On March 2, 2025, Iran’s parliament sacked Minister of Economy and Financial Affairs Abdolnasser Hemmati. His firing is emblematic of a major fissure in Iranian politics that many journalists and diplomats ignore. While Western officials obsess about the supposed competition between regime reformers and principlists (hardliners), the 1979 Islamic Revolution heralded the triumph not only of Islamism, but also of a socialist, command economy. Among the Revolution’s theocrats and social warriors, there were scattered pragmatists who favored a freer market-driven approach to economic stewardship. Hemmati’s association with this camp earned him significant enmity among the many Iranian officials who favor a welfare state, culminating in his impeachment.
[Abdolnasser] Hemmati’s firing after less than seven months shows economic pragmatists and political moderates have lost the argument.
Whereas in the West, impeachment requires a lengthy process, in the Islamic Republic it is a more straightforward process: Ten legislators can initiate the process, and then the parliament can impeach a cabinet member, including the president, through a simple majority vote. The minister must then appear at a hearing, after which there will be a vote of no confidence. This Hemmati lost, 182 to 89. Iran is not a true democracy, though. The supreme leader massages the process. For him, procedure and law are more suggestions than requirements. Hence, when 79 parliamentarians sought to impeach President Mahmoud Ahmadinejad in 2010, Khamenei called their effort “imprudent,” at which point they dropped the matter. That Khamenei, in contrast, allowed Hemmati’s impeachment to proceed is telling.
Hemmati rose in the ranks of the pragmatic Executives of Construction Party formed by the late President Ali Akbar Hashemi Rafsanjani to promote a moderate line on the reform-hardline spectrum while emphasizing economic competence. Hemmati’s firing after less than seven months shows economic pragmatists and political moderates have lost the argument.
Hemmati was an economic manager for his entire career and considered himself a technocrat. In 2021, he ran for president and campaigned on his economic bona fides. He promised he would improve Iran’s economy by “reducing foreign tensions.” He sought to boost foreign investments and reduce sanctions on oil exports to stabilize the economy; he promised to crack down on “sanctions profiteers.”
This may have gotten Hemmati into trouble. Ali Shamkhani, a former secretary of Iran’s Supreme National Security Council who is a confidant of Supreme Leader Ali Khamenei and his influential sons, has grown rich by profiting off sanctions. Other Islamic Revolutionary Guard Corps officials have also enriched themselves by helping evade U.S. sanctions. They act as middlemen, using dual citizenships in places like the Dominican Republic to create shell companies to channel Iranian oil and its profits.
As minister, Hemmati advocated for diplomatic negotiations to lift sanctions and suggested those who opposed him did so for their own personal enrichment. This turned two powerful overlapping groups against him: hardliners opposed to negotiations and sanction profiteers.
Iranian hardliners do not revert to the “resistance economy” for its own sake; it usually presages an effort to defy the world.
The sacking highlights a change of direction in the regime’s foreign policy. Whereas President Masoud Pezeshkian ascended to the presidency as a reformist ready to make amends with the United States to get sanctions lifted, the return of Donald Trump to the White House means that the Islamic Republic now prepares for the return of “maximum pressure.” Gone are efforts to improve prosperity; back in fashion is the “resistance economy,” which emphasizes patriot austerity and domestic production of foodstuffs and military goods.
The signs of austerity ironically became the excuse to sack Hemmati. The Iranian rial has lost one-third of its value relative to the U.S. dollar since Trump’s victory. Both private-sector traders and the government horde dollars to hedge against new sanctions. The energy shortfall means not only frequent blackouts, but also routine closures of schools and government offices. Tehran schools closed 50 days over the last 100, for example.
Hemmati is not the only supposed pragmatist under fire. On March 3, 2025, Iran’s chief justice reportedly demanded that Mohammad Javad Zarif, a former foreign minister who currently serves as assistant to the president, resign. He did.
Zarif’s advocacy for negotiations with the United States for a new nuclear agreement earned him the ire of hardliners. Pezeshkian rejected an earlier Zarif offer to resign; this time, he apparently stayed aloof. Khamenei appears angry at the reimposition of “maximum pressure.” Zarif is now the fall guy.
Iranian hardliners do not revert to the “resistance economy” for its own sake; it usually presages an effort to defy the world. In this case, expect Iran to accelerate its nuclear weaponization process. Khamenei believes he is paying the price, so he might as well get the goods.
The Pezeshkian administration may continue diplomatic outreach; they may even be sincere, though they are also powerless. Rather than deal, it now appears Khamenei only allows diplomacy in the hope it will delay a military attack long enough for Iran to complete its nuclear project.
