Iran: Rouhani starts second term with new cabinet



In the beginning of this month Rouhani was inaugurated for his second term as Iranian president. This comes after he was convincingly re-elected in May 2017. Rouhani also proposed his new cabinet this month. While some had hoped that the new cabinet would be a clear signal of reform, it was more an indication of continuity.


His choice not to include any woman or members of the Iranian Sunni minority can also be seen as an attempt to try to preserve the relationship with Ayatollah Khamenei and the more conservative fractions in the country who have been increasingly vocal in their opposition against Rouhani’s promised reforms.


Impact on country risk

The new cabinet provides little surprises and should be seen as a continuation of the previous government policy. Two important faces of the previous administration have been kept in the current government.


Mohammad Javad Zarif, who helped negotiate the nuclear deal will remain minister of foreign affairs and Bijan Namdar Zanganeh, who helped sealing the recent Total deal will remain oil minister.


The EU has used Rouhani’s inauguration ceremony as a way of sending a clear message of support for the nuclear agreement given the presence of the EU’s foreign policy chief Federica Mogherini and senior diplomats from the UK, France and Germany at the ceremony.


The US Congress on the other hand further increased pressure on Iran this month by voting a bill that forces president Trump to take additional sanctions against Iran outside of the nuclear agreement. The sanctions are aimed at the Iranian Revolutionary Guard, human right abusers and the Iranian ballistic-missile programme.


These sanctions are increasing the tensions between the US and Iran since Iran sees them as a violation of the nuclear agreement. Rouhani’s focus during his second term in office is expected to be mainly on the Iranian economy. It has been difficult for the economy to translate the nuclear deal into investments in the country.


While car manufacturers, oil companies and the airline industry are starting to enter the Iranian market, international financial institutions remain very hesitant to follow due to remaining US sanctions and the bad shape of the Iranian banking sector.


Jan-Pieter Laleman , Credendo


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