Monday,20 November, 2017
Current issue | Issue 1342, (27 April - 3 May 2017)
Monday,20 November, 2017
Issue 1342, (27 April - 3 May 2017)

Ahram Weekly

All about the economy

Iranian President Hassan Rouhani’s prospects for a second term in office will depend on how far he can convince the electorate that he can improve the country’s economy

All  about the economy
All about the economy

Iranian state TV news programmes or coverage of the country’s upcoming presidential elections tend to be full of the angry faces of ordinary Iranians complaining about the economy or unemployment.

Young people talk of their hardships in finding jobs and not being able to pay the rent or marry, and older people talk about increases in the price of food, putting pressure on domestic budgets. All of them say that the president must do better on the economy, the economy, the economy.

No one was allowed to talk quite so freely on such matters on TV in the past, but the election period is a time when otherwise forbidden conversations can take place. However, state TV is also run by the country’s conservatives, and supreme leader Ali Khamenei also directly appoints its CEO. It therefore represents hardline thinking, and it has made the economy the main topic of discussion during the presidential debates.

Iranian President Hassan Rouhani, who is running for a second term in May’s elections, was elected four years ago by promising Iranians that he would resolve Iran’s lagging nuclear confrontation with the West and improve the country’s economy.

The nuclear issue was resolved after two years of negotiations, and following the agreement of a deal some Western investors and European banks have restarted business in Iran.

However, there is still a long way to go before Iran can recover from the damage the sanctions have caused to its economy, even if its reputation among investors has been slowly improving.

The country’s inflation rate, reported to be around 40 per cent in 2013 when Rouhani was elected, has come down to 7.5 per cent, according to the IMF. This achievement has come from a disciplined monetary policy that has included a reduction of interest and foreign exchange rates.

A recent IMF report on Iran said that “the Iranian economy has seen an impressive recovery following sanctions relief last year.” However, the country’s activities in the region and its meddling in regional affairs have caused uncertainty about the future of the Iranian nuclear deal, with the new administration in the US showing less favour towards it than its allies.

Despite the achievements Rouhani have made during the four years of his presidency, he has a long way to go to satisfy the public even with the economic figures bearing witness to his hard work. If his opponents are ready to grill him during the presidential debates over the economy and unemployment, he might also be ready to compare Iran four years ago to where the country stands today.

Making the historic nuclear deal with the West, absorbing $9.5 billion in foreign investment, increasing Iran’s oil output to the level of the pre-sanctions period, and renewing Iran’s crippled domestic aviation may not be tangible achievements for the public, but these things cannot be hidden from the eyes of the country’s political leaders.

Among the six candidates who have been approved to run in the elections, Ishaq Jahangiri, Rouhani’s first vice-president, seems to be acting as Rouhani’s defender in the debates rather than being a real opponent.

Of the other four qualified candidates, two of them, Mustafa Mir-Salim and Mustafa Hashemitaba, are extras, and only Ibrahim Raisi and Mohamed Baqer Qalibaf look like real contenders to Rouhani.

Jahangiri will likely leave the race in favour of Rouhani, but it is not clear which of Qalibaf and Raisis will remain in the race to compete with Rouhani on election day.

But despite the increased prices of chicken and yoghurt in Iran, routinely complained of on television, millions of Iranians are thankful for the nuclear deal and for their country’s better image abroad thanks to the work of Rouhani’s Foreign Affairs Minister Mohamed Javad Zarif.

Elections propaganda notwithstanding, it is not necessarily the case that Khamenei is unhappy about the nuclear accord or reduced tensions with the West.

With all the uncertainty in the United States over the policies to be pursued in the Middle East, Iran’s political leaders would be making a huge mistake if they replaced Rouhani with hardliner Raisi or former Revolutionary Guards commander Qalibaf.

Challenging Rouhani is good for the system as it is a way of telling him that he and his government will not easily be granted a second term. But Rouhani’s performance before election day on 19 May will now be all about satisfying Khamenei that his next term in office will have less to do with international affairs and more to do with economic improvements.

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