Disagreements in Raisi’s Economic Team

ECONOMYCOMMENTARY 28.07.2022
Yasir Rashid Researcher

The differences of opinion among members of Raisi's economic team can be considered as one of the reasons for the failure of the Raisi government in the economic sphere.

According to a report published by Ecoiran, the dispute between Mohsen Rezaei, Vice President for Economic Affairs, and Ehsan Khandozi, the Iranian Minister of Economic Affairs and Finance, over the interbank interest rate caused differences of opinion in Ebrahim Raisi's economic team. According to the report, while Khandozi wanted the Central Bank to reduce the interbank interest rate, Rezaei emphasized that the interest rate should not be lowered due to high inflation. Considering that the Central Bank of Iran did not reduce the interest rates in the main markets, it is seen that the bank acted in accordance with Rezaei's opinion. This issue points to serious disagreements within Raisi's economic team. In addition to these developments, another disagreement between Khandozi and Rezaei may be the subject of the FATF (Financial Action Task Force) in the future. Rezaei’s appointment as the Vice President for Economic Affairs in the Expediency Discernment Council of the System, while he is a staunch opponent of the FAFT, paved the way for predictions that Raisi will implement austerity measures and Iran's relations with the world will be downgraded to a negative level. However, in line with the political views of Khandozi, such as increasing exports and disapproving FATF, it is unlikely that Khandozi will have differences of opinion with Rezaei on the implementation of economic policies, including foreign trade.

Earlier, the disagreements between First Vice President Mohammad Mokhber and Rezaei led to Rezaei's expulsion from the government’s Economy Commission in April 2022. At the time, Rezaei and Sowlat Mortazavi, Vice President for Executive Affairs, were reportedly dismissed from the Economy Commission with a decree signed by Mokhber. In the decree, it was stated that this action was implemented on the basis of the Article 138 of the Constitution of the Islamic Republic of Iran and the approval of the Council of Ministers. According to the Article 138 of the Constitution, the Council of Ministers has the right to lay down rules, regulations, and procedures for performing its administrative duties, ensuring the implementation of laws, and setting up administrative bodies. Mohammad Mokhber was appointed in charge of coordination in the Economic Commission by Raisi's order.

This development has been mentioned as an example of disagreements among Ebrahim Raisi's economic team. It was also previously reported that Mokhber and Rezaei could not agree on the implementation of the government's economic policies. For instance, it was told that Mokhber did not attend the government's Economic Coordination Headquarters meeting chaired by Rezaei on the first weekend of September 2021. Although the reason why Mokhber did not attend the meeting was declared as a mild illness, it is important to notice that the Economic Coordination Headquarters was not informed about this issue before.

Disputes among Ebrahim Raisi's economic team were predictable earlier. In other words, although the Raisi's economy team has united under the roof of the resistance economy policies, it was suggested that there would be no harmony in the implementation of economic programs and policies due to the economic perspectives and backgrounds of those in charge.

The issue of coordination and leadership in the economic team represents one of the potential conflicts. Following the appointment of Mokhber as the First Vice President, Raisi announced that Mokhber would be responsible for the coordination of the government’s economic team. However, Mohkber’s responsibility as the leader of the government’s economic programs has become questionable after the appointment of Mohsen Rezaei. Thanks to the appointment, Rezaei has become responsible for implementing the economic decisions of the Council of Ministers, in addition to his duties as the Vice President for Economic Affairs, the Secretary of the Supreme Economic Coordination Council, and the head of the government's Economic Coordination Headquarters. However, before accepting the position of the First Vice President, Mokhber wanted more authority and to establish his own economic team.

Rezaei and Mokhber are not equal in terms of economic performance and experience. In the economic sphere, Rezaei does not have the necessary administrative experience compared to Mokhber. Rezaei had an influence on the establishment of Khatam-al Anbiya Construction Headquarters. However, Mokhber has been successful while running the Execution of Imam Khomeini's Order, the largest economic institution under the umbrella of the Supreme Leadership. In addition, Mokhber has proven himself by establishing the Barakat Foundation. He has created approximately 800,000 employment opportunities at the Execution of Imam Khomeini's Order. Moreover, the Barakat Foundation, which includes 40 companies, is actively working to create employment opportunities and to provide drugs and medical treatment. The first local COVID-19 vaccine is one of the most important achievements of the Barakat Foundation. On the other hand, Rezaei does not have an applicable and ready economic plan yet. He is remembered especially for strange slogans during election campaigns. For this reason, in the implementation of economic policies, it seems likely that the parallel responsibilities of the two figures will lead to a vacuum in Raisi’s economic team. 

As the recent developments show, Mokhber seems to have succeeded in proving his superiority in the cabinet by excluding Rezaei from the government's Economic Commission. In addition, Mokhber is seen as more proficient in economy with compare to Rezaei, and he seems to have the strong support of Iranian President Raisi. In other words, it is possible to say that Mokhber is the figure that will determine the economic policies of the Raisi government from now on.

As a result, the differences of opinion among the members of the Raisi's economic team can be considered as one of the reasons for the failure of the Raisi government in the economic sphere. In addition, since those in charge of the economy in the current Iranian government have different economic views, it can be foreseen that the economic disputes in the Raisi government may intensify until the end of his presidency. 

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