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Iran’s 2021-22 Budget Based on Imagination

Iranian officials have closed their next-year budget on 2.3 million BPD oil revenues while they would not be able to sell over 300,000 BPD.
Iranian officials have closed their next-year budget on 2.3 million BPD oil revenues while they would not be able to sell over 300,000 BPD.

The parliamentary adviser to Iranian President Hassan Rouhani, Hossein Ali Amiri, presented the 2021-22 budget bill to Parliament (Majlis) last week. However, the state-run media outlets and some officials are pointing out major flaws, especially regarding the budget deficit.

Why? Well, the 2021-22 budget bill relies on a 47 percent growth in government revenues and public expenditures upon the 2020-21 budget of $22 billion. Last December, the state-run Mashreq News website described it as “an imaginary budget bill” because it was based on the export of one million barrels of oil per day (BPD). Notably, Tehran’s oil exports were dropped to around 70,000 BPD in April, according to Kpler, which tracks the flows.

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This bill is based on oil exports of 2.3 million BPD at $40 per barrel, which is insane because sanctions, Iran’s damaged oil industry’s infrastructure, and the regime’s institutionalized corruption, have limited sales to a mere 300,000 BPD.

Nowhere in the bill does it say how the other 2 million BPD will be sold, but state media said that 900,000 will be sold to the people, which is a way to extort them!

“[The] budget deficit means government revenue and expenditures do not read together,” said the Majlis Speaker Mohammad Bagher Ghalibaf on December 3.

He said that oil exports and saving bonds were “not stable sources of income” and called on the Hassan Rouhani administration to be “realistic”. He described this bill as “relying on nothing”, while other regime officials said that the fall of the mullahs’ regime was an “endless degradation.”

Despite a major loss in income and no solution in sight, the regime has seen fit to increase military spending by 11 percent to $4.67 billion. On the other hand, at a time when poverty and the coronavirus (COVID-19) are killing thousands of Iranians each day, Iranian officials yet refrain to allocate the major share to health apparatuses.

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Increases need to be made in healthcare or job-creating sectors, like construction. The suppression of the people and foreign warfare should not be what the regime is focusing on, not least because playing by the rules of a democratic nation and ending the regime’s suicidal nuclear and missile programs are the best chance that the regime has for convincing the incoming U.S. administration to lift the oil sanctions against them.

“While the harsh economic situation is putting immense pressure on the impoverished Iranian society, the regime’s main concern is its security. The mullahs are deeply concerned that tough economic circumstances will further feed into widespread protests,” the Iranian opposition National Council of Resistance of Iran (NCRI) wrote.