Moreover, the country's revenues and oil profits are held by some state institutions, such as Iran's Revolutionary Guards Corps, army, and the Basij -- the paramilitary militia loyal to the Supreme Leader. Iran's economy, rather than being based on a free market which would allow Iranians the opportunity to prosper and invest in any sect of the financial market, is centralized in the state and ruling clerics.

Meanwhile, when it comes to Iran's foreign policy agenda, two objectives in particular are in the most vital need of being tackled. Firstly, there are the four rounds of crippling sanctions and unprecedented regional and international isolation, attributed to the Islamic Republic of Iran's nuclear enrichment program and defiance towards the international community. Secondly, another foreign policy objective topping the agenda is the Syrian conflict between the pro-Assad groups and pro-rebels parties, now entering its third year without any political resolutions in sight.

Based on the ideological, career, personal, and political characteristics of Hassan Rouhani, his position towards Tehran's nuclear enrichment does not differ from the position of Iran's Supreme Leader, Revolutonary Guards' high generals, Basij. Across Iran's political spectrum -- principlists, moderates, reformists, and centrists -- Iran's nuclear program has been a matter of consensus. Obtaining nuclear capabilities is viewed as a matter of survival for a regime hit by robust sanctions, disaffected populations and regional and international isolation. As a result, the international community's pressure and sanctions towards the Islamic Republic of Iran will likely only progress while Tehran will continue to defy the international community and the IAE's proliferation standards.

Finally, when it comes to Syria, Hassan Rouhani is unlikely to push for any policies which would alter Tehran's status quo towards Assad's sect-based and police state. For the Iranian leaders, Syria has been Tehran's only consistent ally since the Iranian Islamic revolution in 1979. Syria is considered a bulwark against Israel and the United States, as well as a conduit for delivering arms to Hezbollah. Hassan Rouhani is well-aware that if Assad's regime falls, the balance of power will significantly shift in the region in favor of the Gulf Arab states (particularly Saudi Arabia) and against the Shiite-led collation of Iran and Hezbollah. From this perspective, Tehran will lose much of its geopolitical influence and hegemonic ambitions in the region.

Majid Rafizadeh is the president of the International American Council on the Middle East and he serves on the board of Harvard International Review in Harvard University. He can be reached at or followed at @majidrafizadeh