Budget 98; 'Credit Institutions' Consume a Budget Equivalent to a Ministry

The Iranian government has allocated over 8 trillion tomans in the next year's budget to pay off debts of financial and credit institutions and about 55 billion tomans for 'organizing' currency rate announcement websites. The significant reduction in Iran's oil revenues due to U.S. sanctions is the main topic concerning next year's budget. On Sunday, January 6, the deputies of the Planning and Budget Organization presented a 'confidential report' on this matter to the Parliament's Program and Budget Commission. In the 98 budget bill, a line titled 'determining the fate of all unauthorized credit institutions' has been included, with 8,110 billion tomans allocated to it. This amount is equivalent to the budget of some ministries; for instance, in the 98 budget, the operational and developmental credits for the Ministry of Energy and its subsidiaries are projected to be over 7 billion tomans. Earlier in July, the head of the judiciary and government officials announced that the government had paid 30 trillion tomans to creditors of financial and credit institutions. Meanwhile, some members of parliament and Iranian economic newspapers cited this payment as one reason for the increase in liquidity last year. For example, the Arman newspaper reported that the Central Bank 'printed unbacked money' to pay off the claims of defrauded depositors of financial institutions, and 'this money becomes liquidity with a sevenfold multiplier and infiltrates the layers of the economy.' The crisis of financial and credit institutions is among the topics that mention the roles of some Friday prayer leaders, judges, and the children of prominent clerics and political figures. Valiollah Seif, the head of the Central Bank, announced on December 21, 2017, that in disputes between the Central Bank and unauthorized financial institutions, courts had ruled in favor of these institutions in some cases. Two days prior, Hassan Rouhani, the President of Iran, emphasized that dealing with these financial institutions was very 'difficult' and added that 'everyone was pressuring us and writing letters from all organizations. Strange people were making requests.' Ahmad Tavakoli also stated that the CEO of the Thamen al-Hojjaj financial institution 'has significant influence and even obtained an arrest warrant for Mr. Bahmani, the former head of the Central Bank.' The next year's budget also includes a line for 'organizing currency rate announcement websites.' It is unclear how the government plans to 'organize' these websites with this budget. In the language of Islamic Republic officials, 'organizing' usually means dealing with and collecting. Since 2012, following fluctuations in the Iranian currency market, several currency rate announcement websites have been shut down and their operators arrested. Since the beginning of the year and after reports about the possibility of the U.S. exiting the JCPOA, the currency market has also experienced severe fluctuations, with the dollar price reaching 19,000 tomans at one point. Regarding oil sales, the Rouhani government has projected that it will export 1.5 million barrels of oil daily next year, which means Iran's oil sales will be halved compared to this year. Meanwhile, Mohammad Mahdi Moftah, the spokesperson for the Parliament's Program and Budget Commission, announced that the deputies of the Planning and Budget Organization presented a 'confidential report' on next year's oil revenues during the commission meeting on Sunday. He did not mention any details of this report. Some members of parliament believe that Iran's oil sales may drop below one million barrels, which is not accounted for in the budget. Additionally, Fardin Farmand, a representative from the city of Miandoab, staged a protest against the 98 budget bill for a few minutes in front of the Parliament's presiding board on January 2. He requested that the Parliament review the next year's budget situation in a closed session, but representatives opposed this proposal. The Parliament is currently reviewing next year's budget, and on Sunday, members of the budget consolidation commission for 98 were elected. Gholamreza Tajgardoon was elected as the head of this commission, and Mohammad Hossein Farhangi and Ali Asghar Youssefnejad were elected as vice presidents. Mohammad Mahdi Moftah was also elected as the spokesperson for this commission. The parliamentary committees will introduce representatives to participate in the budget consolidation commission, which will be responsible for reviewing the budget. Ultimately, the resolutions of this commission regarding the budget must be approved in the Parliament's open session.