Rouhani Attacked Over Economy During Rancorous Election Debate

(Bloomberg) -- Iranian President Hassan Rouhani clashed over the economy with a leading conservative rival during the first of three televised election debates on Friday, the most heated public exchanges yet of a campaign that will deliver a verdict on four years of engagement with the West.

Rouhani, a moderate cleric who won a landslide victory in 2013 and then ended Iran’s economic and isolation through a landmark nuclear deal with world powers, defended his record during a sustained attack by Tehran Mayor Mohammad Baqer Qalibaf. “Optimism in the future has increased, our youth now have hope,” Rouhani said, insisting that Iran was now a more favorable place to do business. “If there is no trust in investing, jobs are not created.”

Qalibaf, one of two conservative candidates considered to have a chance of denying Rouhani a second term amid widespread disillusionment with the pact, took on the president, accusing him of failing to keep his promise to create a large number of jobs.

“Dear people, is that how you feel, that the business environment has improved?” Qalibaf asked viewers. “Creating jobs, that’s what gives hope. Investment can come from both abroad and locally, good management is what’s needed.”

Under Rouhani’s leadership, the Islamic Republic has emerged from more than a decade of sanctions imposed over its nuclear program. The economy is growing, oil output is up and foreign companies -- enticed by a largely untapped market of 80 million -- are exploring opportunities. Disenchantment has grown, opinion polls and his opponents suggest, with few benefits or new jobs yet to reach the majority of poorer Iranians.

Khamenei Ally

All six candidates participated in the live event, each answering the moderator’s questions on matters ranging from social inequality to housing and the environment, and delivering rebuttals.

Qalibaf overshadowed other challengers approved by the Guardian Council to run from a field of 1,600 applicants, including Ebrahim Raisi, a hardline cleric and ally of Supreme Leader Ayatollah Ali Khamenei. Vice President Eshagh Jahangiri, who has indicated he would campaigning alongside the president rather than against him, was supportive of Rouhani.

“Qalibaf is clearly emerging as Rouhani’s key challenger, while Raisi is taking a backseat,” said Ariane Tabatabai, a visiting assistant professor of security studies at Georgetown University in D.C., who follows Iran closely, “This doesn’t bode well for Raisi since he doesn’t enjoy the same name recognition, and really needs to perform well in the debates to get his name out there.”

A conservative victory could further inflame tensions between Iran and the Trump administration, which has assured America’s Sunni allies in the Middle East that it wants to roll back the regional influence of Shiite Iran. Khamenei backed the diplomacy that lifted sanctions in early 2016 but has been increasingly critical of Rouhani’s government and its pursuit of foreign investment.

Two more debates are scheduled on the economy and politics before the May 19 vote, according to state-run media.

To contact the reporters on this story: Ladane Nasseri in Dubai at lnasseri@bloomberg.net, Golnar Motevalli in Tehran at gmotevalli@bloomberg.net.

To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net, Mark Williams, Stuart Biggs