728 x 90

Iran’s proposed 2021 budget is weighing on thin ice

The regime faces an enormous budget deficit and the new 2021 proposed budget bill is described as unrealistic by many officials.
The regime faces an enormous budget deficit and the new 2021 proposed budget bill is described as unrealistic by many officials.

Analysis by PMOI/MEK

Iran, December 6, 2020—Iran’s 2021budget bill was presented this week to the Majlis (parliament) by Hossein Ali Amiri, the parliamentary adviser of the regime’s President Hassan Rouhani. However, state-run media are describing the proposed bill as baseless and hollow.

The regime faces an enormous budget deficit and this has raised many concerns among officials.

"Budget deficit means government revenue and expenditures do not read together," said Majlis speaker Mohammad Bagher Ghalibaf in an interview with state TV on December 3.

A baseless bill

The proposed 2021 budget bill relies on the assumption of 47 percent growth in government revenues and public expenditures. The 2020 budget was estimated at $22 billion, described as “an imaginary budget bill” by the state-run Mashreq news website on December 8, 2019.

The regime sought to export about one million barrels of oil per day, while according to state-run media, the regime's oil exports at its peak stood below 300,000 bpd.

However, the proposed 2021 budget bill is beyond “imaginary” and is estimated to be $32.47 billion rials. In the newly proposed bill, oil exports are estimated at 2.3 million bpd at $40 per barrel.

While the regime’s oil exports is currently around 300,000 bpd, Rouhani’s government doesn’t explain how it seeks to reach an export level of 2.3 million bpd.

According to state-run media, the government seeks to export 900,000 bpd to the people! The plan was recently proposed based on a promise that “they will return the money for the purchased oil in two years.” Hereby the regime aims to gain foreign currencies at the people’s disposal. The plan caused a widespread backlash on social media as people believe the regime seeks to empty their pockets.

Therefore, exporting more than two million bpd is nothing but a mirage. On December 4, Ghalibaf raised questions about the government’s proposed bill. “Oil exports and saving bonds are not stable sources of income. The government must be realistic in presenting its budget bill,” he said.

Increased military budget

Rouhani’s government could not provide a reasonable answer to how they will export the remaining 1.4 million bpd. Rouhani is merely hoping to sell oil as a result of a sanctions relief from a new U.S. administration. But the question is whether the regime will withdraw from its missile program and interference in the region, which are new conditions for the U.S. to be back in the 2015 nuclear accord, known as the Joint Comprehensive Plan of Action (JCPOA).

Therefore, some regime officials describe this situation as the fall of the establishment and an "endless degradation” and Ghalibaf clearly warns that building the budget on exporting oil is “relying on nothing.”

Also, in the proposed 2021 budget bill, the regime has increased the military budget for suppressive objectives by 11 percent. The new bill has dedicated $4.67 billion for the military. This is while the people are overwhelmed with the ongoing novel coronavirus crisis, poverty, and inflation, and are in need of increased budgets for the health industry, not the military. The budget for public services is a mere 20 percent of the military budget.

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.