Parliament Research Center: No Funds Will Be Deposited into the National Development Fund Next Year

The Research Center of the Iranian Parliament predicted that due to a decrease in oil sales and withdrawals from the National Development Fund, including for military purposes, no money will be deposited into this fund next year. The center's report also warned that the fund is being depleted due to government withdrawals in recent years. According to the statute of the National Development Fund and the Sixth Development Plan, at least 34% of the revenues from oil sales should be deposited into the National Development Fund next year. However, the government has considered the fund's share of oil revenues to be 20% in the budget bill for next year. Based on the Research Center's predictions, if one million barrels of crude oil and gas condensates are exported daily, the total share of the National Development Fund will be $4.6 billion. Due to U.S. sanctions, Iran's oil sales in 2019 are about half of the projected sales for 2018. Nevertheless, the government has proposed in another section of the bill to withdraw up to 40 trillion tomans from the National Development Fund, of which 20 trillion tomans will be allocated for military expenses. Mahmoud Negahban Salami, a member of the Budget Consolidation Commission, reported on Tuesday, February 4, that the Supreme Leader of the Islamic Republic agreed to withdraw $1.5 billion from the National Development Fund to 'strengthen Iran's defense capabilities.' Last year, Ayatollah Khamenei also ordered a withdrawal of $4 billion from this fund, of which $2.5 billion was allocated for military purposes. The funding of military budgets from the National Development Fund is contrary to its statute, which states that this fund is 'established to convert part of the revenues from oil, gas, gas condensates, and petroleum products into sustainable wealth, productive assets, and economic growth, as well as to preserve future generations' share of oil, gas, and petroleum resources.' The Research Center of the Parliament concluded in its report that practically no money will be deposited into this fund next year. The center also reported that the Economic Coordination Council approved in July that 12 percentage points of the 32% share of the National Development Fund's foreign currency resources be reserved in a special account for 'urgent needs of the country in unfavorable conditions.' However, the Research Center did not explain the term 'urgent needs of the country in unfavorable conditions.' This term could refer to wartime conditions or an unfavorable economic situation caused by sanctions. The Supreme Economic Coordination Council of Iran was formed after the U.S. withdrawal from the JCPOA and the re-imposition of its sanctions. The heads of the three branches of government and several government officials are members of this council.