Iran’s Supreme Leader Ali Khamenei strongly the Rouhani government on Thursday for failing to effectively stimulate economic growth in the country and called on the president to focus more on self-sufficiency. “If all necessary measures regarding the resistance economy had been implemented, we would have witnessed a tangible difference in the country’s economic conditions and in people’s lives,” Khamenei was quoted in the Iranian media. “I have also told the honorable president that mentioning broad metrics [about economic growth in Iran] is good as long as the figures aren’t skewed; but they still do not have any impact on people’s lives in the short and immediate terms,” he told a gathering of Iran’s Assembly of Experts. The Supreme Leader urged the government to take practical measures to accelerate productivity and job creation so that “people feel their impact in their lives.”

Comment: The timing of Khamenei’s criticism is significant as it comes just two months before Iran’s upcoming presidential elections. As incumbent President Hassan Rouhani is seeking a second term, the country’s stagnant economy appears to be his Achilles heel.

During the 2013 election campaign, Rouhani’s central message was to negotiate a nuclear deal with the West to remove international sanctions and revive Iran’s economy. But while most nuclear-related international sanctions on Iran were lifted in January 2016, American sanctions related to terrorism and Iran’s missile program, coupled with the Trump administration’s tougher approach toward Tehran, have discouraged international companies and foreign banks to invest in and do business with Iran. But sanctions are not the only problem. The Rouhani government has also failed to tackle endemic corruption and mismanagement that hinder economic recovery in the country. Transparency International Corruption Perceptions Index for 2016 on January 25 showed Iran shared 131st position with Russia. 

The term “resistance economy” is often used by Iran’s top clerics and military leaders to emphasize policies that help promote self-sufficiency to counter international economic sanctions. In early 2014, Khamenei a decree that outlined general policies for the “resistance economy”  that required the government to diversity Iran’s exports, reduce the country’s dependence on foreign imports of raw materials, and develop knowledge-based high-tech industries. The Supreme Leader named the current Persian year – which ends on March 20 – the “Year of Resistance Economy: Action and Implementation.” This shows that Khamenei, who has the final say on all state matters, does not want the nuclear deal to divert attention from the regime’s efforts to reduce its vulnerability to external pressures and economic sanctions.