Approval of the Budget Bill's General Principles After Warnings About 'Security' Consequences of Its Rejection

On Saturday, February 16, the Iranian parliament approved the general principles of the 1398 budget bill following warnings from several representatives and government officials regarding the 'security' and 'foreign' consequences of rejecting the bill. Some opposing representatives believed that the proposed budget by the government for the 1398 fiscal year did not fully account for sanctions and the reduction of Iran's oil sales to about half, predicting a budget deficit of 100 trillion tomans. However, supporting representatives stated that if the general principles of the budget bill were rejected, the government would not be able to increase its employees' salaries by 20 percent. According to these representatives, if the general principles of the budget bill were rejected, the government would also be unable to pay the 12 trillion tomans allocated for low-income individuals to compensate for the economic impacts of U.S. sanctions. On the other hand, some representatives warned that the failure to approve the budget bill could have 'security' consequences. The statements of these representatives could hint at the possibility of protests similar to those in December of last year. Previously, some government officials had also warned about the likelihood of a repeat of these protests, especially after the return of sanctions. On Saturday morning, a closed session was held to review the general principles of the budget bill. Ultimately, the parliament representatives approved the general principles of the 1398 budget bill with 117 votes in favor, 86 against, and 8 abstentions out of 212 present representatives. Mahmoud Sadeghi, a member of the Hope faction in parliament, opposed the 1398 budget bill, stating that it did not consider the 'special conditions of economic warfare' and had 'hidden' them. According to Sadeghi, this budget was based on 'unrealistic and illusory' oil sales revenues despite U.S. sanctions and the reduction of Iran's oil sales. He referred to a report from the parliament's Research Center indicating that the next year's budget might have a deficit of 100 trillion tomans. This amount is equivalent to one-fourth of the government's general budget and about one-tenth of the total budget for the next year. Forecasts indicate that due to U.S. sanctions, Iran's oil sales in 1398 will be about half or one-third of the projected sales for 1397. According to estimates from the World Bank and the International Energy Agency, Iran's oil and gas condensate exports are not expected to exceed one million barrels next year, down from two million and 500 thousand barrels last year. During Saturday's session, Mohammad Reza Tabesh, a member of the Hope faction, spoke in favor of the budget bill, stating that rejecting this bill 'is significant from a national security perspective.' Additionally, other representatives, including Gholamreza Tajgardoon, warned that if the general principles of the budget bill were rejected, the government would not be able to increase its employees' salaries by 20 percent at the beginning of the year. Meanwhile, Ardeshir Nourian, a representative from Shahrekord, stated that 'rejecting the budget bill sends a negative signal to society that could be exploited.' On the other hand, Mohammad Baqer Nobakht, head of the Planning and Budget Organization, warned that failing to approve the budget would present a 'critical face' of Iran's economy. Ali Motahari, the deputy speaker of parliament, also emphasized that rejecting the budget bill could have 'internal and external consequences.' In contrast, Gholamreza Katib, a representative from Garmsar, opposed the bill, stating, 'We should not tie the specialized budget discussion to national security. We should decide and vote based on logic.' If the parliament did not approve the general principles of the next year's budget bill, the government would have to submit a new bill to the parliament. Ten days ago, Ali Larijani, the speaker of parliament, announced that the Supreme Leader of the Islamic Republic had issued an order for 'structural reform of the country' within the next four months. However, these statements were later denied, and according to Amir Hossein Ghazizadeh Hashemi, a member of the parliament's presiding board, the Supreme Leader's order 'related to budget structure reform.'