Khamenei: Iran's Economy a "Decade Behind"

On January 30, Supreme Leader Ayatollah Ali Khamenei admitted that Iran’s economy was “a decade behind” because of sanctions, fluctuations in oil prices, and poor government management. Rapid growth is “absolutely crucial in order to solve the tangible problems associated with people’s livelihood and the difficulties experienced in households,” he said in a televised speech.

Khamenei called on the government to streamline the bureaucracy to improve the business climate. Processes, such as applying for a business license, should not impede new ventures. He also criticized “arbitrary” decisions by regulatory institutions. “They interfere in people’s business for no reason,” he said. “This must also be eliminated.”

Khamenei acknowledged that Iran’s economy was stagnant from 2011 to 2021. He called the high unemployment—almost 15 percent among young professionals—a disgrace. “We keep asking ourselves why these people are leaving. Why do they move abroad? Well, you need to give them jobs,” he told dozens of dozens of entrepreneurs, manufacturers, and businesspeople.

At the start of 2023, the economic outlook appeared gloomy without a revival of the nuclear deal and relief from U.S. sanctions. Iran was on track for minimal growth, which was largely dependent on oil exports. The government did not have a viable strategy for curbing inflation, which hovered near 50 percent. More than half of Iranians were living below the poverty line, according to official statistics. On January 21, the rial hit a record low at 447,000 rials to one U.S. dollar. (The rial traded at 70 to the dollar on the eve of the 1979 revolution.) The following are excerpts from Khamenei’s speech.


On Youth Unemployment

“We have many professionals among our human resources, fortunately. One of the things we take pride in and one of the advantages we have is that we have a large professional workforce in the country. Well, we had, for example, about 150,000 students in the beginning of the Revolution. Now we have millions of students and millions of graduates in different scientific fields. These people need jobs. They want to have an occupation. Yes, it is an honor to have a young, professional workforce, but what if they are unemployed? This is a disgrace. It is not something to take pride in anymore. We keep asking ourselves why these people are leaving. Why do they move abroad? Well, you need to give them jobs. Some time ago, there was a similar meeting in this Hussainiyah. I said there that our educated, competent, young people who have either come from abroad, have studied abroad, or have studied inside the country only want two things from us. The first is a job, and the second thing they want is to have the opportunity to advance scientifically. We must provide these people with careers. If we fail to advance rapidly, we will not be able to create employment for this large group of young professionals and scientists.”   


On Deregulation

“We must prepare the environment in such a way that people can easily take part in business. They can trade and produce. We must resolve these conflicting decisions. The administrative process for obtaining a license, to solve the problems of those who are engaged in business must be corrected. We must minimize the processes and deregulate. This is not the same as being careless. Another issue related to the improvement of the business environment is about the arbitrary interventions of regulatory and non-regulatory institutions. These must also be removed. They interfere in the work. Now, sometimes the issue is about legal interventions where someone is told that what they are doing is illegal. [Intervention] is needed there. No one has any objections to that. However, they intervene arbitrarily at times. They give illegal opinions even though there is no need for them to do. They interfere in people’s business for no reason. This must also be eliminated.”


On Economic Growth

“Economic growth is absolutely crucial in order to solve the tangible problems associated with people’s livelihood and the difficulties experienced in households.”

“We need rapid, continuous growth. The reason for this is that we are behind in some areas. In the 1390s [from 2011 to 2021], we countered a setback and a so-called relative standstill in economic activities for various reasons. Not all of this can be attributed to weak management, no. Some of it is related to external factors, and part of it is related to internal factors. The sanctions had an impact, the reduction in oil prices at a certain point in time had an effect. The fact that the country was focused on nuclear energy and the economy was dependent on it had an impact. Various issues like this have had an impact. As a consequence of this, we are currently a decade behind. And there are many negative indicators showing this. These are reliable indicators from official organizations and are not just empty claims.”

“Compensating for having fallen back is not an easy task. It will naturally require continuous economic growth over a medium period of time, if not the long term. In other words, we must concentrate our efforts for at least seven, eight, or 10 years, and proceed while maintaining the necessary conditions.”

“This year, in the exhibition that was held here two days ago, I saw that good work has been done both in the field of knowledge-based companies and also in the field of job creation and entrepreneurship. Some relatively good work has been done.”

“As I have said many times before, due to the country’s God-given resources, its geographical, international, political position, and especially its human resources, the country’s talent and growth capacity are very high and exceptional in certain fields. For this reason, the future of the nation and the prospects of Iran's progress are much brighter than the current predictions.”

“The advancement of a country’s position is largely related to its economic situation. When a country’s currency depreciates, its economic possibilities diminish. It becomes less credible in today’s world. We need to experience economic growth in order to maintain the country’s position in the world.”