Mohammad Ali Najafi, a Reformist politician and economic adviser to Rouhani, has publicly noted that the parliament and many senior officials still have deep concerns about a rise in prices. Indeed, public opinion favors populist politicians who voice support for the suppression of prices, regardless of the realities on the ground.
Najafi believes the liberalization of prices should be gradual. His thoughts are shared by Yahya Al-e Eshaq, former president of Tehran’s Chamber of Commerce, who believes any sudden hike in the prices of goods and services could deepen the ongoing recession, as the market is not yet fully competitive.
The need to develop genuine competition has also been underscored by Farshad Fatemi, dean of the School of Economics at Sharif University of Technology. If competition improves and the monetary regulator acts promptly to control the money supply, the economy will be more efficient and prices will increase moderately, Fatemi said.
More broadly, observers wonder how the Rouhani administration — which is composed of experienced technocrats and a big fan of an open market economy — has been unable to make a considerable change in the Iranian economy’s architecture. In response to these observers, Saeed Leilaz, a Reformist political economist, argued that the administration has had to deal with influential politicians who have turned to the media in the past two years to oppose price increases and question every single policy of Rouhani’s economic team. Yet given the ongoing pressures, the administration has been relatively successful in improving the business environment and liberalizing prices, Leilaz said.