The presidential elections in the Islamic Republic of Iran ended with confident victory of incumbent President Hassan Rouhani. His electorate has noticeably expanded compared to the results of 2013 elections: if in 2013 he gained just over 50%, this time he was supported by 57% of voters.
Objectively, such level of support can be considered a serious success of the Iranian government. After all, despite significant weakening of the sanctions regime, reached under Hassan Rouhani, the Iranian economy has been under serious strain because of a long period of low energy prices. In 2016, raw materials (primarily oil and gas) accounted for 75% of total state revenues from export. Due to low oil prices, the government made decision on unprecedented increase in oil production, raising it to 3.7 million barrels per day (Iran's announced goal is to increase oil production to 4 million barrels per day). After managing to make a breakthrough in oil production in the shortest time possible, the Iranians have mostly leveled out budget losses from the drop in world energy prices.
As a result of this, since signing the nuclear agreement, the Iranian economy has demonstrated a steady growth: in 2016, country's GDP grew by 4.6%, and this year the World Bank predicts 5.2% growth. At the same time, it should be noted that the incumbent government is criticized because the population doesn't feel real improvement in the economic situation, and the unemployment rate has somewhat increased. However, it shouldn't be forgotten that major international investors are very interested in the Iranian market after the nuclear deal was signed in July 2015 - and major projects that will give Iranian citizens work are currently being implemented. It's obvious that over the next four years, Hassan Rouhani and his government will continue to try to attract international investments, increase production capacity and improve technologies. Planned increase in Iran's defense budget and country's defense capabilities is also one of the priorities of Rouhani's government: since his inauguration in 2013, Iran's defense spendings have increased by 86%. It's noteworthy that thanks to the regional cooperation, strengthened under Hassan Rouhani, Iranian military products reached new markets. Last year, it was found out that a large buyer of Israeli weapons - Azerbaijan - became one of the importers of Iranian military products. Sources in Azerbaijani military circles claimed that Iranian missile systems were successfully used by the Azerbaijani Armed Forces during clashes with Armenia in April of 2016.
Economic modernization and strengthening of country's defense capabilities are necessary prerequisites for turning Iran into a regional hegemon - having such a goal is quite obvious, considering historical preconditions, as well as hegemonic ambitions of Saudi Arabia, Turkey, and the influence of Russia and the United States. Iran has a serious potential for expanding its military-political, economic and cultural-ideological presence in the Middle East, Central Asia and the South Caucasus. Rouhani's "soft policy" can achieve this goal. The question is, can Iran withstand tough regional competition and systematically ensure its own regional leadership? Rouhani's second term, like the first one, will be fateful for the country.
Iran continues to face serious risks in the region. In this sense, the outcome of battle for Syria will play a key role in determining the future role of the Islamic Republic of Iran in the region. Losing influence in Syria will result in the loss of logistical communication with Hezbollah in Lebanon and inevitable weakening of the latter, which in turn will greatly help Israel, since Hezbollah is the group capable of causing a serious damage to the Israeli army. Basically, with the loss of Syria and Hezbollah, Tehran will lose its direct influence on Israel. Moreover, Iran must understand that after Syria, its regional opponents will try to neutralize the Iranian influence in Iraq, which was established after the overthrow of Saddam Hussein.
Apparently, even under Trump, the United States won't break the nuclear deal with Iran, even though it was criticized by the republicans. However, it doesn't prevent Americans from helping (and making good money from military contracts at the same time) Saudi Arabia and Israel in the fight against Tehran's growing regional influence. Donald Trump's Middle East tour and the largest arms deal, signed between Washington and Riyadh during it, has obvious anti-Iranian orientation, which was clearly stated by the US State Department: "New contracts will help to support Saudi Arabia's security in the Persian Gulf region in the face of Iran's dangerous influence and Iran-related threats."
Similarly, Iran was at the center of negotiations between Donald Trump and Israeli Prime Minister Benjamin Netanyahu - both leaders criticize Tehran and, obviously, Trump's help will only strengthen Israel's security. Syrian strategy and priorities of the current US administration in this country aren't completely clear yet, but there are reasons to believe that Trump's team will try to separate Russia's and Iran's goals in Syria by signing separate agreements with Moscow - this possibility is at least discussed at the level of informed experts. Luckily for Iran, Donald Trump has limited opportunities of signing any deal with Moscow due to the continuing accusations that members of his administration have ties with Russia. However, the possibility of Iran and Russia having different interests in Syria at a some point is quite possible: this is evidenced, among other things, by Moscow's calm reaction to the Israeli Air Forces' air strikes on Hezbollah's positions in Syria.
As we can see, further development of the situation around Syria depends on many things. Internal political situation in the United States, Trump's foreign policy priorities, Russia's global interests and US-Russian cooperation in the international arena, changing dynamic of Turkish-Russian and Turkish-American relations, which is difficult to predict due to constantly changing rhetoric, Saudi Arabia factor and its regional fught against Iran from Yemen to Syria, Israel's policy in the region - these and many other components, as well as their impact on Iran's domestic policy and economy, will play a major role in shaping the foreign policy agenda of the Islamic Republic of Iran under newly elected president. However, even now we can say with confidence that Hassan Rouhani has to overcome the most acute geopolitical challenges during his second presidential term.
