Iranian politicians, economists see US talks as key to economic rescue

A senior adviser to Iran’s Supreme Leader urges the government to cede more economic control to the people, arguing that this is necessary to address sanctions, soaring inflation, and a rapidly depreciating currency.

By some estimates, 80% of Iran’s economy is controlled directly and indirectly by the state or affiliated religious foundations operating under Ali Khamenei’s orders.

Ali Larijani, a senior adviser to Khamenei, told the Eco Iran website that “what Iran’s economy needs is security, and that does not mean control by security institutions,” a clear jab at the influence of the IRGC and other forces.

Criticizing the involvement of security organizations in the economy, Larijani, a former parliamentary speaker, said Iran’s economy should be controlled by the people rather than the government. He also called for administrative reforms, global engagement, and resolving Iran’s nuclear issue through dialogue.

Larijani emphasized that "the government controls some 85 percent of Iran's industries and mines," but argued that it lacks the efficiency to manage these sectors effectively.

He also stressed the need for the government to ensure security for the private sector by passing relevant laws and persuading the Supreme Leader to support the move.

Speaking on Iran's foreign policy and negotiations with the United States, Larijani stated, "If the Americans had acted wisely, they could have changed the course of Washington's relationship with Tehran." He argued that US sanctions have hindered Iran’s economic development, emphasizing that economic prosperity is unattainable under such restrictions.

Washington imposed oil export and international banking sanctions on Iran after President Donald Trump withdrew from the JCPOA nuclear deal in 2018. Iran’s already struggling economy, burdened by inefficiencies, immediately sank into a prolonged recession, while its currency depreciated 25-fold.

Regarding the future of nuclear negotiations, Larijani stated, "Everything depends on US behavior. There is a gap between what the United States declares and what it actually does." He also emphasized that Iran should pursue its national interests in both the East and the West.

Meanwhile, in an interview with a Tehran-based website, Iranian economist Ali Ghanbari, addressing the current financial crisis, noted that some Iranian politicians appear to overlook the fundamental principle that every country must prioritize its own national interests.

Ghanbari stated, "Realistically speaking, it is unlikely that the country's economic situation—regarding inflation, poverty, and unemployment—will improve significantly compared to last year, as Iran's economy remains constrained by structural issues in foreign policy that are beyond the government's control."

The economist added, "We cannot expect any improvement in the country's economic situation as long as sanctions pressure continues." He noted that this is in addition to the broader issue of insufficient domestic and foreign investment in Iran.

Ghanbari stressed that the defining characteristic of Iran's economic policy is "confusion," a problem that has become even more evident following the impeachment and dismissal of the former Minister of Economy.

As a way forward, Ghanbari suggested that Iran should abandon the idea of indirect talks and engage in direct negotiations with the United States, arguing that intermediaries only complicate the process.

He also urged the government to prioritize its employees to safeguard its social capital. At the same time, he emphasized that if Iran is serious about easing tensions and sanctions in the coming year, it must carefully select its strategic partners, a veiled reference to Tehran’s preference for close ties with China and Russia.

While both Larijani and Ghanbari emphasized the need to address foreign policy challenges to resolve Iran’s economic woes, analyst Hamid Aboutalebi suggested that a new path for dialogue with the United States may have emerged. Writing on the conservative Nameh News website in Tehran, he pointed to recent conciliatory remarks by Trump’s Middle East adviser, Steve Witkoff, as a potential opening.

Aboutalebi further argued that the Iranian government should move away from propaganda campaigns against Washington and pursue direct negotiations to de-escalate tensions.