The First Hundred Days in the Economy; From Raisi's Government to Pezeshkian's Government

The first hundred days of any government is a glimpse into its future policies. Franklin Roosevelt, who was President of the United States during the reign of Reza Shah and Mohammad Reza Shah, believed that the path to salvation from crisis must be laid in the first hundred days. François Mitterrand, the President of France during the presidency of Ali Khamenei and Akbar Hashemi Rafsanjani, also believed that the approach to reforms for public welfare should be shown to the people in the same first hundred days. John Major, who was Prime Minister of the UK during Akbar Hashemi Rafsanjani's presidency, considered the fundamental orientation of any government to be established in the first hundred days of governance. In this article, we will examine the record of the first hundred days of Masoud Pezeshkian's government and compare it with Ibrahim Raisi's government to gain insight into the economy in the coming years. The economic record of a government is the record of the ministries and organizations that manage the country's economy; we will gradually address these. The Ministry of Economy and Finance is responsible for macroeconomic policies, budget formulation and execution, oversight of banks, financial institutions, and the capital market, managing tax policies, encouraging domestic and foreign investment, and managing state assets. This task in Ibrahim Raisi's government was assigned to 42-year-old Ehsan Khandozi and in Masoud Pezeshkian's government to 66-year-old Abdolnaser Hemmati. Both hold PhDs in economics. Before his ministry, Ehsan Khandozi worked in institutions close to the Supreme Leader of the Islamic Republic, such as the Economic Council of the Islamic Republic of Iran Broadcasting and the Economic Commission of the Parliament, while Abdolnaser Hemmati worked as the head of the Central Insurance and the Economic Committee of the Supreme National Security Council and the Central Bank. Ehsan Khandozi's economic viewpoint was aligned with the resistant economy and self-sufficiency promoted by Ali Khamenei. Therefore, in the first hundred days of his ministry, he only recognized the private sector and the capital market within the framework of a resistant economy and support for revolutionary institutions, opposed joining the FATF under sanctions, and put surplus state assets up for sale to assist the budget. Abdolnaser Hemmati has a more open economic viewpoint and supports reducing the role of the government, private sector business, and joining the international community and the FATF. However, during these hundred days, he did not take action regarding liberalization or joining the FATF, just as he had not done during his presidency at the Central Bank. After three months and a few days, there is no significant difference in the records of the two ministers of economy and finance from Raisi's and Pezeshkian's governments in terms of combating rent-seeking and bias towards transparency and market economy. The Ministry of Oil's role in the Islamic Republic of Iran is to manage the extraction, production, distribution, and export of oil and gas and petroleum products, as well as international investment and cooperation. Jawad Owji and Mohsen Paknejad, both 55 years old (born in 1965), were appointed by Ibrahim Raisi and Masoud Pezeshkian, respectively, to the Ministry of Oil. Jawad Owji graduated with a bachelor's degree in petroleum engineering from the Oil Industry University, while Mohsen Paknejad graduated with a bachelor's degree in electrical engineering from the University of Tehran and a master's degree in industrial engineering from Amir Kabir University of Technology. Before his ministry, Jawad Owji was the CEO of the National Gas Company, Deputy Head of the Atomic Energy Organization, Oil Minister Advisor, Head of Fuel Supply Headquarters, Director of Gas Field Development Projects, Director of Oil Exports, and a main board member of the Central Oil Company of Iran. In the first hundred days of his ministry, Jawad Owji aimed to increase production and exports and initiate joint projects, especially with neighboring countries. Given the easing of sanctions by the US government, he was able to achieve successes in oil exports. In contrast, Mohsen Paknejad placed more importance on transparency and attracting foreign investment but failed to implement any of his plans to improve financial processes of contracts, create favorable conditions for attracting foreign investment, reduce domestic oil consumption, and develop renewable energy. The Ministry of Industry, Mine, and Trade is responsible for the development and competitiveness of domestic production, managing domestic and foreign trade, and providing administrative support for the expansion of small and large businesses. Seyyed Reza Fatemi Amin, at 47 years old, and Seyyed Mohammad Atabak, at 66 years old, became the ministers of industry, mine, and trade in the two governments of Ibrahim Raisi and Masoud Pezeshkian. The former holds a PhD in strategic knowledge management, while the latter has a master's degree in civil engineering from the University of Michigan in the USA. The economic viewpoints of these two ministers differ. Fatemi Amin, like many others in Raisi's government, believed in supportive policies and economic self-sufficiency and opposed joining the FATF, while Atabak, perhaps due to his education in the USA, showed a greater inclination towards foreign trade and attracting foreign investment. Before his ministry, Seyyed Reza Fatemi Amin held positions such as Deputy Minister of Industry, Head of the Industry and Mining Transformation Headquarters, and Investment and Participation Management of the Astan Quds Razavi. In contrast, Seyyed Mohammad Atabak was the CEO of one of the largest holding companies of the Mostazafan Foundation, Kaveh Pars Mining Industries Holding, which has stakes in cement, steel, aluminum, and mining industries. Additionally, Seyyed Mohammad Atabak was also the Economic Deputy of the Mostazafan Foundation. In the first hundred days of their ministries, both ministers had ambitious goals for their differing priorities. Fatemi Amin focused on supporting domestic producers and self-sufficiency, while Atabak sought to expand the competitiveness of domestic production and cross-border trade and attract foreign investment. During this three-month period, Seyyed Reza Fatemi Amin imposed tariffs on goods that had local counterparts, such as clothing and household appliances, collaborated with the Customs Organization and the police to reduce smuggling, and pressured the Central Bank to provide low-interest loans to domestic industries, especially small and medium-sized enterprises. He also committed to increasing steel production capacity to 40 million tons by 2026. In contrast, Seyyed Mohammad Atabak in Pezeshkian's government aimed to attract foreign investment, cross-border cooperation for the expansion of mining industries, and facilitate imports and exports. He reportedly signed agreements worth about $500 million in steel, aluminum, and copper mining industries with international companies without naming them and sought to attract the attention of Iraq, Turkey, and Qatar for joint extraction and processing projects of mineral resources. Atabak also reduced customs tariffs for the export of non-ferrous metals like copper and zinc and for the import of machinery and industrial technologies, and launched an "online platform" for transparency in government contracts. The Ministry of Cooperatives, Labor, and Social Welfare is supposed to support the vulnerable, workers, and expand employment in various economic sectors. Hajjatollah Abdolmaleki, 40 years old, and Ahmad Midari, 61 years old, were appointed as the Minister of Cooperatives, Labor, and Social Welfare in the governments of Ibrahim Raisi and Masoud Pezeshkian, respectively. Both hold PhDs in economics; the former from Imam Sadiq University, which was established to blend Islamic and human sciences, and the latter from the University of Tehran. Before his ministry, Abdolmaleki worked in conservative institutions related to the leader of the regime, such as the Deputy of the Imam Khomeini Relief Committee and a member of the Relief Committee's Board of Trustees, while Ahmad Midari served as the Deputy for Social Welfare in the eleventh and twelfth governments of Hassan Rouhani, a member of the Islamic Consultative Assembly, and an economic advisor in various institutions. Hajjatollah Abdolmaleki believed in Islamic and resistant economy and the self-sufficiency guidelines of Ayatollah Khamenei and opposed joining the FATF, considering it a barrier to circumventing sanctions. Ahmad Midari worked in the field of development economics and policy-making and had a more open view towards the FATF, international trade, and foreign investment. In the first hundred days of their ministries, the two ministers of Cooperatives, Labor, and Social Welfare adopted different approaches. Hajjatollah Abdolmaleki launched initiatives like a support system for home businesses and financial facilities for domestic jobs to support self-sufficiency and the resistant economy envisioned by the leader, but due to financial constraints, he was unsuccessful in implementing his programs. Ahmad Midari, with a more open approach, focused on developing the labor market through cooperation with neighboring countries and creating job opportunities through joint investments, which did not yield any achievements. He also created a "transparency information system to support vulnerable groups and reduce social inequalities" with the help of digital platforms. The Economic Team of the President of the Islamic Republic also includes the Organization of Planning and Budget, which is not a ministry but is responsible for planning, budget formulation, managing development, and evaluating government agencies in implementing projects. Ibrahim Raisi appointed Masoud Mir-Kazemi, born in 1960, and Masoud Pezeshkian appointed Mohammad Baqer Nobakht, born in 1939, to head the Organization of Planning and Budget. Mir-Kazemi holds a degree in industrial management from Tarbiat Modares University, while Mohammad Baqer Nobakht has a PhD in economics from the University of Paisley, Scotland. Before heading the Organization of Planning and Budget, Masoud Mir-Kazemi was a principlist, a member of the Islamic Consultative Assembly, CEO of Etka (owned by the armed forces), and Minister of Commerce and Minister of Oil in Mahmoud Ahmadinejad's government, while Mohammad Baqer Nobakht was the Vice President and head of the Organization of Planning and Budget in Hassan Rouhani's governments. Mir-Kazemi, like his colleagues, supports a resistant economy and reducing dependence on foreign resources, and in the first hundred days of his presidency at the Organization of Planning and Budget, he imposed new taxes to increase government revenue. Nobakht had a more open approach to foreign investment and international interaction and, as the primary person responsible for budget formulation, proposed plans to eliminate unnecessary expenses, adjust and target energy subsidies, improve productivity in construction projects, and strengthen the oversight system to alleviate pressure on the public budget. Both ministers sought to reduce budget costs with different policies. Mir-Kazemi launched oversight systems while Nobakht reformed the budget structure. Analyzing the economic record of the first hundred days of Masoud Pezeshkian's government without statistical examination, although finding hundred-day statistics is not easy, especially comparing it with the record of the previous government of Ibrahim Raisi, is incomplete. The table below shows a statistical comparison of the hundred-day record of the government in terms of inflation, unemployment, misery, and the price of the dollar. Both governments have achieved results in reducing inflation, unemployment, and misery rates, but Pezeshkian's government reduced inflation and misery rates more rapidly. In contrast, the dollar rate increased more during both periods and in Pezeshkian's period. It seems that improvements in economic statistics in the Islamic Republic do not prevent the increase in the price of the dollar or, in other words, the depreciation of the rial. In conclusion, Ibrahim Raisi pursued resistance against globalization in the first hundred days of his presidency, which aligned with the leader's views, and for this purpose, he dismissed many officials and replaced them with supporters of state economy and opponents of joining the FATF. Masoud Pezeshkian, in the first hundred days, was fearful of war with Israel and awaited the results of the elections in America, and for this reason, he did no more than timely present the budget bill. Members of his economic team were older than their counterparts in Raisi's government and sought trade with the world and the reopening of the economy, but Pezeshkian retained the managers who supported the resistant economy of Raisi's era. He has repeatedly stated that his government's policy follows the guidelines of the Supreme Leader of the Islamic Republic. The economic record of the first hundred days of Masoud Pezeshkian's government has a similar outlook to that of Hassan Rouhani's government, which is that even reforms within the government of the Islamic Republic cannot be implemented. Therefore, it is believed that until the end of Pezeshkian's government, production will remain in recession, inflation will increase, the banking network will become more indebted, poverty will spread, pension funds will become poorer, and the dollar will become more expensive; especially since with Donald Trump's election as President of the United States, the likelihood of lifting sanctions is much lower than before.