Iran's Khamenei criticises government's economic record


Reuters

UPDATE 2-Iran's Khamenei criticises government's economic record


* Comments will put pressure on president ahead of elections
    * Rouhani's New Year's message lauds economic achievements
    * Iranians are celebrating their New Year, or Nowruz

 (Adds analysts)
    By Bozorgmehr Sharafedin and Babak DehghanpishehDUBAI, March 20 (Reuters) - Iran's supreme leader, Ayatollah
Ali Khamenei, said on Monday the government's economic policies
had fallen short and called for a new "resistance economy" to
create jobs, piling pressure on the president before May
elections.
    Hardliners led by Khamenei have repeatedly criticised
President Hassan Rouhani, particularly for the terms of a
nuclear deal he reached with world powers which lifted economic
sanctions and was supposed to boost the economy.
    "I feel the pain of the poor and lower class people with my
soul, especially because of high prices, unemployment and
inequalities," Khamenei said in his New Year's message.
    "The government has taken positive steps but they do not
meet people's expectations and mine," he added, setting out a
clear battle line before the presidential vote.
    The New Year, or Nowruz, is the country's most important
national event, which involves large family gatherings, gifts
for children and vacations.
    Unemployment stood at 12.4 percent in this fiscal year,
according to the Statistical Center of Iran, up 1.4 percent from
the previous year. About 3.2 million Iranians are jobless, out
of a total population of 80 million.
    "I call the new year a year of resistance economy,
production and employment," Khamenei said in the pre-recorded
video broadcast on state television.
    Khamenei has coined the term "resistance economy" to
describe measures to make Iran's economy more self-sufficient,
in contrast to Rouhani's policy of seeking to open Iran to more
international trade and investment.
    In his New Year's message, Rouhani touted the economic
achievements of his government and called for citizens' rights
to be respected, points likely to resonate with his supporters
in the approaching election.
    "What we achieved in curbing inflation (and boosting)
economic growth and jobs in the past year was unprecedented in
the past 25 years," Rouhani said in a video message aired on
state TV.

    CONTINUED DIFFICULTIES
    Khamenei's latest criticism came as a number of prominent
political figures, including Ayatollah Ahmad Jannati, the head
of a body that selects Iran's supreme leader, also criticised
Rouhani for his economic policies. [nL5N1GK6EB]
    But conservatives, who hope to stop Rouhani winning a second
four-year term, have yet to identify their presidential
candidate.
    "Mr. Rouhani can't expect the Supreme Leader to take his
side in the elections. The past has shown that the position of
the Supreme Leader is more independent," said Saeed Leylaz, a
Tehran-based political analyst who worked as an adviser to
former president Mohammad Khatami.
    "After this new year period Mr. Rouhani can expect to face a
lot of pressure and criticism."
    Despite lifting of international sanctions, the world's top
banks have refrained from doing business with Iran due to fears
of being penalised by U.S. sanctions that have remained in place
despite the nuclear deal. This has slowed Iran's efforts to
rebuild its foreign trade and lure investment.
    Although inflation dropped to single digits and real GDP
grew by as much as 7.4 percent, the IMF reported in February
that "growth in (Iran's) non-oil sector averaged 0.9 percent...
reflecting continued difficulties in access to finance".
    "Aware of people's economic woes, Ayatollah Khamenei is
trying to distance himself from (Rouhani's) government and move
to the people's side, minimising responsibility," said Hossein
Rassam, former Iran adviser to Britain's Foreign Office.

 (Reporting by Bozorgmehr Sharafedin in Dubai and Babak
Dehghanpisheh in Beirut; Editing by Julia Glover and Vin
Shahrestani)
 ((bozorgmehr.sharafedin@thomsonreuters.com; Mobile: +961-70 735
367;))

Keywords: IRAN KHAMENEI/NEW YEAR (UPDATE 2, PIX, TV)



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