Wednesday, September 20, 2006

No Government Bonds Sold

Hamid Ahadi, Rooz Online:
One year after Mr. Ahmadinejad’s hardline government took the reigns of power in Iran, a report published by the Ministry of Economic Affairs shows that despite the government’s massive spending on winning over the public, inflation and rising unemployment continue people’s apprehensions whose leading effect has been that during the last five months, no government bonds have been bought by the public. READ MORE

The Ministry report indicates that not a single government bond - a normal income for a government and an indication of the confidence the public has in it and its future – has been sold during this period. This report comes at a time when just last week President Ahmadinejad again issued a decree for the sale of 20 billion Rials worth of government bonds to the public, as is the norm.

An economics specialist told Rooz that the reason why politicians had been recently expressing their concerns over the direction and pace of economic affairs of the country is because of the alarming reports that have been issued by professional groups that monitor the government’s economic performance and are submitted to senior government officials. This expert’s reference is to the remarks that Hashemi Rafsanjani, a former president, Majlis leader and current chairman of the State Expediency Council, recently made in criticizing the current policies. Sazemane Mojahedin Engelab Eslami, a political grouping that is considered to be part of the establishment too recently warned of the negative impacts of the governments pace of expenditure.

What has added to concern to the Majlis, the State Expediency Council and other non-government agencies is that official reports on the state of the economy are not submitted to them. Among recent reports that have caused concern in economic and political circles is an official one claiming that 60 percent of the development budget has been expended with. Economy professionals doubt these figures and a former head of the influential Plan and Budget Organization expressly challenged the number saying it was impossible to invest so much money in such a short time. Hamid Reza Shoraka said that not a single report on any development project in the country had been received by the Management and Planning State Agency (Sazemane Modiriyat va Barname-rizi). On the other hand, the government is preparing an amendment to the current budget that it plans to submit to the Majlis for approval. And in the absence of any performance or progress reports on development funds and projects, it seems unlikely that the Majlis would rubber stamp the bill.