Despite denials, Khamenei drives Iran’s economy

In his Nowruz speech, Supreme Chief Ali Khamenei denied involvement in financial decision-making, claiming it falls below the duty of the president. In actuality, nevertheless, his affect over the economic system is each profound and far-reaching.

Khamenei’s formal position in financial planning

Whereas Khamenei doesn’t straight handle financial ministries or oversee the nationwide price range—duties formally assigned to the presidential administration and parliament—he exerts management by means of different channels. This affect, rooted in each constitutional authority and casual networks, is complicated and multifaceted.

In keeping with Article 110 of Iran’s Structure, Khamenei has the authority to find out the overall insurance policies of the Islamic Republic. In collaboration with the Expediency Council, whose members he appoints, Khamenei points “Basic Insurance policies of the System,” which form the nation’s financial path.

The Planning and Price range Group, an administrative physique, should make sure that Iran’s growth plans—comparable to macro insurance policies within the oil sector—align with the overarching tips drawn within the Basic Insurance policies of the System paperwork.

Political

He additionally holds sway over the expenditure of oil revenues. Any withdrawal from the Nationwide Growth Fund of Iran (NDFI) requires his approval, for example. Not less than 20 p.c of all oil revenues are allotted to the NDFI, and successive administrations, together with Masoud Pezeshkian’s, have sought his permission to borrow billions of {dollars} from the fund over time to cowl price range deficits.

Directing the economic system by means of political engineering

Khamenei appoints the top of the judiciary and the members of the constitutional Guardian Council, which has the facility to veto laws, together with financial insurance policies and price range plans in the event that they battle together with his prescribed insurance policies. As Iran’s election watchdog, the Council additionally engineers all elections and ensures that candidates whose platforms aren’t aligned with Khamenei’s political and financial imaginative and prescient aren’t elected as president or make it to the parliament.

Financial entities below Khamenei’s direct management

Khamenei wields important financial energy by means of a community of quasi-charitable foundations, generally known as bonyads, and non secular endowments.

Among the many largest bonyads are:

• Mostazafan Basis
• Execution of Imam Khomeini’s Order Headquarters
• Martyrs Basis

Initially established to redistribute wealth and assist social welfare following the 1979 Islamic Revolution, these establishments have developed into main financial conglomerates working in numerous sectors, together with agriculture, building, mining, vitality, manufacturing, telecommunications, monetary providers, and actual property.

Their monetary actions stay opaque, regardless of property value a whole lot of billions of {dollars}.

These entities operate as strategic devices for sustaining Khamenei’s political and financial dominance. By appointing their management, he ensures loyalty and strengthens his management. In addition they assist finance Iran’s regional allies and home political factions aligned with him by means of a fancy system of privilege distribution—generally referred to as rent in Iranian economic and political jargon.

The IRGC’s financial affect

The Revolutionary Guards (IRGC), which function straight below Khamenei’s authority as commander-in-chief, additionally management huge segments of Iran’s economic system. They’re allotted a portion of the nation’s oil exports, which they reportedly promote by means of entrance corporations and intermediaries to evade US sanctions—producing funds for his or her army operations and regional actions.

The IRGC dominates industries comparable to building, vitality, and telecommunications. Moreover, it’s granted a direct share of Iran’s oil revenues, allegedly promoting oil by means of entrance corporations and third-party intermediaries to bypass US sanctions and finance army and regional operations.

The extent of Khamenei’s financial management

Quantifying the financial footprint of bonyads, non secular endowments, and the IRGC is troublesome on account of their opaque monetary practices. Nonetheless, estimates counsel these entities collectively management not less than half of Iran’s GDP.

Although they’re technically topic to taxation and audits, they use complicated strategies to hide monetary information, making significant oversight almost not possible.

Khamenei’s agency grip over these establishments reinforces his dominance over the Iranian economic system, limiting transparency and blocking main reforms. This management expanded considerably after a 2005 privatization initiative that channeled state property to not a real personal sector, however to IRGC-linked entities, bonyads, and corporations benefiting from monopolistic privileges.