Economist points to lack of coordination in Iran’s government team

An economist in Tehran says members of President Masoud Pezeshkian's economic team are not on the same page, as the government must deal with a massive economic crisis gripping the country since 2019.

Hamid Haji-Esmaili told the press this week, that although nearly all the economists chosen by the President have joined his team, they lack coordination.

However, the lack of coordination among the ministers of the 'national accord' government is just one of its challenges. Last week, parliamentarians criticized Pezeshkian and his cabinet for not presenting practical plans to manage the state's affairs. In response, Pezeshkian, with a noticeable tone of boredom and impatience, retorted, "Just give us the vote of confidence and let us get on with our work!"

Haji-Esmaili did not elaborate on why he believes the government suffers from a lack of coordination, but it seems he was alluding to potential differences in opinion and approach among Pezeshkian’s key economic officials. For some, controlling inflation is the top priority, while others may believe that increasing subsidies is essential to support the country's large, impoverished segment of the population.

The most prominent economist in Pezeshkian's team is Vice President Ali Tayyebnia, who is known as an inflation fighter. He is joined by Economy Minister Abdolnaser Hemmati, Labor Minister Ahmad Maydari, and Central Bank Governor Alireza Farzin. Additionally, former Central Bank Governor Abdoh Tabrizi is expected to join the team.

According to Haji-Esmaili, the government's ongoing appointments of deputy ministers and other senior officials are further complicating coordination, as the addition of new members is making it even harder to achieve cohesion.

He went on to say that the government's economic team could positively impact society and the economy if they can demonstrate a genuine effort to fulfill Pezeshkian's promise of addressing the current crisis, with one key step being the stabilization of market prices.

Since the United States pulled of the JCPOA nuclear deal in 2018 and imposed sanctions, Iran’s economy has faced many serious challenges, with its currency falling 15-fold, public services sharply declining and inflation topping 40% for the past five years.

Haji-Esmaili emphasized that the government must show it is listening to the people, who should, in turn, feel that their demands are being met. He added that while the government may struggle to implement a specific plan, its primary focus should be on stabilizing the market over the next six months.

Haji Esmaili emphasized the critical need to address issues in Iran’s foreign relations. He stated that it is crucial for Pezeshkian and his foreign minister to demonstrate to the world that they are adopting a different approach to international relations than previous governments and that they are open to dialogue.

National Development Fund Chief Mehdi Ghazanfari, who recently suggested that Iran should establish consular relations with the United States, shared that he met with Pezeshkian and is convinced that the new president is determined to prioritize the country's development and improve governance in Iran.

However, he stopped short of saying that Pezeshkian agreed with his idea about the US Consulate and whether he would seek Khamenei's approval for that.

Labor Minister Maydari in an interview before taking office, warned that any missteps in the effort to improve economic conditions could have serious consequences for Iran. He emphasized that the transition to a new economic state must be carefully calculated. To illustrate his point, he referenced the privatization in Mexico, which ultimately led to the transfer of state assets into the hands of local mafias.

Maydari suggested that the new government should be transparent and remove obstacles to creating a competitive economy. He warned that attempting to improve the economy without transparency could lead to financial corruption. He added that the government must clarify its regulations and resolve conflicts between various regulations.