Head of Iran's National Development Fund Warns Against Khamenei's Approval of 'Temporary Reduction' of Fund's Share from Oil Revenues

The head of the Executive Board of the National Development Fund of the Islamic Republic reacted to Ali Khamenei's approval of Masoud Pezeshkian's request for a 'temporary' reduction of the National Development Fund's share from oil and gas revenues, warning about the consequences of this decision. Mehdi Ghazanfari emphasized in a post on X that withdrawing from the resources of the National Development Fund is against its charter and can quickly deplete the fund's resources like the foreign exchange reserve account. Ghazanfari mentioned that last week, in a meeting with Pezeshkian, he advised him to 'expand the economic pie' to prevent these withdrawals. He also stressed to Pezeshkian that 'to increase government revenues, oil production and exports must be urgently increased, followed by non-oil production and knowledge-based products.' Ghazanfari referred to a resolution that was rejected by one vote in the Expediency Council, which prevented the National Development Fund from assisting the country through wealth generation. He concluded by urging members of the council to blame themselves for the continued illegal withdrawals by governments from the fund and the excess withdrawals by neighboring countries from shared fields. Ali Khamenei, the leader of the Islamic Republic, agreed on Sunday to Masoud Pezeshkian's request for a 'temporary' reduction in the fund's share from oil and gas revenues. Pezeshkian had previously called for a 20% reduction in the fund's share this year. This decision means transferring 350 trillion tomans as a 'loan' from the National Development Fund to the government's 'development budget,' which is intended for paying farmers' claims, purchasing essential items, and solving truck drivers' problems. According to Eghtesad News, the fourteenth government has resorted to borrowing from the National Development Fund at the beginning of its activities to pay claims, while according to Reza Mohammadi, the banking and credit deputy of the National Development Fund, as of December 30, 2023, the government owes about 100 billion dollars to this fund. Considering the equivalent foreign currency amount of the figure announced by the government (350 trillion tomans), the total debt of the government to the National Development Fund has reached about 108 billion dollars.