The Bourse & Bazaar Foundation, a think tank focused on economic diplomacy and development in the Middle East and Central Asia, prepared this report in collaboration with "The Iran Primer."
President Ebrahim Raisi has prioritized improving Iran’s faltering economy. He took office in August amid a fifth wave of COVID-19 cases, recurring blackouts, and a currency depreciation. The economy subsequently contracted after five months of growth. Iran also remains under U.S. sanctions. To address these economic challenges, Raisi will need to surround himself with competent managers.
Raisi’s predecessor, Hassan Rouhani, staffed his economic team with several experienced technocrats who were largely apolitical. His veteran oil minister, Bijan Zanganeh, and central bank governor, Abdolnasser Hemmati, were instrumental in mitigating some of the economic damage inflicted by U.S. sanctions.
Raisi’s economic team, however, is mostly drawn from conservative networks, including those tied to the Islamic Revolutionary Guard Corps (IRGC). Many members of Raisi’s team were vocal critics of the Rouhani administration. Some of his appointees are relatively unknown even in Iran. Nevertheless, all of Raisi’s picks to lead ministries responsible for the economy were approved by Parliament, the Majles, which is dominated by conservatives.
Aside from his cabinet, Raisi’s economic policy will be influenced in part by his appointed advisors. These include Mohammad Mokhber, an economist and former manager of SETAD, a business conglomerate under the control of Supreme Leader Ayatollah Ali Khamenei. Mokhber was appointed as first vice president. Masoud Mirkazemi, who was a trade minister and later oil minister under hardline President Mahmoud Ahmadinejad (2005-2013), was tapped to lead the Planning and Budget Office. A former IRGC commander, Mohsen Rezaei, who ran against Raisi in the 2021 presidential election, was appointed as vice president for economic affairs.
Raisi’s new cabinet is largely composed of men he has deemed “expert, efficient and revolutionary.” The emphasis on “revolutionary” reflects a politicization of economic policymaking that emerged during Hassan Rouhani’s presidency (2013-2021). As Iran faced multilateral and unilateral sanctions, advocates for diplomacy and the 2015 nuclear deal sought the lifting of sanctions to boost economic prospects.
But many hardliners, including Supreme Leader Ayatollah Ali Khamenei, prefer to look inward to solve Iran’s economic problems. They promote the “resistance economy” model in which Iran would seek to neutralize the impact of sanctions. These lawmakers and officials favor reducing dependence on imports by raising domestic production and replacing foreign technologies with those made at home. Should imports be necessary, they support increased trade with Russia and China as opposed to Western countries, which they consider unreliable.
With Raisi in office, the proponents of the resistance economy are in control of both the legislative and executive branches. The question is to what extent they can implement the resistance economy model given its inherent limitations. As a pragmatic move, Raisi’s team may also push for the lifting of U.S. sanctions and reintegration into the global economy, which were priorities of the Rouhani administration. The following are profiles of Raisi’s cabinet ministers responsible for managing the economy.
Ehsan Khandoozi was confirmed as Minister of Economic Affairs and Finance. Born in 1980 in the northern city of Gorgan, Khandoozi holds a bachelor’s degree in Islamic knowledge and economics from Imam Sadeq University. He also has a master’s degree and a doctorate in economics from Science and Research Branch of the Islamic Azad University. Khandoozi is an assistant professor of economics at Allameh Tabatabai University as well as the director of the Islamic Economics Group in the same university.
Khandoozi has served as:
- secretary of the Economic Council of the Islamic Republic of Iran’s Broadcasting (IRIB)
- director of the Center for Economic Research Parliament (2013-2018)
- a member of the research council to the Tax Affairs organization
- a member of the Ministry of Economic Affairs and Finance’s think tank
- economic adviser to the Secretariat of the Expediency Council
- a member of the Board for Deregulation and Facilitation of Business Licenses
In 2020, Khandoozi was elected to Parliament representing Tehran. He became the vice chairman of the Economic Committee and a member of the Transparency and Justice watch board of the Majles. As a lawmaker, Khandoozi was a vocal critic of Rouhani. He focused on tax policy, including capital gains and what to do about empty houses; reorganizing the central bank, amending the audit organization law; reforming the budget structure, and dealing with audit organizations and business licensing arrangements. He also sought amendments to the laws regarding industrial free trade zones and led a caucus focused on business and economic issues in Parliament. The following are remarks from Khandoozi on key issues:
On U.S. sanctions:
- “My proposal is that the 11th Parliament establish an expert committee with representatives from relevant commissions instead of taking ‘rushed, ad-hoc and symbolic’ actions… [Responding to] the [U.S.] sanctions room, requires an anti-sanctions room.” (June 2020)
On the 2015 nuclear deal:
- “Experience has shown that if sanctions are lifted completely, the U.S. Treasury Department will be able to prevent us from profiting from our foreign exchange and other economic transactions by intimidating and indirectly threatening Iran's trading partners. Accordingly, and given this concern, which has been proven many times, it should be possible to verify the lifting of sanctions in the coming weeks and months by determining measurable indicators.” (August 2021)
On the Raisi administration’s economic priorities:
- “It is suggested that the government’s economic headquarters control inflationary expectations in the short run and focus on controlling the exchange rate. The priority is with macroeconomic stability and preventing the decrease of public purchasing power.” (August 2021)
- “The most important priority of the ministry of economic affairs and finance is helping create macroeconomic stability and sustainable control of inflation.… Record high inflation and decrease in per-capita income has created a large gap between households’ income expenditure, made it harder for people to afford to eat, and jeopardized the livelihoods of different population groups.” (August 2021)
On controlling inflation:
- “From day one I will do my best for financing the fiscal deficit through non-inflationary methods, controlling the record-high liquidity growth, managing the foreign exchange market and [saying it twice to emphasize the point] managing the foreign exchange market.” (August 2021)
On financing the fiscal deficit:
- “One urgent action in the field of public finance is transiting from this year’s fiscal deficit with minimum macroeconomic cost. Given the economic costs of borrowing money from the Central Bank, the most important actions to be taken are: 1) demand creation for government bonds, which is easily doable and its instructions will be communicated soon; 2) facilitation of selling of government’s assets,…; 3) enhancing the role of the treasury in overseeing monetary operations of the Central Bank; 4) development of the debt markets; 5) diversification of Islamic financial bonds and increasing their liquidity; 6) compilation of bond issuing timetable plan, and lastly, a public debt management bill.” (August 2021)
On the tax system:
- “Unfortunately, our tax system is known by three characteristics: a low level of tax revenue (in comparison to) GDP, high tax evasion, and the main burden of tax being on the transparent and law-abiding groups and producers.” (August 2021)
On Financial Action Task Force (FATF) reforms:
- “As long as there are sanctions, reviewing and approving the FATF (reforms) will not cure the pain. Meeting the demands of the FATF makes our economic life even more difficult under sanctions. In my opinion, during these extraordinary times, the passage of these two remaining bills and the full implementation of the requirements of the FATF is not a defensible decision… The FATF is a very minor issue in our economy today. It is a false premise to think otherwise as some people are constantly talking about the FATF.” (March 2021)
Javad Oji was confirmed as Minister of Petroleum. Born in 1966 in Shiraz, some 500 miles south of Tehran, Oji has a bachelor’s degree in petroleum engineering from Petroleum University of Technology. He has been employed by the petroleum ministry since 1969 and worked as the Deputy Minister of Petroleum and CEO of the National Iranian Gas Company during President Mahmoud Ahmadinejad’s second term (2009-2013).
In replacing the wily technocrat Bijan Zanganeh, Oji brings to the job good relationships with members of the Majles. During the Ahmadinejad administration, Oji signed the second contract covering gas imports from Turkmenistan to the Sarakhs region in 2009. He also established a mechanism with Iran’s northeastern neighbor to exchange goods as payment for the imported gas to circumvent sanctions.
Gas export contracts with Pakistan and Iraq followed in 2010 and 2013 respectively. Oji was also responsible for implementing a targeted subsidy program to support gas transmission for the National Iranian Gas Company in December 2010.
During his long career, Oji has served as:
- chairman of Iran Gas Development Engineering Company
- chairman of the Board of Supervisors of Production and Gas Refineries
- chairman of the Board of Directors of Petrochemical Industries Investment Holding
- a member of the Board of Trustees of the University of Petroleum Industry
In 2020, Oji was sanctioned by the U.S. Treasury for serving as managing director of Sina Energy Development Company (SEDCO). SEDCO was sanctioned for being owned or controlled by Bonyad Mostazafan, a powerful foundation allegedly controlled by Supreme Leader Khamenei. The following are remarks from Khandoozi on key issues:
On the Raisi administration’s plans for oil and gas:
- He promised to increase oil sales and stated: “Considering the political developments with China, the numbers [exports] will be much higher than the current situation.” (August 2021)
- “We should not always seek to sell crude oil … We must pursue the discussion of complementary petrochemical chain development, which will lead to both employment and income generation, and requires very low investment.” (August 2021)
On natural gas production and diplomacy:
- “In the field of gas supply and consumption, operational solutions can overcome the challenge of negative gas balance…. Some solutions in the gas supply sector are short-term and some are long-term. First, we must make maximum use of the unused capacity of the country's gas refineries. In the fields that supply these refineries, due to the pressure drop that has occurred for them, we can compensate for the drop in production by drilling wells and maintaining production as well as by installing pressure boosting stations and unused capacity. We can bring gas refineries back into the orbit.” (June 2021)
- “Another solution for the gas supply issue is pursuing diplomatic efforts. We can increase the country's share in the gas trade by effectively communicating with neighboring countries, which are the world's gas leaders. It is not only the matter of gas exports, but also about gas imports, swaps, and transit. If our neighbors transit their gas through Iran, it will bring income to the country, and we can activate new capacities in the country's gas supply sector.” (June 2021)
Seyyed Reza Fatemi Amin
Seyyed Reza Fatemi Amin was confirmed as Minister of Industry, Mine and Trade. Born in 1974 in the northern city of Shahroud, Fatemi Amin has a bachelor’s degree in electronic engineering from Ferdowsi University. He also has a master’s degree in economics and social systems engineering from Iran University of Science and Technology. As of 2021, he was in the process of obtaining a doctorate in strategic knowledge management from the University of National Defense. His views on industrial and trade policy are anodyne, but he appears to support replacing imports by upgrading Iran’s industrial structure using subsidies for advanced technologies.
Amin has held several important executive and managerial roles, including:
- deputy minister of development, planning and technology in the Ministry of Industry, Mine and Trade during Ahmadinejad’s second term
- member of the Board of Representatives of both the Tehran and Iran chambers of commerce, industries and mines
- consultant and director of investments and partnerships of Astan Qods Razavi (November 2017-March 2020), a major foundation sanctioned by the U.S. Treasury in 2021
- deputy of Astan Qods Razavi (January 2019-2021)
The following are remarks by Amin on key issues:
- “The issue of today's unemployment is the issue of unemployment of university graduates. With basic production, mining and business work we cannot create jobs for these graduates. We have to turn to economic drivers: electrical and electronic industries, industrial machinery, and production of automobiles and transportation equipment.” (August 2021)
On the automobile industry:
- “In the automobile industry we do not have any technical problems. The problems are three things: no competition in industry, low production, and revising and reforming managerial and economic structures.” (August 2021)
On economic development:
- “One of my main concerns is balanced development. We must provide fair distribution of resources and opportunities for all the people of Iran…. Balanced development is not just about industry, mines and trade. We should also train and improve human resources in different areas in the country.” (August 2021)
On the business environment:
- “80 percent of the problems in the business ecosystem are not beyond three issues: social insurance, tax and financing.” (August 2021)
- “Inflation is the chronic disease of the Iranian economy. Treating this disease requires two, two-and-a-half, or three years.” (August 2021)
Hojjatollah Abdolmaleki was confirmed as Minister of Cooperatives, Labor and Social Welfare. Born in 1981 in Shahr-e Rey, just south of Tehran, Hojjatollah Abdolmaleki holds a master’s degree in Islamic education and economics from Imam Sadegh University as well as a doctorate in economics from the University of Isfahan. He is a faculty member of Imam Sadegh University, as well as the deputy of employment and self-sufficiency and member of the Board of Trustees of the Imam Khomeini Relief Committee. He also serves as a member of the Central Council of the Popular Front of the IRGC.
Abdolmaleki considers himself a theoretician of resistance economics. He has written eight books on resistance economics and the Islamic and Iranian models of economic development. During Ahmadinejad’s presidency (2005-2013), Abdolmaleki was a member of the board of directors of the Social Insurance Fund for Villagers and Nomads and was an advisor to the Ministry of Economic Affairs and Finance. He was also a Principlist candidate in the 2016 parliamentary elections, but he did not get enough votes for a seat.
Abdolmaleki has also served as:
- secretary of the Economic Council of IRIB
- Iran’s representative to the World Bank’s International Summit in France (2010)
- secretary of the international “Seminar on World Development Report 2009” (in collaboration with the Ministry of Economic Affairs and Finance and the World Bank in 2010)
- director of the Encyclopedia of Islamic Economics Foundation and executor of the first edition of the encyclopedia (2011-)
The following are remarks by Abdolmaleki on key issues:
On economic openness:
- “Based on economic openness criteria, our economy is more open than the economy of China. The thing is China has not internally sanctioned its production. It has empowered its production. We have suppressed our production based on the international atmosphere.” (May 2021)
On production and use of resources:
- “In the economic revolution of 2021, the owners of agricultural lands have the right to carry out several different activities, including industrial production, livestock, poultry breeding and fish farming — and even construction. Per each percentage change of agricultural land to industrial, livestock or buildings, 12 million additional jobs will be created.” (March 2021)
- “For 42-43 years since the Revolution we have taken several actions in the field of employment. However, at this moment do we have information on the status of employment and unemployment of our people? If we enter a national ID, can we find out if the corresponding person is employed or unemployed? If they’re unemployed, are they job seeking? If they’re job seeking, which experiences and skills do they have and which job are they suited for? And if they do not have skills, which kind of skills are they talented and gifted in? No, we do not have this information, therefore we cannot properly make plans.” (August 2021)
Aliakbar Mehrabian was confirmed as Minister of Energy. Born in 1969 in Khansar, about 120 miles south of Tehran, Aliakbar Mehrabian has a bachelor’s degree in civil engineering from Iran University of Science and Technology and a master's degree in economics from the University of Tehran. As of 2021, Mehrabian was pursuing a doctorate in Economics at the Sciences and Research Branch of Azad University in Tehran. His thesis was on “the impact of removal of electricity tariffs on economic growth and household welfare with a resilience economics approach.” Mehrabian has expressed strongly protectionist views, perhaps buoyed by his success at increasing domestic production in industries under his purview.
His managerial and executive experiences include serving as:
- minister of Industry, Mine and Trade during Ahmadinejad’s presidency
- special assistant to president Ahmadinejad and executor of the Mehr Mandegar project (with the aim of implementing hundreds of large projects, especially dams, power plants, water supply, petrochemical refineries, railways, ports, etc.)
- chairman of the Working Group for supporting production of domestic goods.
Mehrabian was also an advisor to Ahmadinejad when he was the mayor of Tehran in the early 2000s. During Mehrabian's tenure as minister of Industry, Mine and Trade (2007 to 2011), Iran’s crude steel production capacity doubled in a staggering leap. Steel production increased by 41 percent. The clinker and cement industry also recorded unprecedented growth. Cement production capacity increased 66 percent from 2007 to 2012. The following are remarks by Mehrabian on key issues:
- “Today, we are perfectly self-sufficient in many strategic industries, and we don’t need imports anymore.” (January 2011)
On plans for utilities:
- “Based on the four-year plan and vision in collaboration with different sectors and the private sector, we can add 40,000 megawatts to the country’s electricity capacity.” (August 2021)
- “Based on the compiled plan, the level of utilization of rural drinking water, which is currently below 75 percent, will increase to more than 90 percent after four years.” (August 2021)
- “Based on the latest data, 166 sewage/wastewater treatment plants are active in the country. Therefore, we are trying to increase this number by 50 percent in the next four years.” (August 2021)
Issa Zarepour was confirmed as Minister Information and Communication Technology. Born in 1979 or 1980 in the western city of Eslamabad-e Gharb, Zarepour has a bachelor’s degree in computer engineering from Razi University and a master’s degree in computer engineering (software) from Sharif University of Technology. He is one of two of Raisi’s ministers who have earned degrees abroad. Zarepour completed his doctorate at the School of Computer Science and Engineering at the University of New South Wales in Australia. He holds two postdoctoral degrees in the field of computer networks.
Policies set by the Ministry of Information and Communication Technology have a significant impact on the development of Iran’s digital economy. Zarepour’s predecessor, Mohammad Javad Azari Jahromi, had a reputation for being pro-business. Under Azari Jahromi, the ministry supported the development of a startup ecosystem and the digitalization of major industries. To facilitate growth, Jahromi opposed filtering of social media platforms, which are a major channel for e-commerce in Iran.
Zarepour has been a member of the Faculty of Computer Engineering of Iran University of Science and Technology since 2017. As a university professor and specialist in the field of policy making and macro planning of information technology and cyberspace, he has extensive research experience, including publication of dozens of scientific articles in international journals. He has received several international scientific awards.
From March 2020 until his appointment, Zarepour served as head of the Statistics and Information Technology Center of the national judiciary. He was also the founder and head of Information Technology and the Digital Media Development Center at the Ministry of Culture and Islamic Guidance from the mid-2000s to early 2010s. During Ahmadinejad’s presidency, he served on the Information Technology Commission in addition to acting as an IT advisor to several ministers and government officials.
Zarepour is an alternate member of the board of the Clean Cyberspace Developers Association (FMP), which describes itself as an NGO that defends widespread web filtering and considers Instagram and Telegram harmful to the national sovereignty of Iran. The following are remarks from Zarepour on key issues:
On the role of big data and data mining in the judiciary:
- “Currently there exists big data on court orders, most of which needs to be made public after applying anonymity and removal of personal data… This valuable database can be used by those who work on social sciences, especially students of law, for data mining, as well as for giving feedback to the judiciary in different areas such as crime prevention.” (July 2020)
On the national internet:
- “National Information Network has been mistakenly understood as disconnected from the global network and internet…. National Information Network, which is globally known as National Broadband Network (NBN), is considered a national achievement for countries and does not mean disconnection from the global network. The issue is, when sending a message, why should the information packages related to the message exit the country, go to Germany, the U.S., and again go through this journey to get back to the country and reach the receiver. This means we have to pay the costs of international bandwidth, and our security and independence will be jeopardized, and if one day something happens, the internet gets disconnected, a ship’s anchor gets stuck, or if anything else happens, all our domestic services will stop working.” (August 2021)
On protecting internet users’ rights:
- “In the virtual space, people are worried about their children and teenagers… In countries where this technology has been created, tools have been foreseen for families to be able to manage their children. In the search engines that we use, there is a safe search option, so that children do not see everything. Unfortunately, we have been negligent of these capacities. In my opinion, we have left people without shelter in this space.” (August 2021)