Iranian Supreme Leader Ayatollah Ali Khamenei has again weighed into the debate over the state of the Islamic Republic’s economy a year after the much-hailed nuclear deal was signed between Iran and the Western powers. As ever, the supreme religious guide’s comments were a mix of frustration and “I told you so”.
Ayatollah Khamenei is the top official in the Islamic system and his speeches are parsed carefully to see whether they work in favour of President Hassan Rouhani or are critical of his agenda. The nuclear deal was brokered by Rouhani and his reformist allies, which helped them make big gains in the last election for Iran’s new parliament. But there are deep divisions at the top over how far and how fast the country should open up, with conservatives looking to sow distrust among the population for the reformists’ liberalization agenda.
In his latest speech, a day after the president’s latest on August 23, Khamenei hinted at the recent years of economic growth, but also said that the government must focus on delivering the national economic plan to boost production and revive Iran’s export sector. “Today, economic problems and challenges are top issues for the country, whose resolution depends on the thorough implementation of the ‘Resistance Economy’ policies,” the supreme leader was quoted as saying by his official website, leader.ir.
Iran’s ‘Resistance Economy’ is a so-called comprehensive economic initiative created by the supreme leader to wean the country off oil and gas revenues by boosting production and productivity elsewhere in the economy. Although regarded as a good thing in general, the problem with the Resistance Economy concept is it works against the Rouhani administration’s application to join the World Trade Organization in the next few years, as it is seen by some analysts as protectionist from the outset.
The supreme leader also weighed in on future growth areas of the Resistance Economy, but hinted at problems with the re-emergence of Iran as a global player. “Any project that interferes with the principles of Resistance Economy should be abandoned,” he stated.
But he also urged Iran’s citizens to start their own businesses by saying the government should hand over more affairs to the private sector and offer economic incentives as measures required to facilitate the plan’s implementation. “An important practical requirement for the implementation of the policies of the Resistance Economy is building a discourse to correctly delineate these policies and their effects by relevant officials,” the leader said.
He stressed the need to ease red tape in the production sector – Iran is one of the most bureaucratic systems in the region, with entire government departments created to deal with paperwork. Rouhani’s time in office has been focused on working to remove this red tape, but has only managed in modernising some sections of the huge government apparatus.
Pushing an international agenda
Moving onto foreign policy, Ayatollah Khamenei said the government should use its diplomatic resources to help develop ties with countries in different regions of the world. This follows Iranian Foreign Minister Mohammad Javad Zarif’s first ever trip to Cuba.
He also touched on the 2015 nuclear deal between Iran and world powers, called the Joint Comprehensive Plan of Action (JCPOA), which was signed between Iran and P5+1 (the US, Britain, Russia, China and France, plus Germany) to halt the progression of Iran’s nuclear programme.
He accused the American government of being unreliable in honouring its promises from the deal, as has been evident in recent months with several global banks not willing to trade with Iran because of worries over US retaliatory measures against companies doing business with the country. “This experience taught us that no promises of any US administration can be trusted,” he said.
The nuclear deal was intended to radically change Iran’s economic fortunes, but issues like the remaining banking restrictions and companies’ hesitancy over trading, as well as the risk and uncertainty of the upcoming 2017 Iranian presidential election have prevented many of the benefits. This is despite the UN nuclear watchdog, the International Atomic Energy Agency (IAEA), previously confirming Iran’s compliance with the terms of the deal.