How feasible is Khamenei’s economic doctrine for Iran? - razier

How feasible is Khamenei’s economic doctrine for Iran? –

Al-Monitor | Bijan Khajehpour: Iran’s Supreme Leader Ayatollah Ali Khamenei has laid out his vision for how the country’s economy needs to be reformed in order to resist sanctions. His extensive policy speech on May 14 was more detailed than previous ones and also included admissions about the existence of “maladies” and the need for significant structural reforms. But what needs to be undertaken to achieve the goals outlined in Khamenei’s core statements?

In outlining the maladies Iran faces, Khamenei referred to “our dependence on oil.” This statement is correct, and the call to reduce dependence on oil export revenues is a reasonable approach, though it has been an objective in Iran for decades. At the current juncture, as Iran faces challenges in selling its crude oil due to US sanctions, one approach would be to allow for the establishment of mini refineries across the country — a proposal that is gaining momentum in expert discussions in Iran. However, as such entities would be best materialized through private sector investments, impediments to achieving this objective can be found in the second and third maladies identified by Khamenei.

Indeed, the second malady is the “unnecessary intervention of state organizations in the area of the economy.” The dominant presence of governmental and semi-state institutions (such as religious, revolutionary and military foundations) in economic activities is an inhibiting factor in the development of the country’s genuine private sector. As explained at Al-Monitor last month, “The feeling among private entrepreneurs is that there is a threshold up to which they can grow. Beyond that threshold, private businesses have to be taken over by semi-state institutions.” This shortcoming in the Iranian economy can only be addressed through serious political reforms to which Khamenei would have to commit in the process