In Iran, the economy is either doing well or stumbling, depending on who is commenting. Various members of the Iranian government have noted trouble spots in the past year, focusing on issues of corruption and a lack of substantial growth. The unemployment rate among young people remains high and other issues continue to hamper improvement. This is a particularly hot-button issue in light of the election, which is scheduled for this May.
In this context, Supreme Leader Khamenei’s comments on the economy may be telling regarding Rouhani’s chances of reelection. Khamenei has said the current economic policies have fallen short and he called for the creation of a resistance economy to create jobs. The pressure is growing on Rouhani to produce some results.
“I feel the pain of the poor and lower class people with my soul, especially because of high prices, unemployment and inequalities,” said Khamenei during his New Year’s message. “The government has taken positive steps, but they do not meet people’s expectations and mine.”
Hardliners, with Khamenei’s backing, have repeatedly criticized the actions of Rouhani during his time in office, particularly the JCPOA. Despite promises of a lift in the economy as a result of various sanctions being lifted, the massive economic growth has not materialized. Khamenei’s resistance economy would be focused on making Iran more self-sufficient, versus opening Iran up to international trade and investment.
Rouhani’s picture of the economy differs from Khamenei’s, as he noted economic achievements. “What we achieved in curbing inflation [and boosting] economic growth and jobs in the past year was unprecedented in the past 25 years,” said Rouhani in a video message to the country.
Despite the lifting of various international sanctions, the world’s top banks have refrained from doing business with Iran, due in part to fear of being penalized by the U.S. and sanctions that remain in place. Although inflation has dropped to the single digits, there are signs that the lack of growth in the non-oil sector of its economy could be related to a lack of access to finance.
Others see Khamenei’s comments as part of an effort to distance himself from Rouhani prior to the election, aware that people could express their discontent during the election.