In examining the economic trajectory of Iran under the leadership of Masoud Pezeshkian and comparing it with the policies of his predecessor, Ebrahim Raisi, this article analyzes the first hundred days of Pezeshkian’s administration. By focusing on key ministries—Economic Affairs and Finance, Petroleum, Industry, Mines, and Trade, and Cooperatives, Labour, and Social Welfare—we can begin to understand the economic direction Pezeshkian might pursue and assess its potential impacts on Iran’s long-term economy.
Ministry of Economic Affairs and Finance: Contrasting Visions
The Ministry of Economic Affairs and Finance is tasked with overseeing Iran’s macroeconomic policies, managing the national budget, and supervising banking, tax, and capital markets. Under Ebrahim Raisi’s government, this ministry was led by 42-year-old Ehsan Khandouzi, whose career includes positions within institutions closely aligned with the Supreme Leader’s office, such as the Economic Commission of the Parliament. Khandouzi’s approach adhered to Khamenei’s “resistance economy” philosophy, focusing on self-sufficiency and limited international economic engagement. Within his first hundred days, Khandouzi permitted private sector activity but kept it restricted under the resistance economy framework, refrained from supporting Iran’s entry into the Financial Action Task Force (FATF), and relied on selling surplus government assets to cover budgetary needs.
In contrast, Pezeshkian’s administration appointed Abdolnaser Hemmati, a seasoned economic figure who previously led Iran’s Central Insurance and served on the Economic Committee of the Supreme National Security Council. Hemmati advocates for a more open economy, advocating for private sector growth and international cooperation, including joining FATF. However, in his initial hundred days, Hemmati made no substantial moves toward a free-market economy or FATF membership, as he had similarly refrained from doing during his time as Central Bank governor. Thus, despite his progressive views, there has been minimal tangible difference between his and Khandouzi’s record on combatting economic opacity, rent-seeking, and promoting a transparent market economy.
Ministry of Petroleum: Ambitious Goals but Limited Achievements
The Ministry of Petroleum, which controls Iran’s energy sector, holds substantial influence over national revenue. Javad Oji, appointed by Raisi, aimed to increase oil production and exports by engaging in joint projects, particularly with regional neighbors. Benefiting from a period of eased sanctions by the U.S., Oji succeeded in raising exports, albeit through sales primarily directed toward China at discounted prices.
Mohsen Paknejad, chosen by Pezeshkian, emphasized transparency and attracting foreign investment to bolster Iran’s petroleum sector. His aspirations included financial reform in contract management and increased support for renewable energy, but he encountered hurdles in executing these goals due to limited resources and institutional resistance. Like his predecessor, Paknejad has continued the practice of selling oil at a discount to secure revenue in the face of limited options.
Ministry of Industry, Mines, and Trade: Domestic Production vs. International Integration
Iran’s Ministry of Industry, Mines, and Trade oversees domestic production and trade, with the mandate to enhance competitiveness and support businesses of various scales. Under Raisi’s administration, Seyyed Reza Fatemi Amin led this ministry, strongly advocating for domestic production and import restrictions to support Iranian industries. His hundred-day record included imposing tariffs on imports with local substitutes, cracking down on goods smuggling, and securing Central Bank backing for small and medium-sized enterprises. Fatemi Amin also promised to expand steel production capacity to 40 million tons by 2026.
Pezeshkian’s minister, Mohammad Atabak, has a contrasting vision—emphasizing foreign investment and cross-border collaboration to modernize the mining sector and support trade. In his first hundred days, Atabak signed agreements worth approximately $500 million in mining projects, focusing on steel, aluminum, and copper, with international companies. He also reduced tariffs on non-ferrous metal exports and equipment imports to support technological upgrades, targeting trade with Iraq, Turkey, and Qatar. While his plans are ambitious, they largely remain in the negotiation phase, awaiting the easing of Iran’s international isolation to attract the necessary investments.
Ministry of Cooperatives, Labour, and Social Welfare: Divergent Approaches to Employment and Social Welfare
The Ministry of Cooperatives, Labour, and Social Welfare is tasked with supporting Iran’s workforce and vulnerable populations. Hojatollah Abdolmaleki, Raisi’s minister, embraced the resistance economy approach, aiming to strengthen local businesses and home-based enterprises. However, his plans faced budget constraints, and many were left unimplemented.
Pezeshkian’s minister, Ahmad Meydari, brings a development-focused perspective, emphasizing job creation through joint ventures with neighboring countries and international cooperation. Although he has articulated these goals, tangible outcomes have yet to be realized, and none of the proposed job programs have taken root in the short timeframe of his tenure.
Economic Indicators and Public Sentiment: The Early Days of Pezeshkian’s Administration
After the first hundred days, public opinion on Pezeshkian’s government remains skeptical. Despite high expectations, substantial economic issues persist. The government has yet to unveil a clear economic plan, and official announcements remain vague, offering few insights into potential policies on currency stabilization, inflation control, or free market regulation. Speculation abounds over a possible move toward a single exchange rate, but no formal policy has emerged. Experts argue that sanctions, internal disagreements, and a lack of expertise within the administration hinder the capacity for substantial economic reform.
The government’s early actions have included adjustments to the Nima exchange rate (the official rate for certain imports), intended to reduce its gap with the market rate. However, the disparity has persisted, with the market rate continuing to rise. Meanwhile, Pezeshkian’s budget proposal awaits parliamentary approval, leaving the public uncertain about upcoming economic shifts.
Conclusion: A Limited Outlook for Economic Reform
Both the administrations of Ebrahim Raisi and Masoud Pezeshkian have shown an apparent divergence in their economic ideologies. However, their actions in the first hundred days reveal limited progress toward economic reform. The ideological emphasis on resistance economy under Raisi’s ministers stands in contrast to Pezeshkian’s theoretically more open policies. However, significant constraints—such as sanctions, limited foreign investment, and internal economic challenges—seem to restrict both administrations’ capacities to implement impactful economic change.
Pezeshkian’s government faces the difficult task of building public trust while navigating complex economic realities, leaving the question open as to whether this new administration can deliver the much-needed reforms or will ultimately fall short in addressing Iran’s enduring economic issues.
