Moderation and Predictability

Lawyer at Central Bank of Iran
Moderation and Predictability
Moderation and Predictability

When Rouhani won the presidential election in June 2013, most observers billed his mandate as a victory of political moderation. Rouhani succeeded a president who prided in being unpredictable. Dismissing his foreign minister while he was on a mission to Senegal has been often cited as the most infamous example of Mahmoud Ahmadinejad’s unpredictability.

But thing did not end there. Frequent sacking of ministers and their deputies solely because of their disagreement with the president, unprecedented volatility in foreign exchange rates and the galloping  inflation, were a norm that had grave negative effects on people’s lives. Weary of these spontaneous and unprofessional ways, people voted for Hassan Rouhani to show their desire for change, namely economic and political tranquility.                

Rouhani’s background in rather successful negotiations with the P5+1 less than a decade ago inspired the people that he might be more fortunate than other candidates to reach a deal with the West and bring stability back to the society. With the passage of time, it could be fairly argued that people made the right choice. The initial nuclear deal was reached soon after Rouhani took office. The inflation rate has relatively slowed and the people’s tranquility is no longer disturbed by the nerve-wracking news of tensions between the executive and judiciary and/or the parliament.

The critical question now is whether the present is sustainable. The rate of inflation has reduced for successive months, but this achievement has been held in its tracks for more than three months. The executive branch has made efforts to maintain a decent relationship with the top law-making institution, but the consecutive rejection of the candidates for the ministry of higher education has created holes in that relationship.

And finally, the remaining time for forging a comprehensive deal with the West is fast running out. The future, thus, seems more unpredictable without any effective move by the government to alter the existing trend. Rouhani is rightly expected to have the key to address these challenges.

True, the appropriate solution for each of these challenges varies, but predictability, which is the essence of moderation, should be seen as the common element in those solutions. Whatever strategy the government decides on to check inflation, reduce tensions with the parliament, and move forward in nuclear negotiations with the West, it is of great importance that public opinion have a clear understanding of the objectives of the government and the bargaining power of the participants.

It is also crucial that the people know whether the government pursues suspension of the sanctions or their permanent removal, and whether it is acceptable for the government to extend the JPOA for an unlimited period. The masses also have a right to know about the demands of lawmakers from the government in terms of policies, the conduct of ministries and the government’s strategy to deal with such demands.

Likewise, the people should be informed about the government’s inflation target and whether the government intends to boost production and growth by injecting more money into the economy. Now is the time for Rouhani to talk directly to the people, respond to their expectations and make the future more predictable for them.

May be the outcome of his strategies would not be satisfactory and it is quite plausible that Rouhani would not be able to deliver in first years of office. But the society at large needs to be informed of the governments goals and objectives and the people should be given appropriate means to have a grasp of what is awaiting them. Only then the investment would improve and the economic volatility would dec line.

Moderation as predictability is far from giving lectures and trying to satisfy and please all stakeholders. Instead, it is based on appreciating the rational expectations of the masses and giving them the opportunity to organize their future endeavors.