In his first televised interview ^[1] since the recent widespread demonstrations in Iran, President Hassan Rouhani disappointed many by failing to address any of the root issues that sparked the unrest. An oppressive regime continues to silence Iranians’ ^[2] aggrieved voices, and the president appears unable—or unwilling—to implement any substantial social and economic reforms. Both domestic and international factors may help explain why.

Despite the legitimacy conferred on him by being elected president twice, Rouhani hasn’t been able to implement the reforms ^[3] that were central to his election campaigns in 2013 and 2017. Under Iran’s theocratic model of government, the Supreme Leader—elected by the Assembly of Experts and given divine autonomy—trumps the democratically elected president. That structure has been instrumental in sustaining the strength and power of the Supreme Leader and the Islamic Revolutionary Guard Corps (IRGC). And it makes it difficult to challenge the status quo. After Mohammed Khatami’s election as president in 1997, the IRGC stymied the reformist movement. It pushed back ^[4] against Khatami’s policies of moderation, tolerance and legal accountability ^[4] and effectively undermined his leadership. Rouhani may simply be trying to keep his head below the parapet while working behind the scenes.

He could be treading carefully around the IRGC for other reasons. There are whispers that he may be angling to be the next Supreme Leader ^[5]. He’s a respected and senior Muslim cleric, a member of the Assembly of Experts, and a pragmatic politician. And he holds lobbying power among various bodies in charge of Iran’s constitution.

If he plays his cards right and lands the top job, that could give reformists an opportunity to take Iran in a new direction, one that embraces modern Iran’s culturally heterogeneous national identity by fusing nationalism and political Islam, modernity, religion and secularism. If another hardliner is appointed, the anger and frustration of Iranians could worsen. They’re demanding accountability ^[6] from the regime.

International relations and foreign policy have also affected Rouhani’s economic reform agenda. The nuclear deal signed in 2015 was supposed to transform the country by opening Iran to foreign investment and economic liberalisation. While there was some initial economic growth, foreign partners have been slow on the uptake. In the meantime, the standard of living has fallen dramatically for the working classes—Iranians today are 15% poorer than they were 10 years ago ^[7]. In March 2017, unemployment hit 12.4%, which is 1.9 percentage points higher than three years earlier ^[8]. Adding insult to injury, a leaked draft budget proposed cutting subsidies for basic goods and increasing fuel prices ^[9] at a time of high inflation, international sanctions, falling oil prices ^[10], and the regime’s vast foreign policy spending to prop up the Assad regime and to fund Hamas and Hezbollah.

Iran has also suffered as a result of the shift in US foreign policy away from Obama-era cordiality. The Trump administration has developed noticeably warmer relations with Riyadh, while actively demonstrating its hostility towards Tehran’s growing regional influence. The Obama administration had hoped that encouraging Iran to rejoin the international community would moderate its behaviour. Under Trump, Iran’s foreign policy is likely to retreat inward—focusing on the region—rather than look outward. And if Trump makes good on his campaign promise to abandon the nuclear deal, Iran may face economic sanctions and a further deterioration of its economic situation.

If social and economic reforms remain on the backburner, the anger and frustrations felt by many segments of Iranian society are likely to fuel further unrest and violence. Iranians are increasingly fragmented—the 2017–18 uprising originated among poor, socially conservative members of society, which is unusual. Their chants of ‘death to the Ayatollah’ demonstrate that even those who were previously strong supporters of the regime have had enough of the poor economic and social policies responsible for the sharp drop in living standards. Domestic grievances and increased isolation wouldn’t only destabilise Iranian society, but could open the doors to malign influences such as extremists and terrorists.

Even though Rouhani’s constraint appears to be a result of broader domestic and international challenges, in a region inflamed with conflict and political turmoil the regime must listen to the grievances of the people if it’s to remain relatively stable. As long as the hardliners remain in charge, reforms will be stunted. But Rouhani as Supreme Leader could put reform back on track. A reformist at the head of the state could open doors and remove red tape that have prevented change. On the other hand, Rouhani’s track record of radical change isn’t great. Thus it remains uncertain whether he’d have the appetite to steer Iran in a new, more liberal direction.