The Peter Zeihan Podcast Series - Iran's New President Sparks Change, But How Much? || Peter Zeihan

Episode Date: July 11, 2024

Next up on our list of important elections around the globe is the Iranian presidential elections. We'll be looking at Iran's new President-elect, Masoud Pezeshkian, and what his victory might mean for the country. Full Newsletter: https://mailchi.mp/zeihan/irans-president-elect-sparks-change-but-how-much

Hey, everybody, Peter Zion here coming to you from a rental car in Kansas City. Today we are going to take a crack at the second piece in our elections series for the week. We got a number of important elections recently. Today we're to cover Iran, where there was a runway victory for the now president-elect Masoud Pesachian. And I apologize for the name. Anyway, he came in with a strong first place. There's a two-round voting system in Iran, and it's not relatively. a surprise that he won. There's any number of candidates who were on the first round, but five of

them sponsored by the clerical regime of Iran, you know, the kind of the slightly nutty, very altered conservative hate everyone group that runs the country. Anyway, there were five candidates for that, and they were all fire-breaters, and so having one moderate made sure that he made it to the second round where he easily defeated his opponent in the second round, who was honestly a complete nutback. So no surprise there. But giving away from the tactical political stuff, the situation Iran is in is uncomfortable. Dial back a little bit, if you remember back to the war in Iraq, the United States was very good at overthrowing the Saddam regime, but not very good at making Iraq look like Wisconsin. And so Iranian agents were able to kind of step into the void and agitate the Shia population of Iraq.

Shia is a religion. The Iranians are all Shia, pretty much all of them. And it's a single largest denomination in Iraq. government was Sunni. So when the United States basically you ripped out the apparatus of the old government, it wasn't quick enough in putting something else in this place. Iran was basically able to partially take over and still remains very influential there today. Anyway, during this period of the United States basically going after militants throughout the region, the Shia, the Iranians, were able to step in and displace a lot of groups and so a lot of trouble and become very, very powerful throughout the region. But it wasn't free. And Iran has a financial restriction in that

most of its income comes from oil. So if you can target the oil, you can target Iran and in the long term, long term being not just days or weeks or months or years, but decades over the long term, that really cripples them. And so during this period in the last 20 years, yes, Iran made a lot of forays, but it generated a lot of expenses. And when Saudi Arabia was roused to combat Iran, Iran was never going to win a game of checkbook diplomacy with a country that exports like a fifth as much oil. And then under Obama, the United States put some of the strictest sanctions

that have ever been developed against Iran as a way to pressure them into a nuclear deal to curb Iran's nuclear ambitions. Enter Donald Trump, who did away with the deal but kept the sanctions in place. Well, folks, those sanctions have now been in place for the better part of the last decade, and we are seeing some very real impact on the standard of living in Iran

because they just haven't been able to export the volume of oil that is necessary to sustain a meaningful standard of living within Iran, much less for them to cause trouble throughout the region. I don't mean to suggest that Iran's been curtailed or castrated or anything like that, but they're having a really hard time doing everything that they thought they were going to be able to do. Now, when this happens to you, when you have this sort of economic blanness, you can really follow one of two paths. The first path they tried a few years ago,

they elected a hardliner guy by the name of Rossi that everybody hated it. Oh my God, he was a mean dude. Even within the clerical establishment, people thought he was too tough, and then he died in a plane crash a few weeks ago. And so the new guy, Peseschiam, is basically trying the other approach,

maybe a little bit of compromise, maybe a little bit more constructive relationship with the West. Now, I don't want anyone to get to, too over-excited here. I mean, yes, elections matter in Iran, but only within a certain framework. The most powerful person in Iran is not the president. That is the supreme leader who remains a bag of snakes and basically is responsible for all the things that you think of when you think of Iran, the clerical theocracy, the oppression of minorities and women in the youth, the general seating of militant groups throughout the Middle East. None of that has changed. And now the new guy is

not challenging much of that at all, especially in foreign policy. Pazchkian has come out and said that he still supports Iran having the nuclear program, he still supports a hard line in negotiations with the West. He still supports the Houthis in their on again, off again conflict with Israel. He still supports Hamas against Israel. He still supports militancy throughout the region. But he's doing it with a much different tone that suggests there might be a little bit room for compromise here or there. I mean, don't count any chickens. this actually happens, but there's at least a change in mood. If, if, if there is going to be meaningful difference, and it is important, it's going to happen at home.

Puzchkin has been very, very clear that he thinks that the clerical authorities law enforcement arm shouldn't beat women if they show their hair. And from a geopolitical point of view, that's kind of a nothing burger under normal circumstances. But you now have the majority of the population of Iran siding with the president against the people with the gun. And that can go in a lot of really interesting directions. Keep in mind that you've got 10,000 clerics, 10,000 mullahs that basically rule Iran. It's a deep bench. I'm not suggesting here we're going to have a revolution.

But if the guy who is nominally at top who was chosen by the people wants a different approach to living your life in the country, and the people who have been calling the shots to this point are on the opposite side of that, well, things can get very, very interesting. So I don't want to overplay this. I'm not suggesting we're going to have a revolution, but for the first time in 40 years, there seems to be a split within the leadership of Iran on what Iran should be at home.

And that's how change starts. Okay, that's it for Iran. Tomorrow we'll deal with France.