A year after Iranian President Ebrahim Raisi took office, his government has contained the Covid pandemic but faces a sharp downturn in the sanctions-hit economy as nuclear talks remain deadlocked.
Pledged to help the poor in particular, the ultra-conservative cleric is now facing inconspicuous consumer prices that have sparked protests.
Raisi was elected in June last year in a vote in which less than half of voters took part, after his main rivals were disqualified from the electoral college.
He was sworn in on August 3 by Supreme Leader Ali Khamenei and sworn in two days later as head of government in the Islamic Republic.
When he formed his cabinet, Raisi named his two top priorities: controlling the region’s worst Covid outbreak and turning around the battered economy.
Iran’s vaccination campaign, long hampered by US sanctions, has been massively intensified using Chinese and Russian drugs.
For Hamidreza Taraqi, a top figure in the Islamic Coalition Party, part of the conservative alliance backing Raisi, the government “managed to contain the coronavirus and eliminate its effects.”
The UN’s World Health Organization says more than 58 million Iranians, or about 70 percent of the population, are now fully vaccinated.
“Raisi’s government oversaw widespread vaccinations against the coronavirus after the state reversed course and approved foreign vaccine imports,” said Henry Rohm of US-based consultancy Eurasia Group.
But on the economic front, Raisi’s record is more mixed as Iran continues to suffer from severe sanctions that keep it isolated from global financial systems.
– Nuclear talks –
Iran had hoped for greater prosperity after a landmark 2015 nuclear deal with major powers that gave it sanctions relief in exchange for curbs on its atomic program.
However, former US President Donald Trump in 2018 unilaterally withdrew Washington from the agreement and reimposed a sanctions regime.
The economic pain has deepened popular distrust in Iran of the government, both under the previous president, the moderate Hassan Rouhani, and under Raishi.
The darker mood, analysts say, was reflected in the record abstention rate in last year’s election, which came after a crackdown on protest movements, especially since December 2017 and again in November 2019.
Iran had returned to economic growth under Rouhani after the recession of 2018-2019.
But hit by Trump’s sanctions that have dramatically curtailed vital oil exports, Iran’s GDP per capita is now not expected to recover to pre-crisis levels until next year, according to the International Monetary Fund.
– “Social upheaval” –
In April 2021, with President Joe Biden in the White House, talks began in Vienna to save the nuclear deal.
Negotiations resumed in November 2021 after a pause around Iran’s presidential election, but have yet to make significant progress, while the Raishi government faces a budget deficit that economists see as abysmal.
Inflation, which has been eroding the purchasing power of households for years, reached 54% in June compared to last year, according to the latest official data.
And the rial, which had rallied somewhat early this year on hopes of a deal at nuclear talks, has since resumed its rapid descent and hit a new low in June against the dollar.
Then, in May, the government began removing state subsidies for flour and raising prices on staples such as oil and dairy products — measures that particularly penalized the poor whom Raisi supported.
“The country’s economic horizon is far from clear… and economists predict we will face more rising prices,” Mehdi Rahmanian, editor of the reformist Shargh newspaper, told AFP.
The rising cost of living has sparked protests in several Iranian cities in recent months.
Much now depends on how the nuclear talks turn out, Rome said.
“If the nuclear negotiations collapse, as seems likely,” he said, “Iran will likely face more significant economic and social upheaval.”