Iranian Parliament Approves Budget Bill With Huge Deficit
The Iranian parliament has approved the outlines of the budget bill for the next Iranian year – starting March 21 -- without considering its unrealistic assumptions.
The Iranian parliament has approved the outlines of the budget bill for the next Iranian year – starting March 21 -- without considering its unrealistic assumptions.
President Ebrahim Raisi Sunday defended the bill at the parliament by a rhetorical statement, "The strategy of the enemy is to create despair, while the strategy of the government and the parliament should be to create hope in the hearts of the people." The deficit in the current budget that the government admits is about 4,760 trillion rials – more than ten billion dollars. But the real deficit will be perhaps twice as much, with rosy estimates of oil sales and staggering tax collection.
As the bill was being approved, the Iranian currency rial hit a new historic low, dropping to 455,000 against the US dollar. But that did not deter Raisi from claiming that Iran is witnessing “a very bright future,” citing data supposedly indicating that the country’s economy grew in the past year.
He claimed that "this year the country is witnessing an economic growth of four percent," adding that "a million jobs have been created in the country." When he presented the outlines of the budget, he had claimed that economic growth in this budget would be eight percent.
According to an International Monetary Fund report, economic growth will decrease from four percent in the previous Iranian year to three percent in the current year and two percent in the next year. That is still an estimate based on figures mainly supplied by the Iranian government.
Meanwhile, Gholamhossein Shafei, the head of Iran's Chamber of Commerce, said last year that the country's economic growth has been zero in the past 10 years.
The budget bill that was submitted to parliament more than a month late, places its hope on exporting 1.4 million barrels of oil per day, a lofty goal given that US sanctions are in place and Tehran is exporting less than a million barrels under current conditions. The budget also estimates that each barrel of oil can be sold at $85, while that is the highest price in global market, but Iran has to give steep discounts to ship illicit cargoes to its main buyer, China.
The total tax revenues planned in the draft budget will surpass $20 billion based on the current rate of exchange. In Iranian currency, however, this is a staggering 8.3 quadrillion rials – that is with 15 zeros.
Despite the huge tax bill for the people, the government budget will still have a 50-percent deficit, due to a chaotic downturn in the economy mainly triggered by US sanctions on its oil exports and international banking.
The 59-percent jump in planned tax collection means that taxpayers have to pay at least 10 percent more than the estimated 50-percent annual inflation rate.
The Raisi administration started with a rate of exchange for US dollars of 250,000 rials which has so far risen to over 450,000 rials.
Inflation in the country has soared to over 50%, the highest level in decades. Youth unemployment remains high with over 50% of Iranians being pushed below the poverty line, according to reports by Iran's Statistical Center.
The Iranian currency rial has lost its value by more than elevenfold in five years, making imports of food and other essential necessities equally expensive for consumers.
“I’m extending my hand, once again, for cooperation to all pro-democracy forces, including individuals, parties and groups, to support the Iranian national revolution on the basis of three minimum common principles: Iran's territorial integrity, human rights-based secular democracy, and people’s right to determine the form of the [future] political system through a free vote,” he said in a statement published via his social media accounts Saturday.
The statement came after a petition endorsing him as representative of his supporters to lead a transition from the Islamic Republic to secular rule launched Tuesday by actor Ehsan Karami received over 300,000 signatures by Saturday. “This petition helps the people of Iran to express their opinion,” Karami said.
One of the first to support the campaign was expatriate Iranian football star Ali Karimi, a key supporter of the popular uprising, who has millions of followers on Instagram and Twitter. The number of signatures has now risen to over 350,000 on Sunday.
Karami said he had launched the petition because the exiled crown prince had in an interview with London-based Manoto TV asked the people of Iran to give him power of attorney to lead the movement against the Islamic Republic.
In response to a question why he was not openly accepting the leadership of the movement, Pahlavi said any kind of work, presumably lobbying with world powers and international organizations, required “a legitimate basis or some kind of power of attorney from inside Iran."
Signatories of the petition include several celebrities but so far Karimi is the only high-profile expatriate opposition figure recognized as one of the likely members of a future transitory council to have signed the petition and campaigned for it.
Other known figures representing the protest movement, including actress and human rights activist Nazanin Bonyadi, journalist and activist Masih Alinejad, actress Golshifteh Farahani, activist Hamed Esmaeilion, and Nobel Peace Laureate Shirin Ebadi have so far neither endorsed nor rejected the plea.
Some regime opponents imprisoned in Iran, including Manouchehr Bakhtiari have endorsed him. Bakhtiari is an ardent believer in reviving the monarchy. He is jailed for his anti-regime activism after his 23-year-old son Pouya was shot in the head during the November 2019 protests in Karaj.
The petition has given rise to intense arguments on social media with those in favor tweeting with the hashtag “I endorse power of attorney” and others using the hashtag “I do not endorse power of attorney”. The exiled prince is currently among the top ten Persian-language hashtags on Twitter now.
In recent years, the former crown prince has not laid claim to the throne, and at least on one occasion said his own desirable government would be a republic rather than a monarchy, but many of his supporters, who always refer to him affectionately as ‘The Prince’ see him as the future king of the country.
“Based on the Iranian Constitution [of 1906], Prince Reza Pahlavi is the heir to the Iranian throne. There’s no plan for him to establish a government … This [power of attorney] is giving him permission to meet political representatives and officials of other governments,” Kamelia Entekhabifard, chief editor of the Persian website of The Independent, told the BBC’s Persian television Wednesday.
Entekhabifard argued that giving such power of attorney to the exiled crown prince would prevent others without proper credentials, a clear past, and well-defined demands to meet with foreign officials.
“At least the Prince is emphasizing the principles of territorial integrity of the country, freedom of religion, equal rights for all Iranians,” she said while stressing that Pahlavi has always emphasized it is the Iranian people who should decide their future form of government through free elections.
Others -- notably some republicans and leftist politicians and activists – reject giving power of attorney to the exiled crown prince while even some of his supporters say empowering one person is undemocratic and would pave the way for future troubles.
In their view, only a council consisting of prominent political figures and activists can be a true representative of the Iranian people in any talks over the future of the Islamic Republic with world powers.
“I endorse power of attorney”, the Marxist Iran Left Party (Fadaiyan-e Khlagh) said in a statement Saturday, “is undemocratic both is form and content” and argued that appointing the exiled crown prince as Iranians’ representative, without setting any conditions, is similar to the yes-no referendum in 1979 that determined Iran's form of government as an Islamic Republic and disregards the “political and civil society in the country”.
Proponents of endorsing the exiled prince as a representative say those who do not want him can propose their own candidates, but the revolution needs leadership.
In an interview with reformist daily Etemad, centrist academic Sadegh Zibakalam also warned the government about its annoying treatment of women and young Iranians. It would be wrong to go back to repressive policies the government followed prior to the death in custody of Mahsa Amini, which led to the country's biggest uprising since mid-September.
Zibakalam added that some Iranian officials deny the crisis in Iran and believe that protests were created by foreigners, but it is over now. However, he warned that the reasons for the uprising are still there, and future protests could be even more widespread.
The outspoken pundit said if there is no change in Iran and the government continues its repressive policies, there are reasons to be worried about the future of the regime. The people's demand for regime change is an outcome of disillusionment and despair and lack of hope in reforms, he argued.
After four months of unrest, protesters are more determined that the clerical regime should go and a secular, democratic political system must replace it.
Zibakalam said that university students were the driving force behind the protests. It looks like there is a slowdown in protests only because the universities are currently closed for exams and because because of enormous government pressure. But this does not mean the protests have receded.
The academic said that during the past 43 years, the student Basij was created to stop Iran's student movement, but not only the Basij has not been successful, the student movement has gained more power and momentum year after year.
Criticizing the consolidation of conservative's control over Iran in the 2021 presidential election by barring others from running, Zibakalam said you cannot control 80 million Iranians by one or two million radical revolutionaries.
Meanwhile, reformist lawmaker Massoud Pezeshkian criticized his colleagues at the Iranian Parliament (Majles) for chanting slogans such as death to this or that country instead of trying to correct the state of affairs in Iran. "We need to tolerate others and work and collaborate with the world," he said adding that "we need to create solidarity inside Iran."
"When you say death to this or that country, they will also say death to you," Pezeshkian quipped.
Referring to some officials' radical threats against other nations during the past week, the lawmaker from Tabriz, criticized the government for doing away with experts in the government and giving big jobs to incapable people with no experience or knowledge. The failure of government policies is the outcome of our choice of managers and officials, he said.
Pezeshkian then asked whether the government can replace some officials and appoint new ones. "This cannot be done. This government is basically incapable of solving the country's current problems," he said.
Levelling similar accusations against the government, conservative politician Hedayatollah Khademi told Nameh News that President Ebrahim Raisi needs to replace some of his ministers in order to save himself. "There is no reason for him to continue working with these inefficient individuals who are the subject of many jokes among citizens. All cabinet members must be changed," he said, adding that "Iran is the only country in the world whose foreign minister and nuclear negotiators cannot speak English."
Khademi also criticized the parliament for failing to supervise the government's performance. He charged that most lawmakers are currently working on their re-election or if they have no hope, they are appeasing the government to make sure that they will get a job after they finish their term in the parliament.
Jahanabadi further charged that Iranian officials do not believe in governance as an expertise and try to “re-invent the wheel” instead of learning from 200 other countries.
"Iranian politicians are constantly reinventing the wheel. They never ask themselves how their counterparts in 200 other countries treat and manage their national currencies and foreign exchanges. They do not believe in banking as a knowledge-based practice and an expertise. With all that I wonder why we are so complacent and always believe that we can correct the world," the lawmaker said.
He drew attention to the fact that officials during the past weeks claimed that the fall in the value of Iran’s currency was the outcome of the protests. But they never ask themselves why it keeps falling even when the streets are calmer.
Jahanabadi explained that when society is volatile, some people tend to invest in real estate in other countries. This has happened during the protests in 2017-2019. In 2022, a lot of capital left Iran for purchasing properties in Armenia, Georgia, Turkey and the United Arab Emirates.
Furthermore, at times of unrest, many shift their capital to gold and foreign currencies to prevent the devaluation of their assets. Iran’s rial has fallen more sharply and is more vulnerable than even in Iraq and Afghanistan.
Jahanabadi maintained that almost everyone knows that “our political, economic, foreign and cultural policies need reform, but no one knows who should start that reform.” However, he added: "As one of 290 Iranian lawmakers, I think this country needs essential reforms. We need to change the structures, methods, views and policies." He added that as a result of the current situation buying a house, a car and finding a job have been turned into a dream for many young Iranians. Why shouldn't they be depressed and desperate?"
Meanwhile, reformist politician Hassan Rasouli has said in an interview that Iranians' demands are miles apart from views held by officials. Top officials regularly make many false claims. He argued that the political system’s main responsibility is to be responsive to the wishes of the people and this requires comprehensive, long-term and realistic plans.
Rasouli added that the current situation leaves no hope of improvement. Problems in Iran's domestic politics have left no international respect for Iran.
He was probably referring to the government's violent and ruthless reaction to recent protests in Iran and its ignorance of challenges in the international arena. What the officials have been doing in this regard so far, Rasouli said, has been nothing other than simply ignoring or denying problems, while inefficiency is visible in all economic, security, cultural and social matters.
On Thursday, economist Bahman Arman had said that decisions in the government are affected by the influence of a group that is against development and progress. He was probably referring to the intervention of ultraconservative figures, mainly the members of Paydari Party in the affairs of the government, and individuals like former nuclear negotiator Saeed Jalili who offer suggestions to the Raisi Administration on many matters including the nuclear issue without being accountable for the consequences of their intervention.
Like Rasouli, Arman also said that the government does not have an intelligent roadmap and as a result makes too many errors without trying to compensate for them later. As a result, said Rasouli, divides between the people and the government are likely to further widen and Iran's vanishing middle class is likely to be turned into a needy class, although government officials will probably continue to brag about a "progress" that as they claim makes Iran's enemies jealous.