Khamenei's Order for Withdrawal of $1.5 Billion from the National Development Fund for Military Expenses

A member of the budget consolidation commission announced that Ayatollah Ali Khamenei, the leader of the Islamic Republic, has approved the withdrawal of $1.5 billion from the National Development Fund to "strengthen Iran's defense capabilities." Mahmoud Negahban Salami stated on Tuesday, February 4, that a meeting of the budget consolidation commission was held to summarize some aspects of the 2019 budget bill. It was announced in this meeting that with the leader's approval, $1.5 billion will be allocated from the National Development Fund to strengthen the country's defense capabilities next year. The funding for military expenses from the National Development Fund comes despite the fact that its charter states that this fund is established "to convert part of the revenues from the sale of oil, gas, gas condensates, and petroleum products into lasting wealth, productive and generating economic assets, and to preserve the share of future generations from oil, gas, and petroleum resources." This is not the first time that military expenses have been funded from the National Development Fund. Last year, Ayatollah Khamenei also ordered the withdrawal of $4 billion from this fund, of which $2.5 billion was allocated for military purposes. Military expert Hossein Aryan stated that this amount was withdrawn to cover the costs of the war in Syria. Previously, some Iranian parliament members had reported a reduction in the military budget for the upcoming year and criticized it. Ahmad Alireza Beigi, a representative from Tabriz, stated that Hassan Rouhani's government was seeking to reduce the defense budget in the 2019 budget bill and intended to allocate the defense budget "from the National Development Fund." In December of this year, Heshmatollah Falahatpisheh, the head of the Foreign Policy and National Security Commission, expressed concern that the revenues projected in the budget bill for defense expenses do not provide the necessary guarantees and may not be "easily accessible." Meanwhile, Rouhani had mentioned in December that changes might be made to the 2019 budget bill based on the leader's recommendations. Some speculations indicated that these changes were related to a reduction in the military budget. Fereydoun Khavand, an economic analyst, previously told Radio Farda that military expenses and other items seen in the commission's resolution are not included in the uses of the fund according to its charter. Even in the first note of section six related to the uses of the fund, it is emphasized that "using the fund's resources for current expenses and the acquisition of capital assets (infrastructure) and repaying government debts in any form is prohibited." The leader's order for withdrawal from the National Development Fund and the increase in the military budget comes at a time when Tehran is under U.S. sanctions due to its ballistic missile activities and what has been described as interference in the affairs of regional countries. The European Union also stated on Tuesday in a summary of its position regarding Iran that it is "deeply concerned" about Tehran's ballistic missile activities and urged the Islamic Republic to cease these activities, especially the launch of ballistic missiles.