The Management and Planning Organization; Overpowered by Governments

A seventy-year-old organization suddenly lost its existence due to Mahmoud Ahmadinejad's decision. An organization that was supposed to think and plan for Iran's development was reduced to a deputy office, causing economic experts to raise their voices that development would henceforth become an impossible dream. These experts believed that the way was opened for evasion from planning and programmability. Critics of the dissolution of the Management and Planning Organization believed that the government dissolved it to escape the oversight blade, disregarding the expertise of the Management and Planning Organization. The dissolution of the Management and Planning Organization was for many a return to the decision-making and decision-making system of Iran's economy to the Qajar era. However, for the past ten days, the Management and Planning Organization has been set to rise from its ashes. With the decision and resolution of Hassan Rouhani's government, the Management and Planning Organization is to be revived. Hassan Rouhani intends to fulfill one of his electoral promises, delayed by more than a year, and also to establish a body for development, planning, and management in a corner of Baharestan Square in Tehran. But how effective has the existence or non-existence of this organization been in Iran's development? What was all the fuss about the existence or non-existence of the Management and Planning Organization? In a dialogue with Arash Hassan-Nia, Ali Mazrouei, an economic planning expert, discusses these issues. Ali Mazrouei is a graduate of economic planning from Shahid Beheshti University in Tehran. He has undergone strategic management courses in Japan and was an economic advisor to President Mohammad Khatami during his first term. In the sixth parliament, which was formed with a majority of reformists, he served as the deputy chairman of the Budget and Planning Commission. Mr. Mazrouei, we have over seventy years of experience in planning for development in Iran, yet after this seventy-year experience, Iran is still considered a developing country, not a developed one. Among various factors affecting underdevelopment, do you not think that the main culprit or at least the main failure should be attributed to an organization called the 'Planning and Budget Organization' or 'Management and Planning Organization' that was designed for this purpose of development in Iran's economy but has not succeeded in this endeavor after seventy years? Ali Mazrouei: The first point is that based on existing historical documents, the issue of planning in Iran has been accepted for nearly seventy years, and for this purpose, the Planning Organization was established in 1948. The second point is that when we discuss development and the need to implement a development plan in the country and ask why this issue has not been resolved despite more than seventy years, this problem relates to many factors and causes that require extensive discussion, and it cannot be solely attributed to the Planning Organization. The third point is that the purpose of establishing the Planning Organization was to use oil revenues to advance development projects, which were mainly infrastructural projects in the country. However, due to government instability and various conditions that arose, this has never been implemented, and the governments in power used this oil revenue for administrative affairs, gradually moving the Planning Organization away from this goal. The oil revenue that was supposed to be used for development projects is now spent in the budget for current expenses. Unfortunately, this use of oil revenue in the budget has increased day by day, to the extent that in recent years, we have seen that more than 80% of the government's budget consists of oil revenue, and only after securing the operational budget through oil revenues, if there is a surplus, this surplus is spent on infrastructural development expenses. Therefore, it can be observed that gradually a significant deviation from the original development path has occurred, and in my opinion, one of the main reasons that the current Management and Planning Organization could not advance development in the country is that the revenues intended for the development sector have diminished, and today it can be said that the biggest problem in managing the country is this perspective on oil revenue and the implementation of development projects. I believe that the Planning Organization or the Planning and Budget Organization or the Management and Planning Organization has historically been overpowered by governments, and governments have tried to use oil revenue more for managing the country's current affairs than for development works, resulting in the initial goal for which the Planning Organization was established not being pursued, and the problem of the country's underdevelopment continues. Well, Mr. Mazrouei, considering the points you mentioned, that the Planning and Budget Organization or the Management and Planning Organization has significantly deviated from its initial definition and that governments essentially spend the oil money that was supposed to be used for other purposes on their current expenses, what difference does it make whether this organization exists or not? Why did the dissolution of the organization by Ahmadinejad's government upset experts, and today, with the decision to revive the Management Organization, some experts and economic analysts are happy and hopeful about the future of Iran's economy? You see, despite all the discussions I've made, the Management Organization acts as a cross-sectoral entity and as the brain of government decision-making and also serves as an advisor to the government and parliament. Furthermore, it supervises the performance of agencies in managing affairs and spending the budget. It is true that the initial goal for which the organization was established no longer exists in its original form and is not pursued—although the Management Organization still tries to return to that goal—but I believe that the dissolution of this organization incapacitated the brain of government decision-making, and secondly, despite all the existing problems, it eliminated oversight over the performance of agencies and how the budget allocated to them is spent and how effective it is. In my opinion, the dissolution of this organization dealt the biggest blow to Ahmadinejad's government. We witnessed that the highest foreign revenue occurred during Ahmadinejad's eight-year term compared to all years before and after the revolution, yet the country's economic indicators went into decline, and the record left behind shows that these resources were not utilized well, and the country suffered more misery and backwardness. Therefore, despite all the potential issues that may exist, the existence of the Management and Planning Organization is still better than its absence. A noteworthy point is that over the years, an accumulation of knowledge and experience had taken place in this organization, which housed the best experts in the country, and despite all the issues and problems within the country and despite all the factors of underdevelopment, this organization tried to steer the country's administration in the right direction as much as possible. You mentioned the duties of the Management Organization. First, the same discussion of planning for development or the fact that the Management and Planning Organization is recognized as the brain of the government. Another duty of this organization is the supervisory aspect over the performance of development projects and the spending of the budget in these projects and agencies. However, in Iran's governmental structure, especially in the structure of the government, we see that, for example, each ministry has a planning and programming deputy or an economic and planning deputy whose job is to think and plan for the projects that the ministry has in its area of work. On the other hand, we see that there are multiple supervisory organizations that also have the same duty of oversight over spending and budget expenditure. The General Inspection Organization or the Court of Audit, which presents annual budget reports, are among these supervisory bodies. Do you not think that this multitude of institutions in the decision-making and decision-making domain is a form of parallel work? How can this parallel work and multitude of institutions be explained? Regarding executive agencies like ministries, it is natural that they focus on advancing the work of their respective ministries. In other words, one could say that they have a sectoral perspective, and the officials of those ministries seek to implement their sectoral programs. However, when they want to draft the budget and advance their programs, they must provide all their information and planning to the Management Organization, and the role of the Management Organization, as I said, is a cross-sectoral center that actually integrates and organizes these sectoral programs based on the resources and capabilities available to the country. From this perspective, the role of the Management Organization becomes very important as it brings a comprehensive and cross-sectoral view for the government. It is under this synthesis that the government can advance the needs and capabilities of the country towards planning. Whereas if the government were to rely solely on executive agencies and ministries, it is natural that each ministry would seek to obtain the maximum resources for itself to implement its sectoral programs. But it is the Management Organization that integrates or adjusts all these programs and allows the country to have comprehensive growth. It looks at industry, agriculture, and the service sector in such a way that one can consider the Management Organization as a collecting organization and, as I said, it acts as the brain of government decision-making while also serving as a good advisor to the government and parliament. If the decision-making system passes through the Management Organization, we will not witness sectoral and one-sided perspectives dominating the administration of the country. Supervisory bodies like the Inspection Organization or the Court of Audit and other existing bodies mostly prepare reports, and of course, with these reports, they can help determine how much and to what extent executive organizations have moved in the right direction in spending the budget. However, these bodies are not decision-makers. The most important advantage that the Management Organization has is that it allocates the budget based on oversight. This means that this organization does not only supervise. It prepares quarterly reports on the performance of agencies and also on the progress and status of development projects, and based on these performance reports, if the budget has been spent correctly, it reallocates the budget, and if not, it prevents the waste of resources. In other words, it is the Management Organization that can control the spending of the budget step by step based on the budget law. This organization can oversee that the budget is indeed spent in the right direction. But other agencies are merely report generators; naturally, if they observe significant deviations in budget spending that have strayed from the designated path and detect corruption, they can intervene and take action. You were the deputy chairman of the Budget and Planning Commission in the sixth parliament. This commission has the most interaction and connection with the Management and Planning Organization, especially during the budget review and drafting periods. At the same time, the most important duty of this organization throughout its ups and downs has been the drafting of the budget document. In your opinion, and based on your personal experience, how closely have the budgets that this organization has brought to the parliament aligned with the characteristics you mentioned? That is, has it been a budget that is not plagued by sectoral perspectives, has land use been considered, and has it been operational, balanced, and orderly overall? The questions you are asking require separate discussions. Because the land use plan has very detailed discussions and has been worked on for years in the Management and Planning Organization to become a national plan, but it did not. During the period we were in parliament, significant work was done on this plan in Khatami's government, and it was supposed to be operationalized in the fifth program, which was completely forgotten with the dissolution of the Management and Planning Organization. Similarly, regarding operational budgeting during the time we were in parliament, preliminary work had been done in Khatami's government, and it was supposed that from 2005 onwards, this operational budget would become the basis for budgeting in the country, which again was practically canceled with the dissolution of the Management and Planning Organization. However, if we want to discuss Iran's budgeting system and how successful the Management and Planning Organization has been in this regard, I must point out two things. One is that with the dissolution of the Planning and Budget Organization, we saw what havoc was wreaked on budget spending in the country by Ahmadinejad's government. When Ahmadinejad came to power, in the very first year he wanted to present the budget to the parliament, he said he wanted to make the budget understandable for all Iranians on an A4 sheet or, for example, said that the budget should fit into a booklet that all Iranians could put in their pockets and understand. Well, this was an impossible and unattainable wish, and the result was that despite more than 700 billion dollars in oil revenue during those eight years, the country made no progress. Because this wish was, in my opinion, a futile wish. Budgeting and budget law is a specialized matter, and as much as the Iranian budget has been prepared and expanded over the years with great detail, it can be said...