Tech Industry’s Development Challenges Iran’s Crackdown on Returned Expatriates

The two factions of mainstream Iranian politics – led by Supreme Leader Ali Khamenei and President Hassan Rouhani – have been pursuing separate strategies for dealing with this situation. While Khamenei continues to advocate for a “resistance economy” that uses domestic commerce in an attempt to insulate the country for foreign pressures, the pragmatic followers of the Rouhani faction have been selectively reaching out to the international community for foreign investment in hopes of spurring a recovery.

The Financial Times piece looks at the tech industry from both of these angles. On one hand, it suggests that domestic start-ups have created jobs and mitigated the otherwise crippling effects of sanctions and poor government policy. But on the other hand, it also points to the role of returned expatriates in running those start-ups, before quoting experts as saying that Iran’s economic future is ultimately inseparable from its foreign policy and its generally combative relationship with the Western world.

The report also notes that dual nationals, despite having contributed to the development of the Iranian tech industry, are under pressure from hardliners whose ideological commitment to a resistance economy is underpinned by resistance to virtually any foreign influence at all. The Financial Times credits Rouhani with shielding expatriate tech experts up to this point, but this account of the president’s role is widely disputed.

Certainly, Rouhani took office in 2013 and then secured reelection in 2017 on promises of a freer and more open Iranian society, even explicitly signaling that expatriates were free to return without fear or repercussion. But in reality, little clear action has been taken toward fulfilling these promises and dual nationals have faced extraordinary pressure throughout Rouhani’s tenure.

This fact was brought more fully into the spotlight this week amidst reports that Kaveh Madani, the head of Iran’s Environmental Protection Agency, had abruptly resigned while on a trip abroad. Agence France Presse reported that Madani had been viewed as symbol of Iran’s relationship with its own expatriates, seeing as he had left a position as a university professor in London in order to assume his role in Tehran.

Questions arose about his place in the political establishment after he was briefly detained in February as part of a broader crackdown on environmental activists. Following those arrests, another dual national, an Iranian-Canadian professor and founder of the Persian Wildlife Heritage Foundation named Kavous Seyed-Emami, died in custody in an incident dubiously described by regime authorities as a suicide.

AFP notes that while Madani escaped the brunt of the security crackdown, he was subsequently targeted by hardliners in a campaign of character assassination, being described as “debauched” after images surfaced that purportedly showed him dancing and drinking alcohol while out of the country. These criticisms led to calls for his firing, and it is not clear that the Rouhani administration undertook any measures to defend him. It was under this pressure that Madani resigned and announced that regime authorities had “realised that finding a guilty person, enemy and spy is much easier than accountability and participation in resolving problems.”

Previously, Madani had observed that other expatriates were watching his situation in order to determine their own prospects. “If I succeed, we might see more people coming back to help the government,” he said. But now that he has been forced out, the Islamic Republic is arguably facing dim prospects for foreign investment, even in industries like tech, where a handful of expatriates have flourished.

Madani’s resignation also deals another blow to Rouhani’s reputation in terms of his efforts to live up to a reform-minded campaign platform. Digital Journal reported on Tuesday that Iranian lawmakers had met to discuss the hardline campaign against environmentalists, and that supposedly moderate allies of the president had decried the efforts to portray individuals like Madani as spies. But such criticism raises questions about what measures, if any, had been taken to counter these efforts.

Digital Journal observes that Iran has two competing intelligence services, one under the control of the president and one under the control of the Iranian Revolutionary Guard Corps. And yet it appears to be only the latter that is setting policy with regard to dual and foreign nationals, despite the fact that their positions are ostensibly opposed by the Rouhani administration and by the numerous “reformist” lawmakers who have won office since Rouhani’s first election.

Of course, these raises questions as to why some expatriates have enjoyed success in the tech industry, as per the Financial Times, if they have not been seriously shielded by Rouhani. The answer to this question may relate to the role that domestic technological development could play in keeping foreign influence at bay as it relates to the internet and social media.

In the midst of mass anti-government protests in December and January, the government briefly blocked the popular instant messaging app Telegram, but declined to make the ban permanent. By some accounts, this decision was necessitated by the high level to which Telegram has been integrated into the Iranian economy and mainstream communications. Since then, hardliners have continued to press for a permanent ban, but many have conceded that the only way this would be feasible is if Telegram was broadly replaced by a domestic alternative.

On Sunday, the New York Times published an account of Iran’s relationship with Telegram. It emphasized that political conservatives see the app as an “electoral threat” and a leading cause of recent unrest. As a consequence, Iranian officials have begun boasting that a viable domestic alternative is forthcoming, but these claims have naturally been disputed by tech experts and by ordinary Iranians who insist they will never open themselves up to more aggressive government monitoring by adopting a domestically made app.

In any event, if the government does succeed in creating a Telegram alternative, it will likely be with the help of expertise acquired outside of the country. As has been demonstrated at various times in the recent past, this is something that hardliners and the Revolutionary Guards are apparently willing to accept in some small measure, provided that it is in service of keeping further foreign influence at bay. Indeed, while praising the success of returned expatriates in the Iranian tech industry, the Financial Times cites companies that are partly state run, thereby hinting at the constraints under which those Iranian entrepreneurs are often operating.