January 17, 2025
by Warren L. Nelson President Pezeshkian has been in office almost six months now but has very little to show for that time. Of course, the same could be said of all his predecessors.
More importantly, he has more to show for his first six months than any of his predecessors. He hasn’t completed any of his campaign promsies. But he has gotten fascinating starts on many of them:
• He has stopped enforcement of the draconian dress code but doesn’t yet have anything to replace it;
• He has called for a national referendum on ending costly subsidies for natural gas, water, electricty and so on but will the public back him?;
• He has gotten the ban on one social media platform lifted though it’s the third most popular in Iran;
• He has broken his campaign pledge not to raise gasoline prices, and now says they must be raised. The combined power of regime hardliners, the Pasdaran and Supreme Leader Ali Khamenehi has limited what he has been able to do but Khamenehi seems to be listening to him and has allowd him to do some things. (See stories on Page 12 detailing the changes.) In many ways, it is a lot.
It’s more than any predecessor has achieved. But it is not enough to win him accolades from citizens disgusted with the regime, while it is enough to promote even more hatred for him from hardliners. On the economy, nothing of substance has happened.
Some say the economy is so contorted that no tweaks will amount to anything. But there haven’t even been tweaks. Pezeshkian is seeking a national referendum to authorize him to cut the subsidies that hold down the prices of gasoline, water, electricity and other items. But it remains to be seen if he will be allowed to do that.
The one economic initiative worthy of note is that Pezeshkian has convinced Supreme Leader Ali Khamenehi to tell the Expediency Council to look into the demands of the Paris-based Financial Action Task Force. FATF has blacklisted Iran, and no respectable foreign bank will deal with Iran as a result. Critics oppose the FATF demands because they would stop Iran from financing Hamas and Hezbollah.
Pezeshkian has loudly and repeatedly advocated complete compliance with all FATF standards. The bottom line which you will never see any publication inside Iran acknowledge is that Iran must win the lifting of BOTH the American sanctions and the FATF blacklisting if it is ever to be able to rejoin the global economy.
Pezeshkian certainly understands the economic challenge. In his first news conference as president, he told the Iranian public, “We are headed toward a collapse” if the economy is not drastically reformed. But there are many power centers within the regime most prominently the Pasdaran that have a vested interest in how things are run now.
They are not interested in reforms that are needed along with ending US sanctions and the FATF blacklisting. A stark warning came in December from former President Mohammad Khatami who said the regime may well collapse or be toppled if the ailing economy is not fixed. Hejab enforcement and internet restrictions are the key social issues arousing the public against the regime.
The ailing economy ails even more with each passing day, but much of what goes on there is too technical for public commentary. The two economic elements that are clear and concrete and do draw attention are: a) the constant decline in the value of the rial and consequent raging inflation and b) the astounding scale of government subsidies spent to hold down the cost of fuel, heating, electricity and water.
Pezeshkian, unlike all his predecessors except Ali-Akbar Hashemi-Rafsanjani, president in the 1990s, talks constantly about the need to reduce the subsidies, which are the highest in the world and which drain the government of resources, prompting huge deficits, which in turn feed inflation and add to the shrinkage of the rial.
He keeps alerting society to the immensity of the subsidy problem but society doesn’t even nod in acknowledgment. He has appealed to the public to wear sweaters and raise their thermostats this winter by two degrees centigrade to reduce natural gas consumption. The weekly announcements of how much natural gas is consumed indicate very few people have turned up their thermostats.
Natural gas is sold for less than it costs and the public treats it as if it is worthy of being wasted. An exasperated Pezeshkian said of the natural gas crisis, “We are facing challenges today. Whenever we try to make changes, people oppose it. Where should we begin?” (Pezeshkian was not helped when the new leader of the Lebanese Hezbollah thanked Iran profusely for funding a $77 million aid package to support a quarter million Shiite families in Lebanon.
The Iranian public is incensed at its funds being used to help poor Arabs more than poor Iranians.) The Pasdaran and hardliners are widely seen as the main opposition to change. And that is probably true. But the daily Sazandegi recently said that heavy opposition to lifting internet and social media restrictions comes from those illegal businesses that sell the public the technological gear needed to evade the regime’s restrictions.
The one area where Pezeshkian has made clear progress on change is in appointments where he has full control. For example, he has appointed two women as governors-general in Iran’s 31 provinces for the first time. Also for the very first time, he has named a Kurd as governor-general of Kurdistan province and she’s one of the female governors general. And he has named the first Baluchi Sunni as governor general of heavily Sunni Sistan va Baluchestan province.
Under hardliner pressure, he only named one woman to the cabinet. But he then named a woman, 54-year-old Fatemeh Mohajerani, a graduate of a college in Scotland, as the government spokesperson, a position that means she is seen on state television daily.
Pezeshkian has emphasized running an inclusive government. But he didn’t make many Reformers happy when he named a number of rightwingers to his cabinet to demonstrate inclusivity at the highest level.
Only three of the 19 ministers are clearly Reformists. On financial matters, Pezeshkian was able to convince Khamenehi to allow the government to take 80 percent of all oil revenues. Previously, it was limited to 60 percent, with the remainder paid into the government’s rainy-day fund. It has been hard to get Khamenehi to understand that it is now raining every day on the Islamic Republic’s finances.