Massoud Nili, then, explained about three types of governments in oil-rich countries and noted, "Some countries are dictatorships where one person rules all. An example is Saudi Arabia where King Abdullah decides how oil revenues should be appropriated. In personal or group democracies, one person heads the government. Also, a four- or even an eight-year government like that of Khatami, mostly thinks about its own problems and basic reforms are left to next governments. In party democracies, where there are democrats, republicans, social democrats, Christian democrats and other forms of political parties, performance of a party regardless of who heads the government is usually assessed."

Nili added, "In our country, people elect one person through their votes and the government is usually concerned about basic programs and cares less about improving subsidies, gasoline price, or crediting more money to the Oil Stabilization Fund. Five-year economic development plans usually leave improvement of subsidies or fuel price to later years, but every government thinks about its own problems and uses financial resources to fill the gaps without accepting the costs of a logical economic decision. Therefore, decisions have been made to improve the fuel price for 15 years, but no government has been ready to pay the price."

Nili stipulated that in countries where oil revenues are lacking, a wrong decision like devaluating a foreign currency will face the government with a real crisis because the government is not endowed with windfall benefits.

"In Iran, on the contrary, if foreign exchange rate is held down for five years, exports are reduced and imports are encouraged, or if price of gasoline and fuel is kept down leaving the government with billions of dollars in budget deficit, the gap would be easily filled using petrodollars," he added.

Former deputy head of Management and Planning Organization for economic affairs also stated that in 1999 and when the war with Iraq was over, the government was facing a budget deficit of 53 percent and the government was short of resources to keep dollar parity at 70 rials while its parity on the market was 30 times higher. "Few cars were produced and sold to people by drawing lots and both the quality and quantity of goods were low. Therefore, encouraging changes in pricing policies seemed to be necessary in order to goad domestic production."

Nili added, "As long as the pricing system, foreign exchange rate, subsidies, fuel price and so on, have not become more rational, building institutions won’t be easy because optimal performance of parties and media, investments, and correction of regulations should be implemented after the pricing system is corrected.

"When liquidity expands due to incorrect policies and inflation worsens, people and politicians blame businesses, but it should be noted that in the past year and next year’s budgets, only 34 percent of government expenses are covered through real revenues and the remaining 66 percent would be covered by oil revenues. Therefore, low resilience of money, labor, and capital markets worsens inflation. The Central Bank of Iran has not been setting monetary policies for years, but its British counterpart regulates liquidity, and monetary transactions among banks are handled through the private sector."

Former deputy head of Management and Planning Organization for economic affairs further noted that after 2005, economic phenomena similar to those which occurred between 1973 and 1977 were repeated and unprecedented growth in oil revenues and government’s expenses in addition to inefficient economic system caused the government’s current expenses to treble in three years.

He added that if the current trend continued until 2011, the general budget will add up to 14000 billion rials, leaving the government with a deficit of 9,000,000 billion rials, which should be covered through oil revenues. "If oil prices do not shot as high as 120 dollars per barrel and begin to fall due to global stagnation, it is not clear how the budget deficit is to be covered."

Nili stated that increased oil revenues caused a country, which earned 2.5 billion dollars on a population of 30 million before 1973, to get close to 50 billion dollars in imports while the general budget is near 800,000 billion rials and economic mistakes are kept hidden by spending oil revenue.

"The budgets that are drawn up by governments cannot be implemented through financial discipline and every year, more supplements are presented. Instead, the government should pay more attention to making policies for the money market and pay more attention to financial issues and foreign exchange rate to make suitable conditions for those who were born between 1981 and 1986."

Mohammad Khoshchehreh, who represents Tehran at the Iranian parliament (Majlis) and is a member of Majlis Economic Commission, noted that the most dire problem faced by the Iranian economy is the government’s near absence in those areas where it should be active and its overwhelming presence where its presence is not really needed.

"Instead of being active in infrastructural fields like transportation and power generation, our governments pay more attention to business and this has disrupted the country’s development course," he added.

The MP noted that since 1995, the Supreme Leader and many high ranking officials have emphasized on weaning the economy from oil revenues and noted that Iran is capable of turning into top economic power of the region, but the country’s economic growth rate during the past three years has been even lower than neighboring countries and the gap with Turkey has widened.

"According to the Constitution, the government is responsible for regulating housing price, but it has practically let go of housing and land policies and, therefore, housing prices are not controlled by the state…. It is a duty of governments to meet people’s basic needs, but when 70 percent of people’s income is spent on housing and the remaining 30 percent on consumer goods, neither producers nor retailers are hopeful about prosperity of their businesses," he said.

Khoshchehreh added that the government has given up housing sector while companies affiliated with the government are active in other fields and this has led to isolation of the private sector.

"Share of taxes in revenues of advanced countries stands at 98 percent and, therefore, they are sensitive to economic prosperity. However, achieving a higher economic growth rate is a political goal in Iran and is highly dependent on oil. It is not clear until when it can be used as leverage to prove a government’s success in economic fields," he said.

The MP added that Iranian governments try to prove that they are more efficient by spending their financial resources while economic principles stipulate that the governments should choose long-term goals, not populist and short-term ones.

"The government seeks to increase its earning even through privatizing state-run companies in line with Article 44 of the Constitution ignoring the fact that such an approach to privatization is like a poison," he opined.