According to Khabar Online, the compilation of the 1406 budget begins in a situation where Iran’s economy is facing a series of uncertainties about the future of war, sanctions and the state of government revenues. In such a situation, one of the most important questions is with what assumptions the government should adjust the resources and expenses of the next year and to what extent it can hope to realize the predicted revenues.
The experience of the past years has shown that the gap between the projected revenues and the actual resources has repeatedly pushed the government to emergency reforms and providing resources from outside the original budget framework. In an interview with Khabar Online, Mohammad Hossein Memarian, head of Amirkabir University’s Policy and Economics Studies Center and macroeconomic analyst, listed the four main priorities for drafting next year’s budget; Priorities that include realism in predicting incomes and livelihood support for households, paying attention to employee rights and revising the government’s investment plans.
Mohammad Hossein Memarian, Head of Policy and Economics Studies Center of Amir Kabir University, believes that the most important requirement of the 1406 budget is to compile it based on different scenarios and in accordance with the economic and political realities of the country. According to him, the government should include the possibility of the continuation of the war and the siege as well as the possibility of the end of these conditions in the main assumptions of the budget so that it does not have to make emergency reforms in the middle of the year.
Referring to the experience of budgeting in the past years, Memarian said in an interview with Khabar Online: The most important requirement of the 1406 budget is that this document should be written based on possible scenarios. In the last decade, in many years, the compiled budget and even the approved budget did not correspond much with the realities of the country. For example, during the years of tightening sanctions, the budget was adjusted as if a significant amount of oil was to be sold, but in practice the predicted oil revenues did not materialize.
He continued: As a result of this inconsistency, the government was forced to provide the necessary budget resources during the financial year by obtaining permits from the heads of the three powers and using other solutions. While for financial planning, the most important issue is that budget assumptions are set based on realistic scenarios.
Budget 1406 It should have a scenario for the continuation of war and siege
Emphasizing the need to pay attention to the political and economic conditions of the next year, this macroeconomic analyst said: It is clear that the possibility that the siege may continue in the next year or even the possibility of a new aggression should be considered. These issues should be seen in the main components of the budget, including oil revenues and other government resources.
Memarian added: In my opinion, at least two main scenarios should be considered in the budget; One scenario is based on the continuation of the war and siege and another scenario is based on the end of the war and sanctions. If the budget is adjusted without considering these two different situations, we may have to take action again in the same financial year to organize the resources and expenses of the government.
Livelihood support should be one of the main priorities of the government
Furthermore, he considered supporting vulnerable households and the lower classes to be the second most important priority of next year’s budget and stated: Considering the significant increase in prices, especially in the food sector, paying attention to the livelihood of the households that have suffered the most is doubly important.
Referring to the increase in the support of Kalabergi, this university professor stated: Although the government has increased the amount of Kalabergi to some extent and this support has increased by 50%, it should be considered that we will probably need the continuation of these supports in the next year as well. Therefore, the provision of necessary resources for livelihood assistance should be included in the budget from the beginning.
Mamarian emphasized: It is a mistake to imagine that we will not need new resources for livelihood support in the next year. It may even be that one of the main priorities of the government in front of the society is to provide these livelihood aids.
increase insignificant The rights of employees cannot be defended
This macroeconomic analyst considered paying attention to the living conditions of the government employees as the third priority of the 1406 budget and said: the government should provide for the salaries of the employees in the budget anyway. Perhaps in the conditions of war and siege, it is difficult to expect salary increases in line with inflation, and it is not possible to achieve significant increases in these conditions, but at least the livelihood of government employees should be taken into consideration and no decision should be made that will put their lives in more danger.
Pointing to the possibility of using alternative solutions to compensate part of the living pressure of employees, he added: You can even go for solutions that do not necessarily mean a direct increase in salaries. For example, a part of the compensation of employees with higher salaries can be considered in the form of government bonds so that they can benefit from the interest of these bonds and the principal will remain for the post-crisis period. It is also possible to check the possibility of allocating a share of government assets to some of the employees.
Referring to the difficulty of raising salaries commensurate with inflation in the current situation, Memarian said: it should be kept in mind that the country is in a year of war and raising salaries as much as inflation, i.e. about 80%, is a difficult task; But on the other hand, increasing salaries by 10 or 20 percent is not the right decision and doubles the living pressure on employees.
The necessity of revising construction plans and government investment priorities
Mamarian considered the fourth priority of the 1406 budget to be the compilation of a document for prioritizing the investment costs of the government and state-owned companies and said: the government should determine in which areas the investment resources should be spent. This prioritization should be updated continuously. Unfortunately, the lack of such a document has always been felt, but in the conditions of war, when the government is facing more restrictions and financial pressure, the importance of this issue doubles.
He continued: The government should determine which projects are really priorities. It is not necessary to continue to inject funds into projects for which resources have already been allocated. Also, it is not necessary to provide financial support to all construction projects. In this situation, a serious review should be done and resources should be directed towards investments that are most compatible with the goals and needs of the country.
Emphasizing the necessity of focusing the government’s limited resources on solving the main knots of the country, this university professor stated: Investments that can solve the most important problems of the country should be prioritized. For example, in the social sphere, projects such as water supply to areas that have always faced water supply problems are very important. In areas where the infrastructure has been destroyed, reconstruction should be prioritized; Especially in areas such as health where the continuity of their services is very important.
In the end, he noted: the reconstruction of an industrial project can also be prioritized over half-finished projects from different aspects. Therefore, in the conditions of limited resources, instead of distributing resources among all projects, the government should choose the plans that have the most necessity and impact for the economy and society.
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