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In a move that signals a clear continuation of the economic policies of the slain regime president Ebrahim Raisi, his successor Masoud Pezeshkian has recently emphasized the need for “intervention and surgery” in the nation’s economy. Rather than focusing on lifting sanctions or fostering economic growth, as promised during the electoral campaign, Pezeshkian has been preoccupied with discussions about the “unrealistic” pricing of fuel and the necessity for economic “surgery.”
In May 2022, Raisi introduced his controversial “economic surgery” plan to overhaul the country’s economy by cutting subsidies and increasing taxes. This approach was widely criticized both by state-run media and the Iranian public, who saw it as a direct attack on their livelihoods. During his election campaign, Pezeshkian spoke of following Raisi’s lead while simultaneously lamenting the poor state of the economy. However, his recent rhetoric seems more focused on imposing further burdens on the Iranian people.
On September 3, while attempting to obscure his true intentions in a confusing play of words, Pezeshkian said, “We must inform the people about the necessary interventions in the economic arena and, naturally, what surgeries are needed to get the country out of this situation.” Speaking to an audience described by state media as “economic activists of Khorasan Razavi province,” Pezeshkian did not provide details about these “surgeries.” However, his remarks suggest continuing policies that could lead to higher prices for goods and the elimination of certain social services and subsidies—measures likely to provoke further public discontent.
Given the sensitivity of this topic, especially in light of the 2019 protests against gasoline price hikes, Pezeshkian sought to mitigate the negative impact of his statements. After the meeting, he posted on X (formerly Twitter), saying, “I told the economic activists of Razavi Khorasan that in any economic action and surgery, the principle is public consent. Without the people’s support, doing big things is impossible.” This message was also prominently featured on his official website.
#MasoudPezeshkian’s Economic Policies: A Catalyst for Unrest and Uprising in #Iranhttps://t.co/8rJDXtdQSp
— NCRI-FAC (@iran_policy) August 29, 2024
Pezeshkian’s recent comments are not his first acknowledgment of the country’s dire economic situation. A week earlier, he remarked, “There is no logic in buying gasoline at the free market price in dollars and selling it at a subsidized rate. I, as the government, do not have the money for wheat, medicine, inputs, or pensioner salaries, yet I sell gasoline bought at 50 tomans per dollar for 10 tomans. Which logic accepts that we are doing this?” These remarks sparked widespread discussion on social media and among local media, raising concerns about potential fuel price increases.
On August 31, Pezeshkian lamented the country’s economic woes in a television interview, stating, “They told us we inherited something good, but we inherited something with no money in it.”
The following day, the regime’s Minister of Economy, Abdolnaser Hemmati, bluntly addressed the regime’s economic bankruptcy, saying, “I see that sometimes friends say, ‘We handed over a saddled horse to this government.’ What saddled horse? We are now dealing with 40% inflation, an exchange rate of 60 tomans, a 20-30% budget deficit, and an unemployment rate of 12-13%.”
In a rare moment of confrontation, Hemmati criticized Pezeshkian’s proposal to align gasoline prices with international rates, pointing out the hypocrisy of selling cars domestically at exorbitant prices compared to their international value. This sentiment was echoed by the state-affiliated Jamaran News, which questioned Pezeshkian’s understanding of subsidy logic, emphasizing that global pricing should apply to all goods, not just fuel.
Grim Forecast of #Iran’s Economic Prospects Under Pezeshkianhttps://t.co/nlvKw2HUrb
— NCRI-FAC (@iran_policy) August 23, 2024
The dire state of Iran’s economy is further highlighted by the struggles faced by ordinary citizens and small businesses. The head of Iran’s Stationery Union recently admitted that “the low purchasing power of the people has caused significant challenges for the stationery industry,” leading to the closure of around 100 shops in Tehran alone in 2023. He warned that if economic conditions do not improve, the same could happen again this year.
In an introductory meeting for the new Minister of Labor, Pezeshkian’s VP, Mohammadreza Aref, acknowledged the country’s economic crisis, revealing a $17 billion trade deficit excluding oil. “This year, we had $50 billion in exports and $67 billion in imports. To fulfill even our minimal duties, we are facing a deficit of between 850 to 1,000 trillion tomans,” he stated, pointing out that Iran’s labor force participation rate is significantly lower than the global average, particularly for women.
As Pezeshkian signals his intent to continue the economic policies of his predecessor, the Iranian people, already drained of their wealth and prospects, are at a critical juncture where they have little left to lose. With major uprisings since 2017 calling for regime change, Pezeshkian’s approach risks igniting yet another significant wave of unrest. This time, however, the regime faces a more precarious situation, with less internal unity and greater vulnerabilities on multiple fronts.
