REF/RL (photos by ISNA)
Iranian President Mahmud Ahmadinejad has
presented his draft annual budget to parliament, telling legislators that
"special attention" has been paid to reducing Iran's dependence on oil revenue
but offering few details. Iran's economy relies heavily on oil exports, which
supply 40-50 percent of budget revenues.
Ahmadinejad presents the budget
to Parliament Speaker Ali Larijani
Ahmadinejad did not give the overall size of the
budget, only noting that there was "nothing complicated or untransparent" about
The Iranian president's proposal, however, is nothing short of ambitious. Within
the framework of a larger five-year plan, the budget anticipates that Iran's
economy will grow at nearly a double-digit rate.
"I hope that with the coordination and sympathy that exists among lawmakers, the
government, organizations and the people during the five-year development plan,
with growth of 8 percent, Iran's economy can become one of the leading economic
powers in the region and the world," Ahmadinejad told legislators.
According to official figures, economic growth in
Iran reached only 2.5 percent in 2009, amid a global slump.
Rahim Membini, the president's deputy in charge of Iran's budget affairs, told
the official IRNA news agency that the budget was based on a target oil price of
around $60 per barrel. World crude prices are currently hovering around $75 per
High oil prices in recent years have brought in a windfall for the Iranian
government, but critics accuse the authorities of squandering the money.
Ahmadinejad said controversial plans to phase out subsidies on energy and staple
foods, which were approved by Iran's Guardians Council earlier this month, will
go ahead starting in the next budget year.
The government hopes to save up to $100 billion
over the next three to four years, as it lifts price controls on petroleum
products, electricity, water, wheat, milk, rice and fertilizer -- to name just
some of the key goods whose consumer prices are currently kept artificially low.
Gasoline costs the equivalent of just 10 cents a liter for Iranians, one of the
lowest prices in the world.
The Iranian president told parliamentarians that annual inflation would drop to
5 percent as a result of the subsidy cuts. He did not explain.
Annual inflation officially stands at 13 percent
in Iran, although independent economists say the actual rate is higher. Those
economists have forecast that in the short term, lifting price controls will in
fact send inflation shooting upward, rather than reduce it. It could prove a
volatile mix amid continued unrest over June's contested presidential election.
The budget requires approval of the parliament and a constitutional watchdog
before it can go into effect. The Iranian New Year begins on March 21.
More Nuclear 'Good News'
Also today, speaking separately to reporters in parliament, Ahmadinejad promised
an announcement next month about further advances in Iran's controversial
"We will soon have good news over production of 20 percent enriched fuel,"
Ahmadinejad said. "As well as this, there is news about the country's recent
achievements in science and technology -- issues which will make the Iranian
nation and other independent nations happy."
The United Nations' atomic watchdog, the
International Atomic Energy Agency (IAEA), has offered Iran a proposal under
which most of Iran's low-enriched uranium of 3.5 percent would be sent abroad in
one batch for further enrichment and then returned to Tehran as nuclear fuel,
obviating the need for Iran to continue enriching its own fuel.
Enriched uranium of 20 percent purity can be used as fuel to power nuclear
But Iranian officials have offered a counterproposal of a phased fuel swap and
Foreign Minister Manuchehr Mottaki gave the IAEA an end-January deadline to
accept the Iranian plan.
World powers led by Washington oppose Iran enriching its own uranium as they
fear the program could eventually be used to make the fissile core of an atom
Three sets of sanctions have already been imposed on Tehran over its nuclear
program and the United States and its allies have indicated it may be time for a
fourth, although Russia and China for now oppose such plans.
Tehran says its nuclear program is aimed solely at generating electricity.
Copyright (c) 2010 RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036. www.rferl.org
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