by Hamid Mafi

While the right-wing factions of the Islamic Republic step up their opposition to the Rohani administration, and as the Revolutionary Guards directly oppose the so-called “economic infiltration”, Iran’s Supreme Leader has chosen to neither endorse or oppose the administration’s “Resistance Economy policies action plan”. He has, however, recommended four items to be kept in mind while drawing up future plans for economic development.

The Tasnim website published the letter from Ayatollah Khamenei’s chief of staff to the vice president on November 10, which indicates that the Supreme Leader does not intend to interfere in the government’s plans. However, withholding his endorsement of the government’s action plan and issuing four recommendations are marks of his displeasure with the plan and his determination to interfere indirectly.

Ayatollah Khamenei and Hassan Rohani

Signs of Ayatollah Khamenei’s dissatisfaction with the economic plans surfaced in a speech he gave during the annual meeting with Cabinet members, IRGC commanders and a group of young elite, where he stressed that he is not pleased with the progress of the “Economy of Resistance”. He also wrote to the president to say that following the implementation of the nuclear agreement between Iran and the 5+1, “economic prosperity, improvement of the people’s livelihoods and solving current problems can only be achieved through all-round persistence in the Economy of Resistance.”

The administration run by the House of the Leader

Ayatollah Khamenei has supported the Rohani administration whenever it has gotten into tough spots in the past two years. Even when Parliament was putting up a serious opposition against the approval of the nuclear agreement, he sided with the administration, closing that episode in favour of the Rohani government.

However, after the deal was sealed, and while the government was abuzz with visits from foreign trade delegations, he began changing gear. Making statements about “enemy infiltration” and calling for a ban on the import of American goods gave the green light to the hardliners to begin attacking the government for ignoring the “Economy of Resistance” policies.

The change in the leader’s position could be explained through the structure of the Supreme Leadership and the structure of money and power in the country. Ali Akbar Nategh Nouri has said that under the leadership of Ali Khamenei, the position of the Supreme Leader has turned into a government body carrying out various executive roles through various experts.

With the expansion of various administrative roles, the volume of economic activities carried out by groups linked to the Leader has also ballooned. Religious foundations, institutions established in the early years of the Revolution, numerous companies affiliated with the Revolutionary Guards, the Barekat Foundation and relief committees are among the many agencies covered by the House of the Leader.

The former head of the Veteran’s Foundation, Mohsen Rafighdoost, has been quoted as saying that these agencies are responsible for providing the funds for the programs the leader commits to in his provincial visits.

The extensive financial activities of these organizations, which according to official statistics account for half of the country’s economy, have resulted in the establishment of planning offices for various sectors under the umbrella of the House of the Leader. For instance, two years ago the Mehr News Agency reported that the head of the Heavy Industry Office of the House of he Leader was present at a military development project.

The structure can only be regarded as a government within a government, carrying out its own projects and plans through the main centre of power. The economic plans and recommendations presented by the leader are accordingly the product of these forces, which are commonly unknown to the public and the media.

Dropping a banana peel under the administration’s foot

The Rohani government has to present Parliament with its budget for next year within a month and also finalize its five-year development plan. The plans now have to comply with Economy of Resistance principles in light of the Leader’s recent statements.

A review of the outlines of the Economy of Resistance plans compared with the policies assumed by the Rohani government in the past two years reveals significant disparity. The government’s economic approach is “market oriented”, “compliance with IMF economic policies”, and “stimulating economic growth through increasing oil revenues and foreign investment”.

According to the Leader’s recommendations, the government is charged with decreasing the dependence on oil revenues in its coming budget. Meanwhile, the government is hoping for increased exports and oil revenues. At the same time, compliance with Economy of Resistance principles would force the government to reconsider its objective to attract foreign investment.

Economic transparency also calls for the elimination of military and religious bodies from the economy and the establishment of powerful and independent monitoring bodies. In the past two years, despite opposition from some of the top figures in the administration against the involvement of the military in economic projects, Hassan Rohani has supported the economic activities of the IRGC, which have increased in the past two years.

An increase in tax revenues requires greater transparency and the ability to collect taxes from those entities that lack transparency and evade taxes, organizations that are not held accountable for their income and are in effect immune from inspection despite enjoying funding from the government. Many of these bodies are being directly run under the umbrella of the House of the Leader.