Bi-Weekly Geopolitical Report – The Recent Iranian Election: Results & Implications (August 19, 2024)
by Daniel Ortwerth, CFA | PDF
The Iranian political landscape experienced a major earthquake on May 19, when the country’s president, Ebrahim Raisi, died in a helicopter crash on his return from a visit to neighboring Azerbaijan. Consequently, in June and July, Iran conducted a two-round presidential election with a surprising result. In a country ruled by a highly conservative theocracy, whose political system has become increasingly dominated by its most hardline, right-wing parties, a reformist (i.e., moderate) candidate came out on top. How did this happen, and what does it mean for the rest of the world? Will it inspire changes in Iranian domestic politics or foreign policy? How will it affect the United States, and what does it mean for investors? Since Iran tends to be a disruptive force in the world, these and other questions need our attention.
This report begins with a review of three key challenges currently facing Iran: regional and global opposition to Iran’s long-term geopolitical strategy, deepening economic woes, and an upsurge in societal unrest. We continue with an explanation of the role of the president in the Iranian political structure and a brief introduction to the winner of the election, reformist Masoud Pezeshkian. We conclude with an explanation of why we do not expect this change of leadership to shift Iran’s geopolitical strategy, even if it does usher in adjustments to how it approaches its key challenges. As always, we conclude with implications for investors.