Why Iran's government can't enforce oil-free budget plan?
TEHRAN, Iran, Dec.2
An oil-free budget plan for Iran in today's realities, in the current structure, would be irrational, expert on banking issues Saeed Mesgari told Trend.
The disadvantages of oil dependency weren't so clear in Iran in the past several decades, but now it has become clear to everyone, so there's no doubt that the government needs to cut down on its dependency on oil, he said.
“This necessity has doubled in recent months as oil revenues have fallen sharply, thanks to re-imposed sanctions,” Mesgari said.
"With the withdrawal of the United States from JCPOA last year, a serious determination has been made to cut the dependence on oil revenues,” he said. “There has been a lot of debates over this issue. "A look at these topics shows that most have been around finding alternative sources of income.”
Mesgari said most of the government's resources are spent on current costs and little funding is left for development plans.
“Given the low share of the construction expenditures in government's spending, it seems unlikely that there will be significant savings,” he said.
He went on to say that lowering this spending could also have a negative impact on the country's GDP and reduce economic growth.
One of the options to tighten government spending, is to not save costs, but to review government duties and change administrative procedures," Mesgari said.
He added that the revision of duties should be aimed at reducing government interference, outsourcing and strengthening private sector, reforming structures, procedures and inaccurate decisions.