Economy, Domestic Economy
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Economy No. 1 Focus of Gov’t

Economy No. 1 Focus of Gov’tEconomy No. 1 Focus of Gov’t

President Hassan Rouhani and his allies in Iran’s new parliament will set their sights on rebuilding the economy, Bloomberg reported in its analysis of the post-election scene.

With economic recovery hinging on foreign investment, Rouhani’s government is seeking to pass laws that would attract international oil companies and make doing business in Iran easier for foreigners.

 Next Presidential Election

After securing a landmark nuclear accord with world powers that lifted a raft of sanctions, Rouhani is now seeking to translate his diplomatic coup into benefits for Iranians before next year’s presidential election, when he might seek a second term.

Presenting a five-year development plan to the outgoing parliament in January, Rouhani said the government is targeting as much as $50 billion in investment a year to boost growth and create jobs.

Key to this will be upgrading oil infrastructure and investing in exploration to boost output of oil and gas. To achieve that, the Oil Ministry has devised new contracts linking fees paid to international companies to oil price movements. Some conservative politicians have vowed to oppose the plan, saying it amounts to squandering national wealth.

“More attractive packages for foreign companies could cause some issues with constitutional interpretations that may then create challenges in parliament,” said Ellie Geranmayeh, Middle East and North Africa policy fellow at the European Council on Foreign Relations in London.

Results published by local media showed that while none of Iran’s main factions had an overwhelming majority, reformists and moderates were headed for their best showing in parliamentary elections in more than a decade, when allies of then-president Mohammad Khatami held a majority in the 290-member Majlis.

 Economic Plight

Khatami was succeeded by Mahmoud Ahmadinejad, a former mayor of Tehran whose reign was marred by hyperinflation and economic hardship as the Islamic Republic reeled under international sanctions targeting its nuclear program. So when preliminary results on Sunday showed Rouhani’s allies in control of the capital’s 30 seats, reformists and moderates wasted no time in celebrating.

The reformist Aftab newspaper heralded “the soft breeze of victory” in a headline on its front page on Sunday.

“No one can resist the will of a majority and whoever is unwanted by the people must step aside,” former president Ayatollah Akbar Hashemi Rafsanjani and an ally of Rouhani, said on Twitter.

 Clerical Body

A list headed by Rouhani and Rafsanjani also took an early lead in a separate vote for the Assembly of Experts, a top clerical body tasked with selecting the Leader when the position becomes vacant.

Renowned conservative clerics Mohammad Taqi Mesbah Yazdi and Mohammad Yazdi, lost their seats, according to the initial vote count. Both have opposed reforms.

Together, Friday’s two elections could play a significant role in shaping the country’s direction, amid deep ideological differences over the wisdom of opening up to the international community.

“Figures such as the key leaders of the reformist bloc who have now been more empowered within the parliament could push Rouhani toward a reform agenda that’s not necessarily the administration’s priority,” said Geranmayeh.

 Global Arrogance

In a statement on Sunday, Leader Ayatollah Seyyed Ali Khamenei said Iranian politicians should remain cautious in their interactions with world powers.

“Progress doesn’t mean getting dissolved in the global arrogance,” he said, a term that refers to the US.

Parliament “will have heavy responsibilities when it comes to this,” he said.

Rouhani’s political weight helped advance his number one priority—sealing the nuclear deal with the US and five other world powers over more than two years of talks.

“That remains key to the future of his presidency,” said Saeed Laylaz, an economic expert.

Rouhani has done “a lot of jobs that at first seemed impossible”, he added.

Financialtribune.com