PHOTO: Supreme Leader listens to President Rouhani, July 2015


Dealing with a warning from the Supreme Leader, President Rouhani has echoed Ayatollah Khamenei’s slogan of the “Resistance Economy” but has tried to maintain the Government’s approach on domestic and foreign policy.

Last weekend, Ayatollah Khamenei used a speech on Iranian New Year to chide the Government over its foreign policy approach, to warn against any curb on the Revolutionary Guards, and — perhaps most importantly — to indicate that his office could take over planning for Iran’s economic problems.

See Iran Daily March 21: Supreme Leader Warns US & the Rouhani Government

The Rouhani Government has sought to use its responsibility for recovery, following years of mismanagement, corruption, and sanctions, to open up political and social space. Bolstered by unexpected centrist-reformist success in the February 26 elections, Rouhani and former President Hashemi Rafsanjani have tried to put pressure on regime institutions such as the judiciary and the Guardian Council.

Khamenei pushed back on Sunday with an implication that statements by Government officials, including Rouhani, might be “giving up principles and red lines and yielding to the arrogance [enemy]”. The statement has been reinforced by officials such as the Secretary of the Expediency Council, former Presidential candidate and Revolutionary Guards officer Mohsen Rezaei.

See Iran Daily, March 23: The Regime’s Growing Fight Over the Economy

Rouhani: “Constructive Interaction with the World”

In a meeting with the managing directors of free trade zones, Rouhani said, “The Resistance Economy will be possible through action, deed, planning, and avoidance of slogans.”

While adopting the Supreme Leader’s proclamation of this Iranian year as “Resistance Economy: Action and Implementation,” Rouhani promoted the Government’s goals, “Decreasing the inflation rate and bringing it to single digits has been, and will be, the government’s sustainable policy.” He said employment can be increased and non-oil income can be promoted, reducing reliance on Iran’s chief export amid the sharp fall in global oil prices.

Rouhani then implicitly pursued his own push-back on the Supreme Leader, who lectured on Sunday that the July 2015 nuclear deal, the Joint Comprehensive Plan of Action, should not simply be followed by a “JCPOA 2 and 3” with a naive belief that these will solve Middle Eastern and economic issues.

The President, who had hailed the post-sanctions policies of “JCPOA 2″ in his New Year’s speech, told the managing directors, “We should be able to use the new atmosphere with firm resolve for achieving development and prosperity for the country.”

He maintained his foreign policy of “engagement” despite the Supreme Leader’s pressure, “One of the important and emphasized parts of Resistance of Economy policies is constructive interaction with the world.”

With Khamenei’s declaration, the Government could face a Parliamentary challenge over its 2016/17 budget — which was delayed for months as Iran awaited implementation of the nuclear deal and the February elections — and its 2016-2020 National Development Plan.

However, the state of Parliament will not be confirmed until run-offs for 69 of the 290 seats are held in late April.

After the first round in February, the unexpected success of the centrist-reformist List of Hope meant that conservatives, who have dominated Parliament for more than a decade, were not assured of a majority.