Iran’s Parliament Research Center has proposed a roadmap to help wean the economy away from oil revenues by making better use of the nation’s abilities and potential for raising income and reducing expenditure.
The plan is of particular importance because for decades oil revenue has been the lifeblood of Iran’s economy now saddled with more than its fair share of problems, not to mention the burden of the unending US sanctions.
The RC approaches the chronic state of economic affairs from two perspectives: The first involves measures to zero the role of oil revenues in national budgeting. This, however, does not imply zeroing crude oil exports.
The second delineates measures to neutralize the impact of potential decline in oil exports (even zero) on the balance of payments and possibly forex reserves.
Minus oil revenues in its entirety from the current fiscal budget’s general revenues, the country will face a budget deficit of 1,000 trillion rials ($8 billion) which the RC says is not big enough given the existing economic capacities.