Raisi Loses a Minister Less Than a Year into His Term

Iran’s Labor minister is forced to resign as the first victim of political rivalries and economic reforms.

Hardly 10 months into the start of its work, the cabinet of Iranian President Ebrahim Raisi saw its first dropout, when the minister of Cooperatives, Labor and Social Welfare, Hojjatollah Abdolmaleki, resigned on June 14.

On his Twitter account, 41-year-old Abdolmaleki -one of the youngest ministers in Raisi's cabinet- wrote, “he is leaving in a move to boost coordination within the government”.

The word “coordination” and the fact that Raisi immediately appointed a deputy to Vice President Mohammad Mokhber as caretaker Labor minister pointed the finger of blame at Mokhber. Some observers said Abdolmaleki didn’t get on well with the vice president who is known as “the commander of the cabinet’s economic circle,” and that led to his fall. 

Of note, this is the second time a member of the government leaves it due to alleged differences with Mokhber. In late April, Raisi’s aide for economic affairs and former presidential candidate, Mohsen Rezaei, was told not to attend the sessions of the government’s economic commission anymore.

But Abdolmaleki’s resignation, which is said to be his second, is somehow related to more profound issues rather than non-coordination with Vice President Mokhber.

A Wealthy Ministry Under Laborer Name

The Ministry of Cooperatives, Labor and Social Welfare is one of the richest ministries in the Iranian administration. With thousands of employees and hundreds of executives, the ministry owns numerous holdings in banking, transportation, energy and mining sectors. It also manages several wealthy pensioner funds. All these companies and firms generate massive revenues. That’s why taking these holdings and their mother firm, the Social Security Investment Company (SSIC or in Persian SHASTA) in hand, is a real competition among the political factions who take power in Iran. 

Hojjatollah Abdolmaleki had several factors making him eligible for the position he’s just stepped down. He studied at the Imam Sadeq University, where many of the new government’s officials and managers graduated and holds a Ph.D. degree in Economics. He also served on the Board of Trustees of the Imam Khomeini Relief Foundation, a wealthy charity organization that is only responsive to the office of the Supreme Leader Ayatollah Ali Khamenei. 

In addition, Abolmaleki is a close ally to Sadegh Mahsouli. The latter is a wealthy businessman and former Interior Minister under President Mahmoud Ahmadinejad. Mahsouli is known as the god-father and financier of the Conservative party, the Steadfast Front (or Jebhe-ye Paydari).

“The Steadfast Front of the Islamic Republic” is an ultra-Conservative political party that emerged as the result of a deep rift in the Iranian Conservative factions. It was formed by a number of lawmakers in 2009 who supported then-President Ahmadinejad in his disputes with other Conservative groups, specially then Parliament Speaker Ali Larijani.

The spiritual leader of this group was Shi'a cleric and scholar Ayatollah Mohammad-Taghi Mesbah Yazdi (1935-2021). The group parted its way from Ahmadinejad and officially established a party in 2011. Jebhe-ye Paydari has always tried to remain loyal to the causes of the Islamic Republic of Iran but keeps its distance from other Conservatives over their political differences. 

Although Jebhe-ye Paydari is one of the pillars of the Raisi administration, it is a powerful rival that seeks its own agenda. That’s why sometimes the party is at odds with the government’s policies in foreign affairs and the economy. Members of the Jebhe-ye Paydari are known to be fierce critics of the 2015 Nuclear Deal between Iran and the six world powers known as the Joint Comprehensive Plan of Action. To this date, they’ve opposed the Vienna talks to revive the JCPOA. Against this political backdrop, lay Abdolmaleki’s job performance that seemingly enraged many, from employers and pensioners to his boss, President Raisi.

In an interview in February, the former minister said he’d replaced 350 out of 1,000 inefficient managers and executives from a vast network of the ministry’s holdings. He promised more would be fired in the coming months.

The implications of removing all those managers who each and everyone is related to one faction would be great if we know that Abdolmaleki’s predecessors were both from the Intelligence Ministry. Therefore, we can assume many of those sacked from their positions had links with the intelligence apparatus one way or another.

With Raisi’s economic team deciding to cut subsidies, the government paid for imports of the basic commodities and instead of paying cash to households, another problem emerged. Critics accused the Labor Minister of poor classification of the population who must be paid. It created discontent among people who thought they deserved to receive cash payments, while the ministry had delisted them.

Nevertheless, the last straw that broke the camel’s back was a 57.4-percent rise in minimum wages, a decision that was made at the Supreme Labor Council -an arm of the Labor Ministry- and announced by Abdolmaleki. The already cash-strapped government that had realized the financial burden of that decision exempted civil servants from the law, stating they will receive the 10-percent annual pay-raise, which is the case for millions of laborers and pensioners. In reaction, pensioners and employees of organizations such as municipalities took to the streets, demanding a full raise. Thus, these protests became a new headache for the government and the parliament. Dissatisfied with this matter and worried about the high cost of living intertwined with high inflation and daily protest gatherings, the Majlis asked the government to draft a bill for the pay-raise and to keep the added sums between 10 to 20 percent.

According to a report, after consultations with Vice President Mokhber and the “security apparatus”, President Raisi eventually asked Abdolmaleki to resign.

The government also made it clear that it will raise pensioners, laborers and civil servants’ pay by 10 percent and only those who get the minimum wage will attain the 57-percent rise.

With Abdolmaleki's gone, the Majlis set its eyes on several other ministers, including Agriculture and Health Ministers as well as minister of Industry, Mine and Trade, Reza Fatemi-Amin and minister of Economic Affairs and Finance, Ehsan Khandouzi which, the latter is a graduate from the Imam Sadeq University, too.

The situation for Fatemi-Amin looks to be a bit different; he was one of the executives who left the Astan-e Quds to join Raisi's government. It is worth mentioning that Astan-e Quds-e Razavi is an empire that administers the shrine of the eighth Shia Imam, Ali ibn Musa al-Riza, in Mashhad. Ebrahim Raisi was the chairman of the Astan-e Quds from 2016 to 2017 and Fatemi-Amin was one of his aides.

Many -though humorously- say Fatemi-Amin isn’t an easy bite to swallow for the lawmakers because he is the only minister Raisi chose on his own, implying that the rest of his ministers were the shares of his political rivals-turned-allies. Insisting on its position, the Iranian parliament has just kicked off Fatemi-Amin’s impeachment process to the dismay of the government, which accuses the lawmakers of politicizing this impeachment.