Iran's Economy Minister On The Ropes As Sanctions Tie His Hands

Economy Minister Ehsan Khandouzi might be the first member of the Raisi cabinet to be jettisoned in what may be an early reshuffling of Iran’s new government.

Reformist daily newspaper Sharq on Wednesday, November 24, quoted administration insiders as having said that Khandouzi is likely to be the first cabinet minister to be dismissed by Raisi. Individuals from inside the cabinet office say Raisi last week warned Khandouzi about the situation in Iran's stock exchange.

They said the president is likely to dismiss two of his cabinet ministers, but they did not name the second minister. Raisi had Twice warned Khandouzi on October 31 and November8 about problems in the operations of the Tehran Stock Exchange. On Wednesday, the moderate conservative news website also opined that "Khandouzi is no longer standing on solid ground."

Hardliners who now control both the executive and the legislature, promised people to act effectively and solve the long-running economic crisis that in reality was triggered by US sanctions. Now, they are quick to blame a single minister for the worsening situation while the sanctions remain in place, denying the government most of its foreign currency income.

The previous government encouraged people to invest in the stock market where government assets were offered at inflated prices. After a huge bullish run in 2020, the market dropped more than 30 percent, leaving many small investors without their savings.

It appears that it is not only Raisi who is unhappy about Khandouz's performance. The Iranian parliament (Majles) has at least twice warned Khamndouzi about the shortcomings in his performance and has in one case summoned him to Majles to explain the chaotic situation of Iran's capital market. Lawmaker Hossein Ali Haji Deligani, however, said that instead of explaining his policies or trying to solve problems, he started to lecture the lawmakers about macroeconomics.

Subsequently, the parliament warned Khandouzi that he does not have much time to solve problems. However, members of the parliament have said that they do not wish to impeach Khandouzi although they insisted that it is essential that he changes his policies. Khandouzi then published a two-page roadmap for Iran's economy in the next two years but critics reminded him that his roadmap is nothing new and that he had offered the same to the Majles in August.

Also during the past week, Khandouzi wrote an open letter to Raisi in which he complained about an unfavorable situation that prevented the implementation of his plans. In the letter, Khandouzi mentioned 15 reasons why Raisi's order about selling government assets to make up for the country's huge budget deficit was impractical. However, he did not mention that it was Khandouzi himself who had suggested the sale of assets in the first place. A leading economic website, Tejarat News, later described Khandouzi's plan as "a failed project."

On Wednesday, Raisi, who was apparently annoyed by "making the internal affairs of the cabinet public,"criticized Khandouzi for doing so.

Khadouzi, appears to be in serious trouble. Until a few months ago, he was an academic criticizing the Rouhani administration's policies and claimed to have the cure for all the country's ailments. He found his way to the parliament in February 2020. His ambitions led him to abandon the position he had won and join the Raisi administration as Economy Minister, although like most Iranians he knew that this was the most difficult job in the country.

Now, in his early 40s, he is out of his university lectern where his former colleagues spurn his economic policies, and out of the Majles, where his friends have turned into staunch foes, and he is likely to be out of the administration where he hoped his ambitious plans would take him even higher in the Islamic Republic's top political echelon.