Supreme Leader Khamenei used Iran’s New Year holiday to deliver his most comprehensive plan for Iran’s economy. His address, proclaimed from his hometown of Mashhad, outlined ten principles of the “Resistance Economy.”  From this speech, it is clear that Khamenei’s plan for Iran’s economic recovery is quite different from that of Rouhani and his cabinet. Moreover, he threw down the gauntlet that he would hold Rouhani responsible for a failure to produce promised improvements in Iran’s economy. Left unsaid but implied was the threat that if Rouhani failed to adopt a “Resistance Economy” approach, it would negatively impact the President’s aspirations for a second term.

The very title of his Iranian New Year’s Speech, “Sale Moghavemate Egtessadi: Amal va Ejraa”, means “The Year of the Economy of Resistance: Action and Implementation.” This is a clear signal to the Rouhani administration as to what path the President should take in managing the economy.

Khamenei enumerated the following fundamental actions designed to revive Iran’s economy:

  1.  Resurrect domestic production by reopening Iran’s production facilities, 60% of which had been shut down during the sanctions period.
  2. Avoid exports that weaken the goal of restoring Iran’s indigenous production.
  3. Do not waste the money flowing into the country in the post-nuclear deal era.
  4. Transform sensitive sectors of the economy into information- and knowledge-based orientation, rather than exporting raw materials like oil and gas, while also improving the country’s ability to produce planes and ships.
  5. Make technology transfer a condition for any foreign commercial deal.
  6. Fight corruption.
  7. Fight drug trafficking.
  8. Give special help to small and medium size industries. This step is designed to demonstrate that the Regime must be on the side of lower classes whose chief responsibility in life is to feed their families. The government must help with “Boojeh Aashpazkhsneh,” i.e. “Kitchen Budget” issues.
  9. Promote energy efficient projects.
  10. Construct Iran’s own plants; resist temptation to import turn-key factories from abroad.

Khamenei’s warning to conserve currency windfalls from the lifting of sanctions is probably a criticism of Rouhani’s whirlwind visit to West European countries, during which he concluded deals for big-ticket items. For instance, Rouhani purchased 118 Airbus aircraft from France  and 20 Turbo Prop aircraft from Italy.

Hardliner Majles (Parliament) members quickly exploited Khamenei’s address to criticize Rouhani and Foreign Minister Zarif for emphasizing improved relations with the West during the first two years of the former’s presidential term. MP Gholam Reza Mesbah declared: “the government should have been concentrating on the ‘Resistance Economy’ program with special emphasis on improving Iran’s domestic production, instead of opening our economy to the outside world.”

Iranian journalist Abddullah Abdullahi commented that it is clear that Ayatollah Khamenei wants Rouhani to refocus his self-sufficient “Resistance Economy” approach.  One conservative figure on the Majles Planning and Budget Committee also warned that the government’s economic programs should not result in increased dependency upon “outside powers.”

Underscoring the serious nature of this criticism of Rouhani’s presidency was Professor Hojatollah Abdolmalehi of Imam Sadeq University, which has ties to the Islamic Revolution Guard Corps. He stated that “beneath the inability of liberal economists to implement the Leader’s ‘Resistance Economy’ program is a proclivity to embrace secular and anti-religious overtones."

Rouhani’s management of the economy will be closely monitored by hardliners seeking a return to popularity and the presidency in the 2018 presidential elections.