Before weighing the performance of governments, including that of President Ebrahim Raisi in his first year in office, you need to look at their campaign promises and the extent to which they’ve been fulfilled.
The election promises of Raisi, per se, suffered from stark contradictions with the ground realities, which made their realization impossible, Mousa Ghaninejad, a prominent economist, prefaced his write-up for the Persian economic daily Donya-e-Eqtesad with this note.
A translation of the text follows:
First, let’s look at promises pertaining to the relationship between the government and the market. As a candidate, the president promised not to intervene in market mechanisms. He said the government would increase supervision over the market, control prices and reform the pricing system, which could be realized through the delegation of affairs to people.
This apparent contradiction suggests that the then candidate, current president and his economic advisors didn’t have a clear idea of market and pricing mechanisms. The president and his economic team have continued to repeat such remarks.
The next promise was about eliminating the interdependence of essential goods’ prices and foreign exchange rates, i.e., the fluctuations of exchange rates would no longer lead to fluctuations in the prices of essential goods. The truth is that most raw materials used for the production of essential goods are supplied via imports and naturally their prices are affected by changes in foreign exchange rates.
Is it possible to eliminate this interdependence? Can we produce all raw materials in the country? If yes, is it economically feasible? Is there any serious economic studies in this regard? The problem with the exchange rates, which goes back to more than four decades, is rooted in financial, monetary policies, budget deficit and increase in money supply.
You cannot control the exchange rates by suppressing the market just like you cannot control inflation by suppressing the prices of goods and services. One of the high-profile promises of then presidential candidate was to halve the inflation rate and land it in single-digit territory. However, close to a year into his presidency, the inflation rate is rising unabated and the purchasing power is shrinking continuously.
Commitment and Expertise
The production of four million housing units in four years and adding one million jobs per year was another unscientific, unpractical promise made by the president.
In view of sanctions, government interference in the market and the high business risk, making such promises was nothing more than sloganeering. Lack of a well-designed approach based on an expert assessment is the current administration’s main problem because it openly prioritizes commitment over expertise. This is not rational because accepting a responsibility without having the needed expertise is an act of irresponsibility. Period.
Showing loyalty to higher authorities is considered an expression of commitment in the administrative and political system. However, there is no specific indicator to measure this commitment. There have been high-ranking officials who, shortly after receiving the so-called “loyalty” medal, were accused of embezzlements and fled to Canada.
Expertise, however, is completely verifiable. You don’t need recommendations from “trustworthy” authorities to identify experts; a look at the academic, research and work accomplishments of individuals is sufficient.
In Iran, the juxtaposition of commitment and expertise has created a smokescreen, which leads to the banishment of experts in favor of loyalists. The smokescreen is sadly pervasive in the government of Raisi, which is the main reason behind the absence of a cohesive approach and the ineffectiveness of decisions.
Hopefully, the president and government officials would learn from the past year, give importance to national interest and delegate executive responsibilities to the countless experts we have in the country.
Aligning With the West?
But to those zealous “loyalists” who may chalk this advice up to aligning with the West or self-alienation in the face of western civilization, I by no means, believe the West is the Promised Land we should aspire to.
I’m talking about sticking to rationalism and scientific approach in solving problems and staving off ideological prejudice. Adherence to logic, wisdom and scientific approach can mostly be found in developed western societies, through which they have been able to achieve unprecedented progress. At the same time, Westerners have always used these virtues to the benefit of their people.
Of course, on some occasions, Iran’s national interests may be aligned with the foreign policy of some countries, both western and eastern. Here, the responsibility of the rulers is to take advantage of the opportunity realistically.
According to the teachings of economics, free trade at the international level is beneficial for all countries in the long run. But since, in general, the political rulers of countries do not believe in the teachings of economics and prefer political considerations over economic considerations, the international economic and political relations often become complicated. Under the circumstances, embracing the West or the East is as unwise as being anti-Western or anti-Eastern.
What saved the crisis-stricken Russia in the war with Ukraine, grave economic sanctions from the Western governments, from being caught in the trap of inflation and the devaluation of national currency was the well-thought-out monetary policies of the head of the Russian Central Bank, Elvira Nabiullina. She is a prominent economist, whose policies are in line with the latest scientific findings of the world’s top universities, especially those in the United States.
No one buys the argument that President Vladimir Putin’s closest aide and his economic mastermind has become bewitched by Western civilization. At the same time, nothing in Russia prevents Nabiullina from tapping into the latest achievements of economics in Western academic circles for the benefit of her country.
Seriously, what do our economic policymakers know about the monetary policy of the Central Bank of Russia and the secret of its success, now that Iranian people are grappling with high inflation?
