Iran Economy NewsIran's 2021-22 Budget Bill, A Perfect View of Government's...

Iran’s 2021-22 Budget Bill, A Perfect View of Government’s Dilemmas and Crises

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Since December 2, when Hassan Rouhani’s administration submitted the 2021-22 budget bill to the Parliament (Majlis), there has not been a day without political rivalries about a strange amount of budget deficits and other dilemmas in Iran. In this context, MPs, officials, and even Rouhani’s allies admit that the government would face further economic obstacles in the upcoming year.

The Iranian authorities’ problem is rooted in a set of socioeconomic crises, corruption, and mismanagement seriously affecting the people’s livelihood, and it would ignite a new round of nationwide protests at every moment. Furthermore, citizens must deal with the novel coronavirus on the one hand, and on the other hand, they have to endure the coronavirus’s ominous consequences while the government has left them without support.

A Look at Iran’s 2020-2021 Budget

In this respect, the 2021-22 budget bill is a perfect view of all dilemmas that the government confronts. More importantly, this issue has been activated while authorities see no solution for the current crises and are challenged by unprecedented public hatred.

Therefore, officials are severely concerned about leaking the actual government’s expenditure and revenue despite all political rivalries. However, loyalists to the Supreme Leader Ali Khamenei, who have been convinced that they would form the next cabinet, do not want to endure the ends of Rouhani’s fake statistics and hollow figures.

In the 2021-22 budget bill, the Rouhani government did not consider the expenditure of purchasing the Covid-19 vaccine, according to MPs. Officials also did not care about over one million employees and workers who have lost their jobs due to the pandemic. Moreover, the bill has no article for paying arrears and delayed paychecks of selfless medical staff, let alone millions of employees, teachers, retirees, and public services workers.

The authorities’ cross-party concern is how to cover the predicted budget. In other words, neither MPs nor other officials do not actually mention people’s dilemmas and hardships during their speeches. For instance, former Islamic Revolutionary Guard Corps (IRGC) commander and the current Secretary of the Expediency Council Mohsen Rezaei said, “We still remain under sanctions until the next five years. How is it possible that we sell oil over 2 million barrels [per day (BPD)] during the next year?”

Iran’s Main Oil Company Owes $34-billion to the Banking System

Chief of the Majlis Research Center Alireza Zakani also highlighted the deficits. “The 2021-22 budget bill has exactly a 3.2 quadrillion rials [$12.307 billion] of deficits. This means the shaping of hyper-inflation. It means that we deposit meager money into people’s pockets, then withdraw tenfold of that from the people,” Zakani said.

“Economists believe that the next year’s budget bill without oil revenue and the Central Bank [of Iran (CBI)]’s loans are equivalent to 6 quadrillion rials [$23.077 billion] of deficits. This amount is 13 times the credit line of Mehr Housing projects or the people’s cash subsidies. The approval of [the 2021-22 budget dill] leads the country to hyperinflation in the next year,” Javan daily affiliated to the IRGC wrote on December 13.

The flagrant flaws of Rouhani’s budget bill even prompted his allies to express concern. “In the administration’s proposed budget bill to the Majlis, there is a focus on increasing current expenditures and relying on unreal and unachievable resources. As a result of the 60-percent increase in public expenditures and insignificant growth of incomes, the government proposed to cover 3.2 quadrillion rials [$12.307 billion] of its costs—including payments and pensions—through selling the estates and properties or loans,” wrote Jahan-e Sanat daily linked to Rouhani’s faction on December 13.

“Expert examinations show that due to unreal reliance on oil revenues, the government still lacks around 3.2 quadrillion rials [$12.307 billion] of deficits to cover its regular expenditures even if it could sell all bonds… This amount of deficit would increase liquidity and result in severe inflation in the upcoming years… Inflation imposes pressure on the impoverished classes of society more than others,” Jahan-e Sanat added.

On the other hand, in its December 13 edition, Hamdeli daily cited an expert’s remarks about social crises and warnings about possible upheavals on behalf of slum-dwellers due to falling below the poverty and absolute poverty lines. “Based on what rationale do we decrease the budget that was supposed to raise welfare indicators in slum-dwelling areas, while we realize that many of the post-revolution social unrest began from these districts? We know that social harms are tied with ‘society’s security,’” Hamdeli wrote.

Iran experts argue that Iranian officials only remember the people’s problems when they want to address potential protests, which can trigger the end of the Islamic Republic. However, their solutions are designated to nip protests in the bud, not focusing on how to resolve the people’s problems.

Tehran’s Desperation Against Economic Crisis

In reality, the government announces that it has cut all its relations with the people while it responds to social and economic grievances with lethal force and does not consider people’s dilemmas in the country’s annual budget bill. During the bloody suppression of November 2019, the people realized that under the rule of the ayatollahs and IRGC, they have no share of their homeland’s resources other than poverty and misery. And all indicators display that the army of hungry people, slum-dwellers, and abandoned and needy citizens await an opportunity to release their fury against the entire ruling system, as the Hamdeli author sounded the alarm bells.

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