General Middle East & North Africa Thread

Republican Trump said during the election campaign that he would abandon the nuclear deal reached between Tehran and six world powers in 2015 that curbed Iran's nuclear program in return for the removal of international sanctions.

His tough stance, in contrast to President Barack Obama's offer of an olive branch to Tehran, could serve the interests of hardliners in Iran.

"If Trump adopts hostile policies towards Iran, this will empower hardliners in Iran," a senior Iranian official told Reuters on condition of anonymity because of the political sensitivity of his comments.

A second senior Iranian official said: "Trump's victory will unite Iran's hardliners and their supporters ... It means more political pressure at home and an aggressive regional policy."

During the election campaign, Trump described Iran as the world's largest state sponsor of terrorism and dismissed the nuclear accord as "one of the worst deals I've ever seen negotiated."

But Trump he has frequently made contradictory statements so foreign governments are unsure how much of his rhetoric will be translated into U.S. policy.

Iranian Foreign Minister Javad Zarif urged him to stay committed to the Iran deal. President Hassan Rouhani said the election result would not effect Iran's policies and the nuclear accord could not be dismissed by one government.

But hardliners loyal to Iran's most powerful authority, Supreme Leader Ayatollah Ali Khamenei — the Revolutionary Guards (IRGC), powerful clerics and influential politicians — had signaled their support for Trump in the past few weeks.

They are wary of any detente with the West which could imperil the Islamic Revolution, and hold influential positions in the judiciary, security forces and intelligence services.

CONCERNS ABOUT THE ECONOMY

Khamenei, whose hostility toward Washington is the glue that holds together Iran's faction-ridden leadership, has ruled out normalization of ties with the United States, which the hardliners refer to as the Great Satan.

The nuclear deal heightened hardliners' anger over the rise to power of pragmatist Rouhani, elected president in 2013 on a pledge to improve foreign relations and revive the economy.

Tension eased when Khamenei approved the deal, fearing economic hardship might cause the collapse of the establishment.

"Many Iranians and the government see the nuclear deal as the only way to get Iran out of economic isolation," said the first Iranian official. "I don't think Trump will tear up the nuclear deal."

Rouhani's failure to improve the economy despite the lifting of most sanctions in January has opened him to criticism from hardline rivals and powerful clerics.

Some Western companies had been hoping Democrat Hillary Clinton would defeat Trump in the election because of concern over the fate of the nuclear deal.

"Now with Trump's victory, even the European companies will be reluctant to invest in Iran ... in the best-case scenario they will adopt the policy of wait and see," said a senior Economy Ministry official.

The official said this would "harm the credibility of Rouhani and his economic plans."

Iran, which has a population of 80 million, was the biggest economy to rejoin the global trading and financial system since the Soviet Union broke up in 1991.

But many foreign investors are put off by obstacles to doing business in Iran such as the poor state of banks that were long outside the international financial system, the state's big role in the economy and a lack of clarity about the legal system.

Europe's largest banks have been reluctant to finance deals because they fear they could run incur financial penalties by violating U.S. sanctions that remain in force.

"With Trump's victory, major and even medium-size foreign companies, banks and other investors will be more cautious ... to invest in Iran," said Tehran-based businessman Reza Sardari.

"This will harm the economy just when we were hoping to attract foreign investors."

REVOLUTIONARY GUARDS COULD BENEFIT

Khamenei has shown he is anxious about the continuing economic difficulties and has blamed them on the government.

With Trump in the White House, the situation is likely to play into the hands of the elite Revolutionary Guards and an overseas arm, the Qods force, an Iranian security official said.

When the EU and U.S. sanctions were imposed in 2012, the Guards became involved in a wide range of industries, including energy, tourism, auto production, telecommunications and construction.

"With Trump's victory, Iran needs the Guards ... they will gain more economic and political power," the official said.

Tehran could turn to the Guards for help with the economy if Western companies decide to stay away from Iran, even though foreign investors might see that as a further risk because some Guards' members and front companies are under U.S. sanctions.

"The Guards and the Qods Force are Iran's key assets in the region," said the security official. "No matter who is America's president, we will continue to support our regional allies."

Iran, the dominant Shi'ite Muslim power, supports Syrian President Bashar al-Assad and has dispatched teams to Syria to gather intelligence and train Syrian forces. As a rival of Sunni Saudi Arabia, Iran has fought decades of sectarian proxy wars in Syria, Lebanon, Iraq and Yemen.

PRESIDENTIAL ELECTION LOOMS

But the regional policies adopted by Iran's clerical rulers could be constrained by the country's economic problems.

"The Iranian leadership's first priority is to improve the economy," said Tehran-based analyst Saeed Leylaz.

"For a short while, there will be political nuances because of Trump's election ... but then the Iranian leadership has to focus on its own problems. They will try to avoid any confrontation."

Some insiders say Trump's election might motivate Iranians worried by the rise of hardliners to vote for Rouhani in the presidential election scheduled for May.

Others say he faces a struggle to maintain popularity if the economy does not improve soon.

"If there is no economic upswing before Iran's presidential elections, Rouhani will be accused by his hardline rivals of giving away too much on the nuclear issue and failing on the economy," said a moderate former Iranian official.

"This will make him a very weak president even if he gets re-elected."

(Editing by Timothy Heritage)

Sidelined after a nuclear deal was reached with Iranian reformist leaders and the administration of President Barack Obama and major nations, the IRGC is determined to regain its position in Shi'ite Iran's complex governing structure.

Republican Trump said in the campaign that he would abandon the 2015 deal that curbed Iran's nuclear ambitions in return for the lifting of economic sanctions. His tough stance, in contrast to Obama's olive branch, is expected to empower hard-liners who would benefit from an economy that excludes foreign competition.

In addition, the Quds force, that conducts IRGC policies overseas, has played a successful and key role on the battlefields of Iraq increasing the Guards' kudos at home.

"Trump and the Islamic State militants were gifts from God to the IRGC," said a senior official within the Iranian government, speaking to Reuters on condition of anonymity like other figures contacted within Iran.

"If Trump adopts a hostile policy towards Iran or scraps the deal, hard-liners and particularly the IRGC will benefit from it," a former reformist official said.

Elected in a landslide in 2013 on a promise to end Iran's diplomatic and economic isolation, pragmatist President Hassan Rouhani has struggled to reconnect Iran's economy to world markets and to attract foreign investment.

Uncertainty over the nuclear deal, unilateral U.S. sanctions, political infighting in Iran alongside complex regulations, labor issues and corruption have hampered a post-sanctions economic revival causing concern to Supreme leader Ayatollah Ali Khamenei who blames the government.

SANCTIONS BENEFITED IRGC

Deeply loyal to Khamenei, the IRGC was created by Ayatollah Ruhollah Khomeini, leader of the 1979 Islamic revolution. The IRGC first secured a foothold in the economy after the 1980-88 Iran-Iraq War when the clerical establishment allowed them to invest in leading Iranian industries.

Involved in a wide range of businesses, from energy and tourism to car production, telecoms and construction, the IRGC's empire grew by taking billions of dollars in projects vacated by Western oil companies because of sanctions imposed to curb the nation's nuclear ambitions.

Trying to limit IRGC influence, Rouhani's government stalled or canceled some major projects with the IRGC, including a $1.3 billion deal with National Iranian Gas Co. in March 2014.

Under the nuclear deal, international sanctions were lifted in January opening up the Iranian economy, thereby threatening the IRGC power base. Now the Guards see an opportunity to lever back their position in the Iranian hierarchy.

"The IRGC will use Trump's win to convince the clerical rulers to give them more political and economic backing. This is what they have been hoping for since the deal was reached," said the senior government official, who declined to be identified.

"If Trump's presidency scares away foreign investors from Iran, then it is the IRGC that will regain its economic power," said a former reformist official close to Rouhani.

"More economic involvement of the IRGC means a riskier market for foreign investors. It will hinder Rouhani's planned economic growth and will give more political power to the IRGC and their hard-line backers," the reformist official added.

GUARD AGAINST UNCERTAINTY

Senior members of the IRGC and its front companies remain under unilateral U.S. sanctions for what Washington said was supporting "acts of terrorism".

Anxious about losing economic power, the IRGC accused Rouhani of favoring foreign firms rather than domestic ones, demanding a bigger role in the economy and calling for implementation of Khamenei's vision for a self-reliant Iran.

"The IRGC-linked companies cannot compete with the foreign firms. Therefore, they will want a limited presence for foreign firms in Iran," said Tehran-based trader Mohammad Ali, adding: "Money means power."

Foreign companies need an Iranian partner to do business in Iran, which for big projects often means firms controlled by the IRGC. Most of IRGC front companies are not formally owned by the Corps, but by individuals and firms linked to it.

The IRGC remains opaque to outsiders.

"The Guards have different layers. The roots of the IRGC are seasoned and senior commanders who idolise the supreme leader and are ready to sacrifice their lives for pillars of the revolution and have influence in political and overseas activities of Sepah (IRGC)," a retired IRGC commander told Reuters, declining to be named.

"Also there is another layer and not at the top that have been involved in business activities. They gained more economic power under former president (Mahmoud) Ahmadinejad."

The future of the nuclear deal will have a direct bearing on IRGC military, political and economic ambitions and it is unclear if Trump will carry out his threat to abandon it.

During the campaign, Trump dismissed the deal as "one of the worst deals I've ever seen negotiated". But Trump has in the past made contradictory statements so foreign governments are unsure how much of his rhetoric will be translated into policy.

Middle East political analysts expected the powerful clerical establishment's political backing of the IRGC to harden in reaction to the uncertainty concerning a Trump presidency.

THE SUNNI CRESCENT

"The IRGC will gain more power at least until the dust settles after Trump's win ... the atmosphere in Iran will be militarized because of more power that will be provided to the IRGC," political analyst Hamid Farahvashian said.

"Uncertainty over Trump's Iran and regional policies, Iran's presidential election in May and economic hardship that might lead to street protests will force the establishment to give more power to the IRGC."

It was the IRGC that suppressed student protests in 1999 and also silenced pro-reform protests that followed Ahmadinejad's disputed re-election in 2009.

Analysts and officials say Tehran's Shi'ite Muslim clerical rulers are adamant that the IRGC is the key to help preventing the emergence of a so-called "Sunni crescent" of power from the chaos of the Middle East conflicts.

In rivalry with Sunni Saudi Arabia, Iran has fought decades of sectarian proxy war in Syria, Lebanon, Iraq, Yemen and other regional countries. Quds force commanders have been active recently on the battlefields of Syria and Iraq.

"The IRGC will adopt a more aggressive and tougher approach in the coming months," the former reformist official said.

Western governments and Israel accuse the Quds Force of arming various militant groups in the Middle East.

"The Corps are in charge of preserving Iran's national security and its overseas activities. So, having a threat like Daesh (IS) at our borders and the regional crisis make the Guards essential for Iran," a senior Iranian security official said, on condition of anonymity.

"No matter who is the president in America or elsewhere, we will support our allies and our Guards will do that."

(Writing by Parisa Hafezi, editing by Peter Millership)