Iranian President Mohammad Khatami on Wednesday presented the final budget of his four-year term, amid strong conservative criticism over his handling of the economy, as he readies for a possible re-election run next year.
Khatami told parliament the record 135 trillion rial budget, worth $45 billion at the official exchange rate, would pave the way to making the Iranian currency fully convertible on the international market. The figure marks nearly a 25 percent rise over the current year.
The bill, subjected to extended debate and modification by parliament in the coming weeks, foresees $22.8 billion in oil revenues for the next Iranian year from March 2001 to March 2002. It sets the price of crude, which still accounts for almost all of Iran's hard currency revenues, at $20 per barrel, well below the current rate for Iranian crude around $29.
The plan also forecasts annual growth to continue at the current rate of five percent for the next year, a full percentage point below the minimum set in Khatami's five-year development plan for March 2000-March 2005.
He said expenditures for defense and security would be raised by 22.1 and 43 percent respectively but did not give specific figures. The reformist president shrugged off conservative charges that he has made no progress in repairing the economy since his 1997 election.
"Contrary to the claims of the government's opponents, the economy is running well despite the problems faced by poor families and the disadvantaged," he told the legislature. "We are on the right road and hope in the next few years to transform the rial into a stable and convertible currency on the international markets," he said.
But despite his moves towards privatization in a bid to repair the nation's struggling economy, Khatami underlined that the government would maintain more than a billion dollars in subsidies for basic foodstuffs.He repeatedly insisted that his main goal for the next budget was to bring spiraling inflation and unemployment under control.
Khatami's government has come under heavy fire in recent weeks after the central bank released a flood of petro-dollars onto the parallel exchange market, pushing the dollar below 8,000 rials for the first time in more than a year.
Conservatives, who have strong political support among the nation's vast network of traditional bazaar merchants, have denounced the move as a blatant re-election ploy ahead of the presidential polls in May. They have also accused the government of not using the huge current budget surplus, created after the last budget forecast crude revenues at a low $13.80, to fund more social and educational programs.
The conservative Tehran Times blasted Khatami on Wednesday, saying his three-and-a-half years in office so far had "almost shattered" the hopes of the people. "Due to the misguided economic policies of the administration and a lack of adequate attention to the underprivileged strata, the social gap between the poor and the rich has even widened," the paper charged. — (AFP, Tehran)
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)