A country’s budget is the government’s fiscal plan for that state for a period of 12 months. All the country’s revenue and resources to provide credit are forecasted, placed alongside anticipated costs and expenses. The intention of this piece is to provide a much-needed close examination of Iran’s budget.
Iran’s next fiscal budget (from March 2018 to March 2019) is equal to around $350 billion. How is this money provided for? In general, Iran’s budget is funded through oil, taxes, increasing bonds and eliminating cash handouts or subsidies.
Oil, a natural resource belonging to the Iranian people, is currently being plundered by the ruling mullahs for foreign expenditures.
The second source of Iran’s budget is taxes. The government of President Hassan Rouhani has decided to increase taxes by 11%, equaling to $55 billion. This means Rouhani intends to take $55 billion out of the people’s pockets and use it for the government’s expenses. For a better understanding, we should compare these numbers to that of oil revenues.
Iran will have sold $50 billion of oil from March 2017 to March 2018, according to Deputy Oil Minister Amir Hossein Zamani. This means Iran’s regime seeks to extract $5 billion dollars more than their oil revenue in taxes from the people.
This is not an ordinary government with a live economy asking for people to pay their taxes. This is “Plundering 101” by Iran’s mullahs.
This is also something to think about for those European companies seeking to economic contracts with Iran, despite senior U.S. officials warning this being tantamount to sending a check to Iran’s Revolutionary Guards (IRGC). Moscow should also take this into consideration, especially after providing a major concession to Tehran this week.
These taxes are being demanded from the Iranian people when the economy is already suffering under heavy recession. The country’s industry is literally nearing a complete halt.
In any other country undergoing such conditions taxes are relieved and the industry/production branch is provided necessary loans. Rouhani, however, is raising taxes.
Bonds are another source of providing for a government’s budget and Rouhani’s cabinet intends to escalate this amount by at least $45 billion.
Bonds, however, are only applicable in a popular government, last experienced in Iran under Prime Minister Mohammad Mosaddegh back in the early 1950s. This is not the case in today’s Iran where protesters are heard chanting, “Death to Rouhani” and “Death to Khamenei,” in reference to Iranian Supreme Leader Ali Khamenei.
Another source from which Rouhani seeks to provide for his budget is through slashing cash handouts/subsidies. This “moderate” figure intends to deprive 30 million people, providing an additional $5 billion to his budget. This is tantamount to taxes, being nothing but plundering millions of Iranians already living in poverty.
The question now is where the oil revenue, being the main source of Iran’s budget, is actually allocated?
The semi-official ILNA news agency wrote Rouhani’s cabinet has significantly increased the IRGC’s suggested budget by 42%, parallel to a 33% elevation of the defense budget. All the while the country’s construction budget will witness a nosedive.
The IRGC will receive $8 billion from Iran’s fiscal budget. This is equal to cash handouts for 49 million people a year. If Rouhani had not increased the IRGC’s budget by 42%, at least 21 million people would be receiving subsidies.
In a country where its rulers consider ballistic missiles more important than the people having something to eat, it’s only natural that the nation’s money is poured into the pockets of IRGC members and other security personnel.
Now that we’re here, it’s good to take a look at the budget allocated to Iran’s notorious Ministry of Intelligence and Security (MOIS). These spies are being provided a $1 billion budget from the Iranian people’s pockets, only to focus mainly on spying on the Iranian people. The irony.
This amount should be compared to a number of entities, intended to serve the people, yet apparently are of lesser importance for the ruling state: The Social Security Organization, the Environment Protection Organization and the Organization for Research, Education & Agriculture Promotion.
The budget of all these entities combined are no match to the money provided to the MOIS. It is crystal clear that the security of Tehran’s mullahs are far more important for Rouhani than the drying Lake Urmia and Zayande River, retirees’ pensions, employees’ insurance and ….
Iran’s semi-official Jahan-e San’at daily analyzed the country’s next fiscal budget as: “Iran’s oil revenue is being allocated to foreign obligations and our presence in regional developments. Even the National Development Fund, intended for future generations, is not provided its share. In such circumstances when no money is coming from abroad to manage the country, the officials have seen no solution other than placing their hands into people’s pockets…”
To make a long story short, if up to now people were managing to make ends meet, with prices skyrocketing across the board, all families throughout the country will be facing major challenges.
This is the end result of Rouhani strengthening the IRGC at the price of the poor becoming poorer and the very few rich becoming richer. This will keep the fire burning beneath the ashes, igniting again and again until the people overthrow this regime.
While Washington has reversed Obama’s destructive appeasement policy vis-à-vis Iran, Europe must understand that investing in Iran is not only betting on the wrong horse, but standing alongside the murderous mullahs’ regime against the will of the Iranian people.
This article first appeared on Forbes. Mr. Alavi is a political/rights activist focusing on Iran & the Middle East. He also writes in Al Arabiya English, and contributed to The Federalist, The Hill and Raddington Report.