Mohammad Kordbacheh: The Country Can Be Managed with Zero Oil

The continuous decline in oil prices and the fate of Iran's economy in the coming days and months is the subject of several analyses and notes published this week in the economic sections of Iranian newspapers, publications, and websites. A summary of some of these notes is presented below: Managing Iran's economy with zero oil. Mohammad Kordbacheh, who has been recognized for years as a budget writer for various governments in Iran, believes that 'there is the ability to manage the country even with zero oil.' He explains at the beginning of this note that in the budget bill for the coming year, the budget's dependence on oil is about 33 percent, emphasizing that 'one-third of next year's budget is made up of oil.' This budgeting expert also emphasizes that he does not claim that 'if oil prices continue to decline, nothing will happen in the country's economy.' According to Mohammad Kordbacheh, 'It is clear that as oil revenues decrease, lower-priority projects will receive less budget, and the focus will be on completing projects that have high physical progress and can be operational by the end of next year.' The advisor to the head of the Organization of Management and Planning has differentiated between development budgets and salaries, stressing that in any case, salary payments will remain safe from the fluctuations of oil prices. Kordbacheh also notes that 'the decline in oil prices in global markets has a threshold of tolerance, and producers and consumers are unwilling to let prices fall below a certain level because both producer countries have set their annual budgets based on oil above $50, and consumers will face bankruptcies if prices drop further.' In conclusion, Kordbacheh predicts that ultimately, next year's budget will be reviewed in parliament at the proposed price of $72 per barrel of oil. The net effects of sanctions on the economy. Hamid Ghanbari, an economist, in a note written for the newspaper 'Donya-e-Eqtesad,' discusses the threats and opportunities of sanctions for Iran's economy. According to this senior central bank expert, 'There is no doubt that in any situation, threats must be turned into opportunities.' He continues, 'There should be no doubt that one should not be passive in the face of sanctions, and even the lack of suspension of sanctions should not lead to the cessation of efforts made for the growth and development of the country.' However, Ghanbari writes that 'efforts to reduce the effects of sanctions and achieve economic growth and development under sanctions is one thing, and ignoring those effects and considering the sanctions themselves as opportunities is another.' This senior central bank expert emphasizes that 'even if sanctions have led to the creation of opportunities in some cases, the net effects that sanctions leave on the economy must be considered and calculated.' Ghanbari notes that 'sanctions may have led to an increase in domestic investment in Iran's energy industry; however, if at the same time, foreign investment in the country's energy sector has decreased, the total costs and benefits must be considered before commenting on whether sanctions are a burden or an opportunity.' He also points out the effects of sanctions on Iran's economic and trade relations with other countries, emphasizing that 'sanctions may have led Iran to establish economic and trade relations with new countries, but the costs of severing trade and economic relations with former trading partners cannot be ignored and must be included in calculations.' Ghanbari concludes his note by stating that while sanctions and the difficulties in importing certain goods from abroad may have led to a boom in domestic production of those goods, 'this economic and banking expert emphasizes that 'one should not forget that if these problems had not arisen, the production facilities that are currently being used for those items could have been employed to produce other goods.' Unemployment; a chronic problem. Mohammad Gholi Yousefi, a faculty member of Allameh Tabatabai University, in a note written for the newspaper 'Jahan San'at,' emphasizes that 'unemployment in the country is a chronic economic problem that is not limited to the present time.' He attributes the unemployment problem to the adoption of unscientific and non-expert policies by governments. This economist believes that 'as long as the government does not provide the groundwork for employment in the country through extensive investments, actions, and long-term planning, the situation will continue in this manner, and the employment crisis will not be resolved with temporary decisions and actions.' Yousefi also does not consider the unemployment problem to be 'exclusive to Iran,' describing it as 'a global phenomenon' that, according to this faculty member of Allameh Tabatabai University, 'most countries are facing.' According to this economist, 'the government should not underestimate the issue of employment, and logically, when the government talks about economic growth, unemployment should also decrease.'