Nobakht: The Shadow Budget for Next Year Will Be Approved 'In Line with Sanctions'

The head of Iran's Management and Planning Organization described the year 1398 (2019) as an 'exceptional year in contemporary Iranian history' and stated that due to U.S. sanctions, the budget for this year will be approved in a 'special' and 'sanction-adapted' manner. He also predicted that 'next year will be a difficult year.' Meanwhile, Majid Takht-Ravanchi, the political deputy of the Iranian president's office, announced on Friday, August 10, that delegations will travel to 'neighboring oil-rich countries' to deliver a message from the Iranian president regarding the importance of oil sanctions. According to IRNA news agency, Mohammad Baqer Nobakht stated that the budget for 1398 must include a 'shadow attachment' and that, in addition to the officially prepared budget, 'we must have a budget for the most pessimistic scenario.' He added, 'Even if we face a reduction in resources for the remaining eight months of this year, we can manage to get through 1397 (2018) in some way, but next year will be a difficult year.' Nobakht did not provide details about this 'shadow budget.' The term 'shadow budget' refers to an additional budget prepared for emergency situations alongside the regular budget for normal income and expenditures. During the negotiations between Iran and the 1+5 group, officials from Hassan Rouhani's government had spoken about the possibility of approving a 'shadow budget' if the negotiations did not yield results. Discussions about an 'emergency budget' or 'shadow budget' were also raised during Mahmoud Ahmadinejad's presidency in 1385 (2006), but were not officially approved. Some officials and analysts have predicted that U.S. sanctions will have a significant impact on Iran's economy. Iranian officials have also reported on the stockpiling of food supplies for emergency situations. Meanwhile, Ali Rabiei, the former Minister of Labor, predicted that due to the new sanctions, one million jobs in Iran would be lost by the end of the current year, emphasizing that economic pressure on the country and people would increase due to U.S. sanctions. The first round of U.S. sanctions against Iran was implemented on Tuesday of this week, targeting Iran's access to dollars, trade in metals, coal, industrial software, and the automotive industry. The U.S. has announced that the next phase of sanctions, starting on November 4, will target Iran's oil industry, and is currently working to reduce Iran's oil imports to zero from its allies. In the meantime, Majid Takht-Ravanchi described the sanctions on oil sales and banking transactions as the most important sanctions. He announced that delegations would travel to neighboring oil-rich countries to convey the Iranian president's message. He emphasized that if the sanctions on Iran's oil sales affect the oil market, OPEC member countries 'do not have the right' to increase their production. Takht-Ravanchi's statements come as reports indicate a significant increase in oil production from Saudi Arabia and Russia, reaching a new record in July. Meanwhile, Mahmoud Vaezi, the head of the Iranian president's office, traveled to Ankara to deliver Hassan Rouhani's message and met with Turkish President Recep Tayyip Erdoğan on Thursday evening. The details of the Iranian president's message to his Turkish counterpart have not been published. The Iraqi Prime Minister announced on Tuesday, August 7, in a press conference that Baghdad does not agree with U.S. sanctions against Iran but will comply with them to protect its own interests. Although Iran and the U.S. have hostile relations, both are among Iraq's largest allies, and thus the return of Washington's sanctions places Abadi's government in a difficult position.