Raisi’s Super Slogans Were Just Hot Air
Raisi’s Super Slogans Were Just Hot Air According to Iran Gate, during the 2021 presidential elections, Ebrahim Raisi made numerous grandiose promises, mainly in the field of economic management. However, more than 14 months into the start of the thirteenth government, it can be clearly said that none of these promises have been fulfilled, and all remain unresolved.
Among the most important promises Raisi made to Iranian citizens were the construction of four million housing units over four years, ending government borrowing from the central bank to control Iran’s inflation, and revitalizing the stock market. Although the government’s command-style economic management approach has made Raisi’s list of promises longer than at the beginning of his term, Iran Gate has examined three of his most significant slogans and their outcomes in this report.
Raisi’s Dream-Selling to Renters and First-Time Homebuyers
Arguably, the promise to build four million housing units over four years was Raisi’s most significant pledge during the 2021 elections. But now, more than a year into the thirteenth cabinet’s term, it can be said with certainty that not even a single housing unit has been delivered to applicants. According to statistics published in Iran’s official media, ground has been broken for about 500,000 housing units.
However, by the last days of October 2022, no unit had even reached the rough construction stage, let alone been handed over to applicants by the government. This situation was predictable by economists last year, but Raisi’s close associates convinced him that selling the dream of homeownership to young people and renters could garner public support for his candidacy.
Although the election results showed that Raisi stalled and took over the presidency from Hassan Rouhani with the lowest possible vote, he repeatedly claimed that his government was trustworthy and now must be accountable to all Iranian citizens. First, he needs to explain how he made the promise of building four million housing units and based on which expert plan. During the campaign, Raisi continually emphasized that he had a plan according to which building four million homes in the thirteenth government was entirely possible.
But now, less than three years remain of the government’s term, and the government has yet to deliver even one apartment unit to applicants. The very low public interest in Raisi’s National Housing Movement plan also showed that citizens are well aware of the baseless nature of the thirteenth government’s slogans.
The controversies surrounding the Ministry of Roads and Urban Development, which arose due to the questionable activities of Rostam Ghasemi and his advisors and deputies, are another obstacle to the implementation of this plan. Although economists believe that even with competent and skilled managers, it is impossible to build four million homes in the remaining three years of Raisi’s government, let alone when the ministry is led by someone who still doesn’t know if he is a minister or just in charge of roads and urban development.
Inflation Holds the Government’s Reins
Raisi repeatedly claimed last year that the 2022 budget was structured so that the government would not need to borrow from the central bank. Borrowing, which results in nothing but increased liquidity and monetary base, ultimately leads to heightened inflation. Throughout the past 14 months, Ebrahim Raisi has consistently promised to control rampant inflation. However, with the central bank’s bizarre data manipulation, the government managed to control inflation by two to three percent on paper.
But reports from the Statistical Center show that the thirteenth government has set a new record for the highest point-to-point inflation rate in Iran’s history. The misguided policy the government implemented under the pretext of preventing smuggling and labeled as removing preferential currency, due to its non-expert nature, caused the middle and lower classes to buckle under the sudden inflation jump.
The inflation announced by the Statistical Center remains at the 40% peak. If we consider Shaparak transaction statistics as a criterion for measuring purchasing power over the past year, it becomes clear that by the end of this summer, various social classes experienced a negative 25% growth in purchasing power. Meanwhile, signs of indirect and severe government borrowing from the central bank are visible, borrowing that has led to the issuance of high-powered money, causing experts to predict a much darker inflation outlook for the second half of the year than what is currently happening.
Liquidity Nearing 6 Quadrillion Tomans
Another indicator contradicting the government’s claim of not borrowing from the central bank is the more than one quadrillion toman jump in the country’s liquidity. Last year, when Ebrahim Raisi won the election, liquidity was around 4 quadrillion tomans, but now it has surpassed the unbelievable 5 quadrillion toman mark, causing unparalleled concern among experts.
Economists believe that liquidity growth of over 35% is worrying, but what has frightened the expert community is the outlook for liquidity growth. This outlook, given the speed of liquidity growth over the past year, indicates breaking the 6 quadrillion toman liquidity record in less than nine months.
Thank God Raisi Became President
In the 2017 presidential election, four years after suffering a heavy defeat from Hassan Rouhani in 2013, Raisi said in an interview, ‘Thank God we didn’t become president so that the dollar wouldn’t reach 5,000 tomans.’ Now, five years later, Ebrahim Raisi won a controversial election about a year and a half ago, in which he saw no competitors beside him.
On the day he took control of the government, the dollar was about 24,000 tomans, but over the past year and a half, not only has it broken the historical 33,000 toman record, but it currently hovers around 32,000 tomans despite the government’s relentless interventions in the foreign exchange market. This currency price jump means a more than 35% increase in the dollar rate over just one year.
This is in a situation where no fundamental new development harmful to Iran’s economy has occurred in international relations. The only unpleasant development regarding sanctions is the protracted negotiations to revive the JCPOA, which is also the product of a negotiating team repeatedly praised by Raisi.
Stock Market on the Brink of a Major Collapse
From the day the thirteenth government started, Raisi and the economic team repeatedly promised to support the capital market. However, a look at the stock market’s trend over the past year indicates the government’s command-style economic management model. On the one hand, the government’s immature policies in international relations have created new risks for the market, while on the other hand, new human rights sanctions are a new threat to the Tehran stock exchange, resulting from the government’s foolish policies on hijab and modesty.
There are also murmurs of the formation of circles among shareholders calling for a widespread protest movement across the country. This movement, due to the incompetence of the stock exchange organization managers and the disastrous performance of the government’s economic team, is taking shape and could be a death knell for all of Ebrahim Raisi’s economic promises and slogans.
Numerous analyses and reports on the stock market and Iran’s economic situation have been prepared and organized by Iran Gate. For convenience, several of them related to this topic are listed below.
- How the Stock Market Shrunk Under Raisi’s Government
- Raisi’s Stock Market Promises: Slogans That Were Worthless
- Improving Governance: A Principlist Rhetoric