Iran: The Hidden Part of the 2020–2021 Budget

When we examine what other Iranian outlets and experts working with Iran have to say about the budget bill, we see that it is criticized for a lack of transparency

The budget deficit was set as the main reason for the gasoline price increase. Now, with the budget scrutiny, it is clear that many of the national and public wealth and funds are also looted.

The Iranian government replenishes some of his budget by increasing prices and rationing the gasoline. With a 300 percent increase in gasoline prices as well as rationing, it is expected to significantly reduce the use of gasoline about 103 million liters daily. The government will export this reduced rate at 58 cents. In other words, each liter of gasoline will be sold for more than 6,000 tomans. This will also cover a significant portion of the government’s budget deficit.

Gasoline exports have begun since the summer of 2018. No sanctions on gasoline, unlike oil, can be said to be one of the main reasons for the rise in gasoline prices, while the government officials have not mentioned this.

As the oil sanctions pressure mounted on the government, the government raised the price of gasoline in a maneuver and rationed it to cover a significant portion of the budget deficit through the sale of gasoline.

But rising gas prices domestically and exporting it is not the only source of funding for the 2020 budget deficit. In addition to these two sources, the government has earmarked other budget deficits.

Taking 3 trillion from National Development Fund resources

In the budget bill of 2020 it is stipulated, that 3 trillion tomans should be taken from the National Development Fund resources for the current expenditures. Taking from the Development Fund means taking from future generations of a country that has been auctioned in the budget bill.

Sale of 80 trillion of debt securities

Another provision to finance the budget deficit in 2020 is the sale of bonds. This causes sudden inflation. Another concept that results from the sale of debt securities is the postpone of government’s debt to next governments and accumulating it.

Sale of movable and immovable property

Another issue is the sale of movable and immovable property by the Rouhani government. These include buildings and facilities, lands, machinery and equipment, barracks, corporate houses, nomadic lands, prisons, forage depots, and resources from the completion of semi-finished projects.

In addition, the most significant sign in this looting policy is the multiplier increase of these subjects in the budget of 2020. In previous years, this issue was included in the budget bill, but it was very small and included some unnecessary assets. But in the budget of 2020, this subject has increased by 1000% compared to the recent year and will amount 50 billion tomans.

9.545 trillion tomans will be derived from the sale of buildings, machinery and land, and in addition 4 trillion tomans will be derived from the sale of property which has been referred as “surplus” property.

The first budget bill after Hassan Rouhani took over as President, the budget of 2014, determined that the government would allocate 1080 billion tomans from the sale of movable and immovable property to finance part of its budget deficit. Now, after six years, for the budget of 2020, the government wants to increase the income from this place to 5000% compared to 2011.

The increase is so large that the government’s share from the sales of movable and immovable properties is 2 percent higher than the government’s oil revenues in 2020, and 19 percent of Rouhani’s government revenues.

The sale of movable and immovable property has “no formalities”

In the 2020 budget bill, however, is expected that about 50 trillion tomans of movable and immovable property will be sold, while it stresses that the sale will be “without formalities”.

According to the rules of the Iranian government, these “formalities” relate to the approval of the Cabinet of Ministers referred to in Article 115 of the country’s General Accounting Law.

This article reads as follows: “The sale of immovable property by ministries and government agencies that are identified as surplus on demand, with the exception of the following immovable property:

1. Immovable property of the nation.

2. Military installations and fortifications and weapons and ammunition factories

3. Monuments

4. Immovable property which is in the relation of the national interest and in the possession of the State, are forbidden to sale.

Upon the suggestion of the Minister concerned and the  approval by the Cabinet, and the observance of other regulations concerned, the proceeds of the sale of such property shall be deposited into the public revenue account of the country.

But in the 2020 Budget Bill, the government has abandoned all these rules and formalities and has formally stated in the Budget Bill that the sale of this movable and immovable property will be “without formalities”.

Perhaps by looking at the conceding of fishing in the southern seas to China, the transfer of an amount of the Caspian Sea to the northern states of the sea, the Rouhani administration is repeating the shameless Turkmanchai contract, thus one can understand why the term “no formalities” is included in the budget bill.

All of this will be also approved by the parliament and will adopt a legal face so that no one can complain about it.