Conversation with Simin Rouzgar

Dr. Ali Diniterkamani, a graduate in the field of economic development from the University of Tehran, is currently an assistant professor at the Institute of Commerce Studies and Research. Over the past two decades, in addition to ten books and one hundred articles authored or translated by Dr. Diniterkamani have been published.

This prominent institutionalist economist, in a brief conversation with the peace line regarding the 97 budget bill, while mentioning that “at least 30% of the country’s budget belongs to miscellaneous items”, says: “There is no effort in the budget to reduce socially unproductive expenses. The reality is that the internal mechanism of Iran’s political economy, within the framework of the principle of dependence on the past path, reproduces itself. Therefore, without fundamental changes in this mechanism, there is no possibility for significant changes in budget construction.”

Ali Dini Turkmani also admits to the allocation of large budgets to religious-propaganda institutions, saying: “Such institutions are part of the official power structure. They have power and therefore do not allow their share to be reduced.”

How transparent do you consider the 97 budget proposal presented by the government to the parliament compared to previous similar proposals?

The 97 budget was more transparent in terms of allocation to different organizations and institutions. With the leakage of information regarding allocations, it became clear how much each organization received. However, it was also revealed that at least 30% of the country’s budget belongs to miscellaneous categories.

Dear Dr. Dini, where do you think the strength of this bill lies?

The budget, within the framework of the principle of “dependency on the past path”, reproduces itself. Deficits and allocations continue to follow the same pattern as in the past. There have been no significant changes in either income or expenses. The only change in this budget has been the public disclosure of the shares of different institutions and organizations.

What are the biggest weaknesses that can be criticized?

In terms of income, there is still a reliance on oil revenues and direct taxes. However, in direct taxes, the tax on wealth has a negligible share. In terms of expenses, what I have called the “nested you” has caused the budget institutions and entities to become much more than necessary. As a result, expenses are actually excessive for this reason. Therefore, gradually, the share of consumption expenses has increased and the share of development expenses has decreased.

Resistant economy is emphasized by national officials in simple terms, what is it and can you see any signs of it in the proposed bill?

The term “resistance economy” emerged in the field of economics and policy-making in 2011 following the imposition of sanctions. During world wars, this term existed in countries involved in the war and it is natural that it should exist. In times of war or quasi-war sanctions, economic conditions change and economic policies must be adapted accordingly. Food rationing is one of these policies. Currency rationing is another. Import restrictions as well. However, in the budget, there is no effort to reduce non-socially productive expenses. The reality is that the internal political economy of Iran, within the framework of the principle of “dependence on the past path”, reproduces itself. Therefore, without fundamental changes in this mechanism, the possibility of serious changes in budget construction does not exist. One of these changes is the correction of the tax system, which faces pressure from the wealthy. Another is the reduction of non-socially productive expenses, which faces pressure from interest groups.

One of the criticisms of the government was the allocation of large budgets to religious-promotional institutions. Why do you think Mr. Rouhani couldn’t reduce these budgets and instead invest more in expected areas such as welfare or infrastructure?

Such institutions are part of the formal power structure and have their own power, so they do not allow their share to be reduced. The economic sphere, as well as the bargaining power of various forces and social groups, is divided over the share of the budget and the wealth produced. It is natural that any social force with a higher hand will have a larger share.

Thank you for the opportunity you have given us.