Dr. Alireza Baradaran Shoraka, Economist

Head of the former Management and Planning Organization under the reformist government criticized dissolution of the organization by the ninth government and its reduction to a department under the president’s supervision. Referring to outcomes of the dissolution, he emphasized that absence of the Management and Planning Organization will have untoward consequences for the country. Alireza Baradaran Shoraka added, “Unfortunately, due to basic changes made to the organization, it has suffered a lot and has failed to fulfill its main duties. For example, the Fourth Economic Development Plan Act had projected that the Management and Planning Organization should prepare reports and documents for submission to the parliament on the performance of different government departments and organizations. After dissolution of the Management and Planning Organization, these tasks have been forgotten and occasional reports are presented to the parliament after a long delay.

Shoraka explained about problems resulting from absence of the Management and Planning Organization, saying, “This organization was, in fact, a secretariat for several high councils in our country.”

“We prepared reports and presented them to High Economic Council for specialized discussions. The Management and Planning Organization was one of the best specialized organizations in the world in terms of specialists it employed. Therefore, we were able to prepare reports on all issues which were discussed at those councils. The Management and Planning Organization drew up all kinds of reports and presented them to councilors to be discussed for decision-making. The High Administrative Council adopted important decisions on administrative and employment issues. After the Management and Planning Organization was dissolved, those councils were also dissolved and their duties were delegated to Majlis commissions. Of course, the Expediency Council is currently discussing this issue and MPs believe that those councils, which had been established according to the law, should be revived.”

Shoraka said, “The Secretariat of Board of Trustees of the Oil Stabilization Fund was established at the Management and Planning Organization and it drew up various reports to protect the reserves of the Oil Stabilization Fund. Funds drawn from the Oil Stabilization Fund by the ninth government exceeds those of the reformist government by a wide margin.”

Former head of the Management and Planning Organization also told Baran that oil reserves and the Oil Stabilization Fund are very valuable and should be taken advantage of in a good manner.

“Oil reserves should be used correctly, so that, they would be kept for future generations and should be used for productive investments. Unfortunately, since the Board of Trustees has been dismissed and its duties have been transferred to the government’s Economic Commission, a total of 5 billion dollars have been withdrawn from the fund thus far and it is said another 30 billion dollars will be drawn in order to cover next year’s budget deficit. They also say that 5 billion dollars will be withdrawn from OSF to be appropriated to industries and repayment of government loans to the banks in order to increase banks’ capital to 15 billion dollars. Unfortunately no attention is paid to the consequences of such decisions for the domestic economy both at present, and in future.”

Shoraka stated that the budget deficit is about 300,000 billion rials while the total budget is 450,000 billion rials. “Therefore, the deficit amounts to 60-70 percent of the total budget. If the Management and Planning Organization were there to formulate a rational budget bill, they would not have to declare such a big budget deficit in August. Absence of the Management and Planning Organization has had its negative impacts on different economic structures of the country.”

Shoraka added, “If they give statistics that Iran’s economic growth, excluding oil, is 7.7 percent; then the growth rate under the former governments should be also given after excluding oil. In 2003, the economic growth rate, excluding oil, stood at 7.9 percent. However, considering oil, it should be noted that Iran’s economic growth rate stood at 6 percent during the Third Economic Development Plan and currently stands at about 6.5 percent. When we achieved a growth rate of 6 percent during the Third Economic Development Plan, oil was sold for 15-16 dollars per barrel. During the past three years, every barrel of oil has sold at an average price of 85 dollars. Since I believe that 90 percent of our economy is dependent on oil, the growth rate during the past three years should have been much higher than 6.5 percent and should have hit 8.5-9 percent.

Therefore, the government should be held responsible for failing to use high revenues to fuel economic growth. At the same time, an average economic growth rate of 8 percent was an obligation according to the Fourth Economic Development Plan stipulations. The Management and Planning Organization played a very important role in long-term decision-making by officials and this was not limited to the government, because it actually helped all the three powers. After the Management and Planning Organization was dissolved efficiency of planning and budgeting systems has decreased and, at present, many Majlis deputies maintain that the budget deficit would hit 30 billion dollars during the current year.”