Weapons of Mass Destruction (WMD)

Iran: Ministers' Exits Could Hint At Further Changes

By Vahid Sepehri

August 14, 2007 (RFE/RL) -- In Iran, two economy-minded ministers of President Mahmud Ahmadinejad's government stepped down on August 12. Some observers see the departures of Industry and Mines Minister Alireza Tahmasebi and Oil Minister Kazem Vaziri-Hamaneh as part of an effort to give President Mahmud Ahmadinejad greater control over policy-making in two key areas.

Whether they were resignations or thinly veiled dismissals is unclear. But the appointments on August 12 of caretaker ministers for the Oil and the Industry and Mines portfolios confirmed the result.

Departing Oil Minister Vaziri-Hamaneh was made a presidential adviser on oil and gas.

No new post was announced for the outgoing Industries and Mines Minister Tahmasebi.

The president appointed Ali Akbar Mehrabian, an official charged with the implementation of gasoline-rationing plans, as the acting industries and mines minister. He picked Gholamhussein Nozari, a deputy oil minister and head of the National Iranian Oil Company, to be acting oil minister.

Why Now?

There has been much speculation over the departures. AP suggested that both ministers had resisted some of the president's intended changes at their ministries -- including personnel changes or appointments that included presidential allies or confidants.

Several commentators said Vaziri-Hamaneh was not keen on the president's frequent promises to uncover and root out a purported "oil mafia" -- officials or state-affiliated businessmen who have allegedly used their connections to earn fortunes on the sidelines of grand oil-sector deals. AP quoted Tehran-based observer Said Shariati as saying on August 13 that Vaziri-Hamaneh's removal may have been a response to the unpopularity of recent gasoline rationing.

Reuters noted on August 13 that the Oil Ministry was also accused of agreeing to provide Pakistan and India natural gas through the "Peace Pipeline" project at a disadvantageously low price. Vaziri-Hamaneh recently rejected claims by parliamentarians that Iranian negotiators had agreed to sell gas at a 30 percent discount. He said there has been no agreement on price, so no discount could have been given. The daily "Etemad" cited regional gas sales as a factor suggesting Vaziri-Hamaneh had been removed. The same paper on August 13 observed that Vaziri-Hamaneh had also failed in the past two years to attract investment from major international oil companies.

Reuters quoted an unnamed Oil Ministry official as saying that, in the end, Vaziri-Hamaneh simply never enjoyed presidential favor -- he was appointed as a safe and technocratic choice in 2005, after parliament rejected three initial Ahmadinejad nominees as unfit for what is seen as a technical and specialist ministry. The daily "Etemad" suggested that Ahmadinejad would like to appoint a closer ally to help him eliminate what he's referred to as the "oil mafia" and to be seen to put oil money on people's "dinner tables." It quoted a deputy head of the parliament's Energy Committee, Hossein Afarideh, as saying that Vaziri-Hamaneh was "never approved by the government." He added that he "expected [Vaziri-Hamaneh] to be removed much sooner than this."

Industrial Woes

The outgoing industry and mines minister, Alireza Tahmasebi, has faced more concrete problems. Tehran-based economist Said Lailaz wrote in "Etemad" on August 13 that figures provided in recent years by Iranian Central Bank hinted at weak -- and declining -- industrial output. Lailaz wrote that the growth in the Persian year to March 2007 of the value of industrial output was the lowest in seven years despite significant state investment each of the past two years. Lailaz forecast continuing industrial decline, leading him to conclude that "for the first time since the [Iran-Iraq war of 1980-88], the engine of Iran's economy, the industrial sector, has effectively broken down." Lailaz did not lay the blame solely on Tahmasebi; on the contrary, he pointed out the role of what he described as "contradictory" government policies. He said the government apparently preferred to pour money into its own job-making schemes, rather than into existing industrial enterprises. Lailaz also argued that industry was hurt by the government's tampering with tariffs, and by its liberalization of some imports while the prices of some domestically made goods were fixed. Moreover, he noted the inflationary effect of the spending of billions of petrodollars inside the country. Lailaz wrote that Tahmasebi might, of course, have objected, or resisted government moves, or resigned earlier. One foreign-based website that covers events in Iran, rooz.com, observed on August 13 that Tahmasebi had been reluctant in the past two years to cite figures for the industrial and mining sectors, and was inclined to blame problems on a "mischievous" press.

The ministerial removals were criticized on August 13 by centrist politician and Expediency Council member Mohammad Hashemi. Hashemi said that it was illogical to disrupt the public administration and undermine two key economic ministries halfway through the presidential term (2005-09). He warned that cabinet-level changes could destabilize the ministries, prompting job-security concerns among ministry staff members. Given the criticism, it is notable that Hashemi -- a brother of Expediency Council Chairman Akbar Hashemi-Rafsanjani -- used to run state television and radio.

Broader Presidential Agenda

President Ahmadinejad has made no secret of his desire for a number of changes in the government structure. He has effectively abolished the state budgeting and economic planning body, and merged it with the presidency. He has also called for changes in the banking system, and recently fixed interest rates against the advice of bankers and economic bodies like the Money and Credit Council. His finance minister (Davud Danesh-Jafari) has stated the government's intention to merge numerous state councils and committees -- like the Money and Credit Council -- into four or five councils. Alireza Tahmasebi had dismissed as rumor reports of a planned merger of the Trade and Industry ministries ("Hamshahri" reported on August 7). The aim of such changes is ostensibly to make the state economic and decision-making apparatus a more malleable -- and more efficient -- instrument in the hands of an executive branch that is determined to control key aspects of the economy in order to serve certain social and political goals.

The administration's envisaged changes might come to affect other ministries. President Ahmadinejad recently (August 12) told officials in Tehran that the Foreign Ministry requires a different structure to better serve key foreign policy principles. Ahmadinejad couched the change in a broader effort to "change in step with [Iran's] global responsibility." He said that goal included the spread of what he described as justice and "kindness" around the world, and changing "the structure of international relations in the interests of nations" ("Hamshahri" reported on August 13).

Ahmadinejad has repeatedly demonstrated that he does not avoid radical moves out of any fear of subsequent criticism. The daily "Aftab-i Yazd" has pointed out in several recent editorials that parliament has frequently criticized the president but -- in the end -- voted for many or most of his initiatives. So Ahmadinejad might have come to see such criticism for what it is: talk.

He might thus proceed with further changes and reappointments intended to empower his radical government.

Copyright (c) 2007. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036. www.rferl.org