In Iran, debates on the government’s budget are mainly seasonal; each December sees a raft of budgetary discussions on topics, including the percentage of rise in salaries of government employees and pensioners, the price of fuel and tax issues. Most of these topics won’t be touched again until the next December, said Mohammad Qasemi, an economist, in an article for the Persian economic daily Donya-e-Eqtesad. The translation of the text follows:
Public finance specialists believe that budget is the highest level of dialogue between the government and the people. It is also a key official document that requires a dialogue between the executive branch and the legislative branch (administration officials and representatives of people).
Parliamentarians see whether the public demands are being reflected in the budget and whether sources such as tax or oil and gas revenues will be used efficiently.
In advanced countries, the budget prepared by the government is a testament to its recognition of economic and social issues, opportunities to improve the state of administration and well-devised measures to solve problems. The importance of preparing, approving, implementing, reporting and monitoring the budgeting process is so great that in many countries, laws determine the responsibilities of those involved in the budgeting — from the president to local authorities and the process involved.
It is interesting that in Iran, people and even experts view the budget as an economic issue whereas given the above explanation and thanks to the involvement of political institutions in the budgeting process and the need for legal frameworks to legitimize this presence, budgeting is a mainly political and legal issue that also includes important economic dimensions. The annual budget is like a snapshot of the public sector taken at a specific moment (every December). At present, this photo shows a dismal reflection of the public sector.
Qualms Over Competence of Decision-Makers
In the past decades, the parliament and the executive branch set numerous tasks for the government, but you can say with utter conviction that these are far beyond the means of government resources.
A look at the so-called laws on “supporting the family and the youth” and “surge in housing production” will be informative. From the beginning, it was crystal clear that the government would not have sufficient resources to carry out the tasks assigned by these laws. Strangely, this process is continuing and the consequences of the government’s failure to implement the laws appear in the form of people’s distrust in the competence of decision-makers.
There are thousands of unfinished road, rail, port, hospital, school, university, dam and power projects for which there is no government money; the later they are finished, the more resources will be imposed on the people. What’s worse is that we don’t know whether adequate studies were carried out prior to their launch, or they were shaped by political pressure? Will they have a special economic and social outcome?
Billions of rials have been invested in hundreds of state-owned companies whose economic feasibility is unknown. You can’t find regular and up-to-date report on their efficiency (the move by the Ministry of Economic Affairs and Finance to publish the financial statements of these companies over the last year is praiseworthy, though).
Nearly 18 years after the promulgation of the general principles of Article 44 of the Iranian Constitution, some state companies are still producing private goods, including all types of machinery and agricultural products. Oil and gas companies are entangled in the trap of paying cash subsidies and sanctions have made investment difficult; their problems manifest in the form of lack of electricity, gas and petroleum products, hurting production sector and people’s daily lives.
Among the anomalies of the public administration are the imbalance between resources and expenditures of pension funds, the inadequacy of salaries of many government employees and pensioners leading to their dissatisfaction, public disappointment with the amount and quality of educational and judicial services, and many more.
Experts believe that these problems are to blame on the lack of governance; problems stemming from Iranians’ long-standing mistrust in the government’s efficiency and its handling of abundant oil and gas resources over the past five decades.
Some people attribute all issues to the lack of resources; they believe the solution is to delegate public affairs, such as education and healthcare to the private sector. It is very sad that people involved in budgeting have also ignored the above-mentioned problems.
The preparation and approval of budget is a unique opportunity to discuss these problems with the people and the legislative branch, and seek effective solutions. Politicians’ resistance to understand that running the country at the present juncture is different from the time the country squandered oil revenues, which is one of the reasons people don’t feel good these days.
