Lawmakers were apparently not convinced with President Hassan Rouhani's answers Tuesday to their questions on the deteriorating economic conditions. The parliament had invited the president to learn more about his administration's handling of the economy following a new round of US sanctions.
It was the first time Rouhani had been called by the MPs in his five years in office. Lawmakers, especially his political opponents, demanded answers to a wide range of key issues, namely rampant smuggling, US banking sanctions, rising unemployment, weak economic growth and the unprecedented tanking of the rial, which has lost more than half its value since April.
The president defended his government’s performance, saying that foreign pressure is partly to blame for the deteriorating situation and called for harmony and national unity to weather the crises, Tansim News Agency reported.
Smuggling
He said smuggling had reduced significantly during his tenure, adding that 4.5 years ago, $25 billion worth of goods were smuggled every year but the figure has now fallen to $12.5 billion, ISNA reported.
“In order to prevent smuggling, we need to produce quality products,” the president stressed, saying that fighting contraband demands strong collective action that is not the sole premise of his administration.
Banking Sanctions
On the banking restrictions, he said the situation had improved considerably after the conclusion of the 2015 nuclear agreement and domestic banks could establish relations with a large number of foreign financial institutions.
Rouhani, however, recalled that the banking problems are also caused by the fact that parliament has not yet passed the necessary measures to facilitate reforms demanded by the Financial Action Task Force, an inter-governmental organization which underpins regimes combating money laundering and terrorist financing.
In June, FATF said Iran had until October to complete the reforms or face consequences that could further deter investors from the country.
Creating Jobs
Rouhani defended his government’s performance in reducing the unemployment rate, saying that an average of 700,000 jobs was created annually over the past two years.
However, he acknowledged that more practical steps should be taken to reduce the dole queues. Official data put the joblessness rate in the region of 12.1%. Independent observers say the figure is much higher.
Economic Growth
In his speech before taking the questions in the chamber, the president said he took office when economic growth was deep down in negative territory, but he had managed to lift growth and curb inflation.
He added that the US withdrawal from the nuclear accord and the reimposition of sanctions, coupled with psychological warfare, threw the foreign exchange market into turmoil and led to the steep decline in the value of the national currency.
Measures have been taken by the administration to improve the situation, Rouhani said. He did not elaborate.
Not Satisfying
In voting at the end of the session, lawmakers expressed dissatisfaction with Rouhani’s responses to four of their five questions. They only found his answer on banking issues satisfying.
Rouhani rejected increasingly shrill voices among the people and political and economic observers that the country is facing an unprecedented “crisis” and said it can weather the storm through resistance and unity of purpose.
Mounting Criticism
Rouhani, a pragmatist who reduced tensions with the West by striking the nuclear deal, is now under fire from all sides of the political spectrum for economic mismanagement and everything that has gone wrong over the months and years.
On Sunday, the parliament sacked his economy minister for his inability to check the downward spiral in the economy. In early August his labor minister was kicked out and last month Rouhani was forced to appoint a new governor for the dysfunctional central bank.
As per law, lawmakers have the right to impeach the president for his lack of competence. However, the standing opinion is that the ruling system will not go that far for reasons of expediency, internal stability and national harmony.
