Iran Economy NewsBudget Deficit and Khamenei’s Fear of Collapse

Budget Deficit and Khamenei’s Fear of Collapse

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In a meeting with the Iranian regime’s parliament members, supreme leader Ali Khamenei suggested some actions to improve the country’s economy, as though Iran’s economy is normal, and everything is on the right track. In reality, the economy is in pieces and the regime is facing a huge budget deficit.

According to the state-run media, Khamenei claimed, “The composition of the budget is still not corrected, while the government is the one that has been addressed.”

The question that remains is whether the regime knows that there are many errors in the regime’s budget and why have they neglected to correct the mistake.

The answer is very simple. They are fully aware of the situation, but they are no longer able to correct the budget because of the corruption and theft that has engulfed all parts of the ruling system.

On December 22, 2021, the state-run daily Afkar News wrote, “The 2022 budget was presented without much change in the budgeting system and like previous years. This is a budget that has fundamentally major drawbacks and is not compatible with upstream laws.”

The budget is based on the export of oil and gas, and any shortage is compensated for by borrowing from the central bank and the fiat money.

In the budget of 2022, it was discovered that more than half of the budget had a deficit, with the general budget deficit amounting to close to 300 trillion rials, which was supposed to be supplemented y revenues from the sale of oil and the sale of government bonds and companies.

At the time, Khamenei warned the regime’s parliament that they should not increase the budget deficit by increasing expenditures, for which there is no revenue.

However, in the case of wasteful expenses, there are many examples in which the traces of Khamenei and the Iranian parliament are obvious.

Hassan Khoshpour, the former senior director of the Planning and Budget Organization, said, “The conduct of the 2022 Budget Consolidation Commission made it clear that not only it is futile to expect efficiency when the legislature and the executive branch are unified, but the budgeting process is merely a list of expenditures (mostly current expenditures) with no long-term development perspective, regardless of the possibility of their realization.”

It has recently become clear that the regime gave hollow promises in the budget circular, and that there is no programmed budget. Under the supervision of Khamenei’s office, the budget program has been converted into a traditional budget program that fails to support any progression and the country’s primary necessities and instead is giving free rein to the officials to partake in even more corruption.

An example of this is the decision of the regime’s Parliamentary Integration Commission, which increased housing and marriage deposit loans and allocated resources for the housing sector amounting to 440 trillion rials. It also compelled banks to provide resources amounting to 200 trillion rials for employment and implemented inefficient and harmful programs.

These actions were carried out with Khamenei’s full knowledge and coordinated with the government and the parliament. The growth of liquidity and inflation by such harmful programs, which has now increased to between 40 and 50 percent, is crushing the Iranian people. This is the real reason for the increase in more and people suffering from starvation.

From the very first days of the 2022 budget discussion, it was stated many times that one of the major parts of the budget expenditure, ‘ whose the bitter fruits the poor have tasted’, is the unaccounted money that has been flowing into the regime officials’ pockets in the name of cultural institutions. Yet, Khamenei orders the parliament not to approve unaccounted expenses!

The official news agency, IRNA, showed the reality of the situation. “At first glance, it seems that dozens of cultural institutions have been excluded from receiving the budget, while an inquiry from the Program and Budget Organization showed that there has been no change in the total number of institutions receiving the cultural budget and all cultural institutions have been merged into 10 main institutions. In fact, it is a budget that should be divided between these institutions and many other institutions whose names are not mentioned in the bill,” it wrote.

A recent analysis has shown that the budget of the seminary service center has increased by 100% compared to last year.

The state-run daily Tejart News wrote, “The budget of the seminary service center is 28 trillion rials. In 2021 it was 14 trillion rials. As stated in this bill, the budget share of the seminary service center is more than the Environmental Protection Organization.”

IRNA added, “The budget of the Environment Organization in the budget bill of 2022 is 21 trillion rials. Forty-three religious’ organizations in the budget of 2022 received 72.52 trillion rials, some of which received alone more than the budget of organizations such as the General Staff of the Crisis.”

Another example of this corruption belongs to one of the regime’s institutions, known as the Culture and Guidance of Qom. In talking about the regime’s support for the Institution, its director-general said, “In previous years, the concern of the Public Culture Council was that we need credit to support cultural activities. Fortunately, last year, a row under Table 17 was seen in the country’s budget to support cultural activities, and six trillion rials were distributed among cultural institutions. This year, 6.5 trillion rials have been allocated in the budget to support cultural activities.”

Why is Khamenei due to speak this month about the budget, when the regime is not due to draft a budget bill and review it in parliament?

It appears that after the many protests in recent weeks, due to high prices and starvation, Khamenei is keen to warn the officials to ‘steal’ less. Regardless of his intentions, it is far too late to attempt to rectify the situation as none of them can affect any changes.

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