Home News Economy Unmasking the Looting: The Impact of Resource Depletion on the Iranian People

Unmasking the Looting: The Impact of Resource Depletion on the Iranian People

It is alleged that within the regime led by the mullahs, funds such as the national development fund are regarded as personal piggy banks, exclusively controlled by the regime's leaders and the Revolutionary Guards.

On May 12, Mehdi Ghazanfari, Chairman of the Board of Directors of the National Development Fund of Iran, revealed a concerning update regarding Iran’s National Development Fund. Out of the initial $150 billion, a mere $10 billion remains intact.

Following a decline in oil prices, the establishment of Iran’s national development fund aimed to transform a portion of the revenue generated from oil and oil derivatives into substantial capital. This strategy sought to create productive wealth, ensuring the availability of essential resources for the country’s economic growth while also serving as a significant storage of financial reserves for future generations. By capitalizing on this fund, Iran sought to secure a prosperous future and fortify its economy against potential challenges.

It is alleged that within the regime led by the mullahs, funds such as the national development fund are regarded as personal piggy banks, exclusively controlled by the regime’s leaders and the Revolutionary Guards.

These funds are purportedly exploited to unlawfully extract wealth from the people and serve the personal interests of those in power. Regime officials are misusing the resources, diverting them away from the intended purpose of benefiting the nation’s economy and future generations. And of course, it is unclear how this money is used, who has access to this fund, and why.

In a statement quoted by the state-run daily Donya-e Eghtesad, the head of the regime’s National Audit Office emphasized the need for caution, urging against allowing the National Development Fund to suffer a fate similar to that of a currency reserve account.

According to research conducted by experts within the regime, an analysis of the foreign exchange reserve account reveals its ineffectiveness in guarding against the impact of financial expansionary shocks. Furthermore, the approvals granted through this account have shown limited contribution towards fostering growth in private sector investments related to production.

Additionally, these approvals have played a minor role in both policy implementation and adherence to the provisions outlined in the third plan law. These findings shed light on the underwhelming performance of the foreign exchange reserve account and call for a reevaluation of its effectiveness in meeting the intended goals.

It should be noted that the mastermind of the creation of this fund is regime supreme leader Ali Khamenei, who himself has accumulated the country’s wealth in private organizations he and his son Mojtaba control.

Donya-e Eghtesad wrote: “As part of the general policies of the fifth plan, the Supreme Leader introduced a strategic shift in the approach towards oil and gas revenues. Rather than solely serving as a source of funding for the government’s general budget, the aim was to transform these resources into ‘economic generating resources and capital.’

“This transformation was realized through the establishment of the National Development Fund. By redirecting the focus towards utilizing oil and gas revenues for economic growth and capital generation, this initiative sought to enhance the long-term sustainability and development of the nation’s economy.”

Iran’s national fund, originally amounting to $150 billion, has experienced significant withdrawals under previous governments, amounting to approximately $100 billion. Additionally, a considerable portion, approximately $40 billion, has been allocated to various facilities and investments. Consequently, only $10 billion remains in the fund. In comparison, it is noteworthy that Norway possesses a substantially larger fund, with approximately $1.9 trillion. Similarly, other countries like Saudi Arabia, Qatar, and the UAE have observed comparable trends in their foreign exchange assets.

Within the regime, a significant portion of the annual budget, at least 65%, relies on oil revenues. However, despite this substantial contribution, the budget deficit remains alarmingly high, and the shortfall is not adequately addressed by these revenues alone.

As a result, the regime resorts to alternative measures such as inflation, imposing high prices, taxes, and other means to extract additional resources from the people. And finally, if these resources do not compensate for the country’s budget deficit the regime loots the national funds.

The state-run website Ta’adol wrote: “In fact, the nation not only does not benefit from oil revenues but because of the wrong economic structure, they are forced to spend out of their pocket so that the government can cover its current expenses. The continuation of this trend will undoubtedly lead to bankruptcy and crisis in Iran’s economy.”

Finally, Ghazanfari warned: “The continued depletion of resources within the fund poses a grave concern, as it threatens the complete exhaustion of its reserves. Should this trend persist, there is a real risk that future generations will inherit a fund that has been entirely depleted, leaving them with virtually no resources to rely on.”

Exit mobile version