Former VP Says Iran's Foreign Policy Perpetuates Economic Crisis

A former vice president, Mostafa Hashemi Taba, says the Islamic Republic's problematic foreign policy stands n the way of solving Iran's economic problems.

This foreign policy, he said, can in no way lead to any mitigation of economic hardships Iranians face, adding that the current policy of boosting cash subsidies can only temporarily silence anger and dissent.

Hashemi Taba further blamed the mixture of government control on the market and “revolutionary” policies for a major part of Iran's economic crisis.

President Ebrahim Raisi’s government decided to eliminate import subsidies for key imports of food and medicine that cost the government up to $20 billion annually, according to latest official estimates. As the subsidy was removed prices immediately jumped. To help the people cope, Raisi has promised to pay around $10 billion directly to the people as cash assistance.

The Iranian government has nicknamed its price rise policy as "setting the prices free," and started reducing subsidies for sensitive goods such as bread and flour. However, as parliament Speaker Mohammad Bagher Ghalibaf said recently, the price increases is will cover a wide range of household needs such as meat and cheese as well as other consumer goods and services.

In a televised interview Monday night, President Ebrahim Raisi deliberately did not talk about continuing to raise prices.

Hashemi Taba whose long career included many executive posts including industry minister and vice president (1994-2001), warned in his interview with Khabar Online on Tuesday, that the continuation of the government’s policy will bring about higher inflation. He suggested that the country needs to sort out its relations with others, but Iran is following “revolutionary policies” that are not consistent with the rest of the world, Hashemi Taba said.

He added that pressures are being exerted on Iran because of its “revolutionary approaches.” On the other hand, "setting prices free" should follow a certain economic order which is non-existent. Hashemi Taba further suggested that the Islamic Republic should define its relations with the world and decide how it is going to survive before making decisions about raising prices.

He went on to say that liberalizing prices could be a good idea but not under the current economic regime. "You cannot control prices and at the same time set them free," he said.

Hashemi Taba warned that "Iran has long-standing economic problems that cannot be solved with temporary solutions…and our policies are inconsistent with our foreign policy.

He added that increasing cash handouts will inevitably lead to further inflation. The rate of exchange for the US dollar will increase within a day or two. [In fact, the dollar climbed by 5,000 rials in the morning after Raisi promised to boost cash handouts.] He also warned that a 5 percent shortage of goods in the market will lead to a 50 percent rise in prices.

Meanwhile, several Iranian politicians and lawmakers on Tuesday criticized the government for the way it has increased the prices. Former lawmaker Mansoor Haghighatpoor was one of those critics. He told Nameh News website that the government's performance has made life harder for Iranians even compared to the time when Iran was at war with Iraq in the 1980s. Haghighatpoor made it clear that "The decision was right, but the government implemented it in the worst possible way, making it hard for ordinary Iranians to obtain bread for their daily consumption."