Leaders of Iran

Monday, December 27, 2004

Dr. Hassan Sobhani on the Budget January 2003

Iran International Magazine - On Agenda: "

In order to improve the structure of the national budget, politicians should approve of expert advice when drawing up the budget agenda – uninfluenced by political considerations.


Dr. Hassan Sobhani, Member of Parliament from Damghan and member of the Budget, Planning and Evaluations Committee of Parliament, believes that since budget deficit has always been one of government’s major problems, the 2003 budget forecast must carefully and correctly consider earnings and place emphasis on the reduction of the state’s current expenditure.

Since there are numerous unfinished construction projects, the completion of these must be expedited, especially in the area of water and agriculture.

"The budget management system must move in the direction of change and gradually come to possess fewer restrictions."
Other priorities which should be carefully considered for the 2003 budget include provision of state expenditure from tax revenues and prevention of borrowing either on the national level – through the distribution of stocks – or from international markets. Improvement in budget structure plays a central role in adjustment of the state budget and is not a matter which may be concluded by holding sessions on implementation of regulations, rather it must be resolved through expert assistance and consideration of economic and social realities.

Experts must understand the issues involved realistically and put forward their proposals within the framework of the budget. Politicians on the other hand are obliged to approve the proposals without bringing political issues into the picture.

State companies follow their own particular rules and regulations but when possible the state must hand over these companies to the private sector, and the companies that ought to stay within the government have to take a more defensive stance by being made more resourceful and structured through implementation of tougher regulations related to their financial organizations, improvement of efficiency and by taking a more active role in increasing their stock profits and tax payment.

To prevent budget deficits, the government earnings must be forecasted on a more pragmatic basis and there should be attempts to find new and sensible sources of income. The government must identify and utilize new and untapped tax resources – disregarded due to bureaucracy or other reasons. The current construction expenditure of the government must be classified and prioritized to help increase the state's general budget in line with realistic earnings – or if that is not the case reduce spending by abandoning low priority projects. In this way a logical balance can be achieved between earnings and expenditure and budget deficits will be avoided.

Currently, total expenditure is four times more than construction expenditure within the government’s general budget. Steps have to be taken to alter this imbalance in favor of construction expenditure.

Iran’s budget management system has been rigid and authoritarian in the past decades and it must change and get stripped of it restrictions. It must not allow the Iranian economy to be under state influence either. Rules and regulations must be enacted to prevent public savings from becoming available to state companies so that the government may gradually find its foothold and become capable of managing the economy of the country."

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