News / Middle East

Iranian Parliament Passes Budget in Win for Rouhani

Iranian President Hassan Rouhani, gestures as speaks during a session of the World Economic Forum in Davos, Switzerland, Jan. 23, 2014.Iranian President Hassan Rouhani, gestures as speaks during a session of the World Economic Forum in Davos, Switzerland, Jan. 23, 2014.
x
Iranian President Hassan Rouhani, gestures as speaks during a session of the World Economic Forum in Davos, Switzerland, Jan. 23, 2014.
Iranian President Hassan Rouhani, gestures as speaks during a session of the World Economic Forum in Davos, Switzerland, Jan. 23, 2014.
Reuters
The first state budget proposed by Iranian President Hassan Rouhani has sailed through parliament, handing him a political victory as he seeks to build domestic support for international negotiations on the country's nuclear program.
 
Parliament approved on Sunday a budget bill worth 7,930 trillion rials ($319 billion at the official exchange rate) for the next Iranian calendar year, which starts on March 21, official media reported.
 
The budget slows growth in spending in an effort to repair state finances that have been ravaged by economic sanctions. Expenditure is to rise about 9 percent from the original budget plan for the current year - not nearly enough to keep pace with inflation, which is running near 40 percent.
 
“Everything passed by parliament is acceptable to us. There are only a few differences but they are not major,” a deputy to Rouhani, Vice President for Parliamentary Affairs Majid Ansari, was quoted as saying by the IRNA news agency.
 
Rouhani, who took power last August after elections, needed only 10 days of debate to get his budget passed, an apparent endorsement of his administration as it tries to get the sanctions lifted by reaching a deal with world powers on Iran's disputed nuclear plans.
 
By contrast Rouhani's predecessor Mahmoud Ahmadinejad, who took a hard line with the West, continually feuded with parliament over economic issues including the budget, which was passed with delays of several months.
 
To seal a nuclear deal, Rouhani will need to overcome domestic opposition from opponents of his relatively conciliatory approach towards the West, including some of Ahmadinejad's allies and senior members of the Revolutionary Guards.
 
Spending
 
Rouhani told parliament in December that Ahmadinejad had squandered oil revenues on cash handouts and housing projects, and that Iran faced a mix of high inflation and stagnating growth, with the economy shrinking 6 percent in the past year.
 
His budget suggests he views spending discipline as key to rescuing the economy; the 9 percent rise in his plan is much lower than the 31 percent increase envisaged in Ahmadinejad's last budget.
 
Iranian-born economist Mehrdad Emadi, of the Betamatrix consultancy in London, said that after years in which Ahmadinejad tried to offset the economic sanctions with huge jumps in government spending, Rouhani was starting to reimpose normal budget constraints, a process that would take years.
 
“He is addressing serious problems like the fact that Iranian banks have started to face rial shortages,” Emadi said. “The budget begins to address these problems and is designed to rein in inflation.”
 
Iran's budget announcements are fragmentary and involve a string of revenue assumptions that are subject to sudden change, so analysts said it was impossible to make firm estimates for the government's budget deficit next fiscal year.
 
For example, Rouhani's budget estimates crude oil exports, Iran's top revenue source, at 1.5 million barrels per day. Exports, slashed by the sanctions, are now running at just over 1 million bpd, and look unlikely to rise much unless Iran reaches a comprehensive nuclear deal with the West.
 
But if Rouhani sticks to economic reforms, the deficit may shrink significantly. Last week parliament approved politically sensitive plans to slash subsidies on fuel and food, potentially saving some 630 trillion rials annually in subsidy payments.
 
Implementation of the reform has been delayed for several months while authorities try to soften the blow to consumers by handing out food packages to over 15 million poorer families.
 
Next year's budget plan projects a rise in spending on government operations - excluding items such as activities of state enterprises - of about 14 percent to 1,950 trillion rials.
 
It still needs to be approved by the Guardian Council, a supervisory committee of clerics and lawyers answering to supreme leader Ayatollah Ali Khamenei.

You May Like

Brutality Eroding IS Financial Support

Director of National Intelligence James Clapper says IS's penchant for publicizing beheadings, other brutal forms of punishment hurts group’s bottom line More

Studies: Climate Change a Factor in Disasters in Syria, California

Studies point to possibility of clear and present dangers from a threat often considered to be far in the future More

Video Afghan Refugees Complain of Harassment in Pakistan

Afghan officials and human rights organizations assert that Pakistani authorities are using deadly attack at school in Peshawar as pretext to push out Afghan refugees More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Kerry Seeks Assurances of Russian Non-Interference in Ukrainei
X
March 03, 2015 3:11 AM
U.S. Secretary of State John Kerry has told his Russian counterpart, Sergei Lavrov, that his country could face further consequences to what he called its “already strained economy” if Moscow does not fully comply with a cease-fire in Ukraine. The two met, on Monday, on the sidelines of a U.N. Human Rights Council meeting in Geneva, where Kerry outlined human rights violations in Russian-annexed Crimea and eastern Ukraine. VOA State Department correspondent Pam Dockins reports from Geneva.
Video

Video Kerry Seeks Assurances of Russian Non-Interference in Ukraine

U.S. Secretary of State John Kerry has told his Russian counterpart, Sergei Lavrov, that his country could face further consequences to what he called its “already strained economy” if Moscow does not fully comply with a cease-fire in Ukraine. The two met, on Monday, on the sidelines of a U.N. Human Rights Council meeting in Geneva, where Kerry outlined human rights violations in Russian-annexed Crimea and eastern Ukraine. VOA State Department correspondent Pam Dockins reports from Geneva.
Video

Video Smartphones May Help in Diagnosing HIV

Diagnosing infections such as HIV requires expensive clinical tests, making the procedure too costly for many poor patients or those living in remote areas. But a new technology called lab-on-a-chip may make the tests more accessible to many. VOA’s George Putic reports.
Video

Video Afghan Refugees Complain of Harassment in Pakistan

Afghan officials have expressed concern over reports of a crackdown on Afghan refugees in Pakistan following the Peshawar school attack in December. Reports of mass arrests and police harassment coupled with fear of an uncertain future are making life difficult for a population that fled its homeland to escape war. VOA’s Ayesha Tanzeem reports from Islamabad.
Video

Video Ukrainian Volunteers Prepare to Defend Mariupol

Despite the ongoing ceasefire in Ukraine, soldiers in the city of Mariupol fear that pro-Russian separatists may be getting ready to attack. The separatists must take or encircle the city if they wish to gain land access to Crimea, which was annexed by Russia early last year. But Ukrainian forces, many of them volunteers, say they are determined to defend it. Patrick Wells reports from Mariupol.
Video

Video Moscow Restaurants Suffer in Bad Economy, Look for Opportunity

As low oil prices and Western sanctions force Russia's economy into recession, thousands of Moscow restaurants are expected to close their doors. Restaurant owners face rents tied to foreign currency, while rising food prices mean Russians are spending less when they dine out. One entrepreneur in Moscow has started a dinner kit delivery service for those who want to cook at home to save money but not skimp on quality. VOA's Daniel Schearf reports.
Video

Video US, Cuba Report Progress in Latest Talks to Restore Ties

The United States and Cuba say they have made progress in the second round of talks on restoring diplomatic relations more than 50 years after breaking off ties. Delegations from both sides met in Washington on Friday to work on opening embassies in Havana and Washington and iron out key obstacles to historic change. VOA’s Mary Alice Salinas reports from the State Department.
Video

Video Presidential Hopefuls Battle for Conservative Hearts and Minds

One after another, presumptive Republican presidential contenders auditioned for conservative support this week at the Conservative Political Action Conference held outside Washington. The rhetoric was tough as a large field of potential candidates tried to woo conservative support with red-meat attacks on President Barack Obama and Democrats in Congress. VOA Political Columnist Jim Malone takes a look.
Video

Video NYC's Restaurant Week: An Economic Boom in Fine Dining

New Yorkers take pride in setting world trends — in fashion, the arts and fine dining. The city’s famous biannual Restaurant Week plays a significant role in a booming tourism industry that sustains 359,000 jobs and generates $61 billion in yearly revenue. VOA's Ramon Taylor reports.
Video

Video Brookhaven at Cutting Edge of US Energy Research

Issues like the Keystone XL pipeline, fracking and instability in the Middle East are driving debate in the U.S. about making America energy independent. Recently, the American Energy Innovation Council urged Congress and the White House to make expanded energy research a priority. One beneficiary of increased energy spending would be the Brookhaven National Lab, where clean, renewable, efficient energy is the goal. VOA's Bernard Shusman reports.
Video

Video Southern US Cities Preserve Civil Rights Heritage to Boost Tourism

There has been a surge of interest in the American civil rights movement of the 1950s and '60s, thanks in part to the Hollywood motion picture "Selma." Five decades later, communities in the South are embracing the dark chapters of their past with hopes of luring tourism dollars. VOA's Chris Simkins reports.
Video

Video Deep Under Antarctic Ice Sheet, Life!

With the end of summer in the Southern hemisphere, the Antarctic research season is over. Scientists from Northern Illinois University are back in their laboratory after a 3-month expedition on the Ross Ice Shelf, the world’s largest floating ice sheet. As VOA’s Rosanne Skirble reports, they hope to find clues to explain the dynamics of the rapidly melting ice and its impact on sea level rise.
Video

Video Lao Dam Project Runs Into Opposition

A Lao dam project on a section of the Mekong River is drawing opposition from local fishermen, international environmental groups and neighboring countries. VOA's Say Mony visited the region to investigate the concerns. Colin Lovett narrates.

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More