By bne Tehran bureau
Iran's former economy minister under President Hassan Rouhani has announced his support for so-called reformist presidential candidate Masoud Pezeshkian. Ali Tayyebnia is positioning himself as a future economic leader, following the return of other former technocrats and diplomats to the frontlines.
A run-off presidential election will be held this week after no candidate secured a majority in the first round held on June 28. Meanwhile, the run-up to the next ballot is becoming heated, with increasing numbers of groups piling in on the prospect of a reactionary presidency under the control of Jalili.
During his four-year tenure, inflation dropped dramatically from 34.7% in 2013 to 9.7% in 2017, achieving single-digit inflation in his final two years. This remarkable reduction in inflation rates earned Tayyebnia widespread recognition as one of the most successful economy ministers in recent history.
His announcement flies directly in the face of the Jalili campaign, which has struggled to contain criticism from business groups for his knee-jerk comments and his worrying ideas on supporting the national economy, which has suffered from years of inflation under the former Raisi administration, which he aligned himself with.
In a video message, Tayyebnia expressed his full support for Pezeshkian and highlighted his deep understanding of the public's hardships. 'As an economics teacher, I am acutely aware of the people's suffering and feel it is my duty to effectively work towards alleviating their pain,' he said.
He added the severe economic challenges faced by the Iranian populace, including rampant inflation, poor business environment, low national income growth, widespread poverty, corruption, and high unemployment, especially among educated youth and women.
Tayyebnia pointed out that the country's long-standing economic difficulties stem from its state-controlled, oil-dependent economy, exacerbated by poor management and international sanctions, something the other side sees as a net benefit.
He criticised previous administrations - not naming Raisi directly - for failing to deliver sustained solutions to inflation, unemployment, and economic stagnation.
'Governments have repeatedly pledged to combat these issues, but why have we only seen brief periods of success?' he questioned, calling for a more consistent and effective approach to economic management.
Economy, the core of upcoming debates
Following the Tayyebnia announcement, capital market expert Mehdi Souri, speaking to Iran Labour News Agency said, 'We don't expect business conditions in the country to become rosy with Mr Pezeshkian coming to power, but most people are worried that with Mr Jalili, everything will move towards nationalisation. In many areas, the justification for investment would decrease, and thus, they see Pezeshkian as a way to avoid this risk.'
Souri highlighted concerns about Jalili's economic approach, stating, 'Not only in the capital market but also in the business environment, we see that producers are concerned that if Mr Jalili becomes president, they must think seriously about preserving their businesses. There are many worries in the production sector, and there's no shortage of concern in the Chamber of Commerce.'
The expert criticised Jalili's perceived economic philosophy, saying, 'We've repeatedly heard from Mr Jalili that people should invest their money in specific projects. This means the government decides where people invest their money, essentially solving the government's financial problems instead of people getting returns on their investments.'
Regarding Jalili's stance on currency policies, Souri said, 'Mr Jalili's view favours command pricing and the continuation of the dual exchange rate of the Raisi era.'
In contrast, Souri spoke more positively about Pezeshkian's economic team, particularly mentioning Ali Tayebnia. 'Mr Pezeshkian introduced Tayyebnia yesterday, whom many know as a knowledgeable manager with a defensible track record,' Souri said.
Economists unhappy with state of economics
Prominent Iranian economist Saeed Laylaz has offered a stark assessment of how the country's economy might react to victory by presidential candidates Masoud Pezeshkian or Saeed Jalili in the upcoming election.
Speaking to Khabar Online, Laylaz said, 'It's clear that the market's reaction to Jalili's victory would be very different from Pezeshkian's. Jalili doesn't hide that he wants to impose a closed, backward-looking economy on Iran.'
Laylaz warned that Jalili's approach would likely involve 'maximum government intervention in the economy and minimal private sector participation,' which would provoke a market reaction. He added, 'If Jalili wins, foreign policy will also become more closed, and we'll see negative reactions in the stock market and currency market.'
Liberal-leaning Laylaz stressed the importance of public trust and participation. 'The next government has no choice but to extend its hand to the people. We no longer have infinite resources as rent and must run the country with people's capital,' he said.
He criticised recent economic policies, stating, 'We've plundered the Iranian masses in the last six years. We've had wealth creation, but it hasn't reached the people.' He claimed that much of this wealth has left the country, asserting, 'All the money stolen from the tables of the deprived is in Canada.'
The economist emphasised the need for a technocratic approach, saying, 'A government formed with maximum participation, with less ideological role and colour, and dealing with issues technically, is what we need today.'
Laylaz also downplayed the primacy of foreign policy in solving Iran's economic issues. 'I attribute an important role to foreign policy, but it's not determinative,' he said. 'We must seek the majority of Iran's issues internally, in policies and domestic situations.'
Despite acknowledging Iran's challenges, Laylaz expressed optimism about the country's economic potential. 'We are one of the best countries in the Middle East. While under the most unjust sanctions in history for over ten years, we still have good oil revenues. Our economy is also diverse and good,' he concluded.
Ali Akbar Salehi, who previously headed Iran's Atomic Energy Organization, recently stated that the next Iranian president will inevitably need to consult experts regarding Iran's potential FATF membership. The Financial Action Task Force (FATF) is a global watchdog that sets standards to combat financial crimes and maintain the integrity of international financial systems.
Salehi also honoured the memory of Hossein Amirabdollahian, the late Iranian Foreign Minister. Based on his interactions with Amirabdollahian, Salehi revealed that dialogues with the United States have been ongoing. 'Despite fluctuations, it would be inaccurate to claim that negotiations [between Iran and the US] have halted,' Salehi remarked.
The question of adopting FATF standards has sparked debate within Iran's political circles. Proponents argue that compliance is crucial for Iran's economic well-being and global integration. Critics, however, fear that adhering to FATF guidelines could compromise national sovereignty and leave Iran vulnerable to external pressures.
