Iran's Labor Minister Resigns Amid Worsening Economy, Social Crisis

After months of reports about an inevitable cabinet reshuffle in Iran, finally the minister of labor resigned Tuesday amid worsening economic and social crises.

Since his appointment last year, dozens of politicians, loyal lawmakers and media pundits had said that Hojatollah Abdolmaleki did not have the credentials or the experience to be minister of labor.

For critics of President Ebrahim Raisi, Abdolmaleki became a symbol of forming an inefficient government, with third-rate candidates who had factional ties and hardliner credentials.

In April, even his own ministry staff walked out in an unprecedented protest to demand his removal.

Many had expected his resignation or impeachment by parliament months ago, but finally the worsening crisis brought the agony to an end.

Since early May, there has hardly been a day without some kind of protest in Iran. The government’s move to cut import subsidies for food triggered the unrest, but what people have been shouting in the streets is that they do not want the clerical regime, that they see as corrupt and inefficient.

After food subsidies were stopped and prices for basic items such as bread soared, the situation became worse with the national currency losing value and adding fuel to the inflationary cycle. By June 12, the rial sank to a historic low of 333,000 to one US dollar, an almost 5,000-fold decline since the establishment of the Islamic Republic in 1979, when 70 rials could buy a greenback.

On the same day, retail merchants in Tehran and several other cities began shutting their doors and gathering in bazaars to protest soaring prices. A sense of economic disintegration began to solidify after one year of unrelenting bad news.

The Iranian economy began deteriorating in 2018 when former US president Donald Trump withdrew from the Obama-era nuclear agreement known as JCPOA and imposed tough sanctions, but there was always some hope that Tehran and Washington could patch things up.

The election of President Joe Biden strengthened that hope and since indirect talks began with the United States in April 2021, hope became an expectation. But after a year of intense talks in Vienna the process stopped in March, signaling no quick end to economic misery.

That is when the rial began sinking to its historic low and the government appeared incapable of turning things around without a deal with Washington to end sanctions.

Regime insiders in Iran might hope that Abdolmaleki’s replacement, Mohammad Hadi Zahedi Vafa, an Ontario University economics graduate, or the resignation of more ministers can help the economy. However, the mood of many people posting on social media from Iran is desperate.

The overall situation appears to be worse than a simple government reshuffle could address. There are simply too many challenges for officials to be able to make meaningful progress.

A female Twitter user from Iran said after the resignation, “The same way Abdolmaleki resigned, God willing [president] Raisi will realize before it is too late, that without the revival of JCPOA he cannot control inflation, defend the value of the currency…reality is different from slogans.”