Iranian Regime’s Use of Public Funds to Maintain Power: Insights from the National Council of Resistance of Iran

economy, political theater">
news">
October 9, 2024

Iran‘s Budgetary System Exposed as a ‘Ritual of Deception’

Tehran – A damning report reveals that Iran’s national budget operates more as a facade than a functional financial plan, masking widespread corruption and exacerbating economic struggles for millions of Iranians. Recent admissions from a state-run newspaper expose a system where a considerable portion of allocated funds simply vanish, diverting resources away from vital public services.

The Illusion of Funding

According to a report published by Khorasan State on October 5th, the budgetary process in Iran has devolved into a “ritual of deception.” The newspaper detailed that for decades, national plans have been designed without genuine intent for implementation, and a mere 60% of approved funds ever reach their intended destinations. This represents a systemic failure, transforming the budget from a roadmap for growth into a symbolic document used to maintain appearances.

Billions Diverted Through Opaque Networks

The Khorasan State report highlights a substantial discrepancy between claimed allocations and actual disbursements. While the government proclaims a national budget of 600 trillion tomans, only 350 trillion tomans are reportedly utilized. The remaining hundreds of trillions are absorbed by a network of unaccountable entities, including military organizations and foundations affiliated with the ruling elite. This practice is not accidental, but a calculated maneuver to conceal corruption and facilitate the illicit transfer of public wealth.

Did You Know? A toman is a unit of Iranian currency; as of October 2024,1 USD is roughly equivalent to 50,000 tomans.

A System Designed for Self-Preservation

The Iranian regime, regardless of the governance in power, appears to prioritize the appearance of stability over genuine economic management. The annual budget has become a tool for simulating normalcy rather than addressing the country’s deep-seated economic issues. These so-called “development plans” are effectively formalized promises, routinely broken, serving as a bureaucratic veil for widespread corruption.

The Human Cost of Mismanagement

The consequences of this budgetary deception fall squarely on the Iranian people. Workers, teachers, pensioners, farmers, and unemployed youth are deprived of essential resources that could be allocated to healthcare, education, housing, and job creation. Instead, funds are channeled towards the regime’s security apparatus and the enrichment of those in power. The situation fuels widespread public frustration and economic hardship.

According to the World Bank, Iran’s inflation rate reached 41.2% in 2023, severely impacting the purchasing power of ordinary citizens. World Bank – Iran

budgetary Metric	Reported Allocation	Actual Disbursement	percentage Disbursed
Total budget	600 Trillion Tomans	350 Trillion Tomans	58%
funds Lost/Diverted	N/A	250 Trillion Tomans	N/A

Pro Tip: Understanding the interplay between oil revenue, political factions, and budgetary processes is crucial for analyzing Iran’s economic challenges.

A Political Weapon, Not a fiscal Tool

The national budget in Iran has been weaponized, functioning as a tool for political control and repression rather than a means of economic development. Broken promises and the purposeful impoverishment of the population serve to suppress dissent and maintain the regime’s grip on power. This systemic corruption threatens the long-term stability and well-being of Iran, with its wealth systematically drained to sustain an authoritarian system.

Understanding Iran’s Economic Context

Iran’s economic challenges are deeply rooted in a combination of factors, including international sanctions, mismanagement of oil revenues, and systemic corruption. The country’s reliance on oil exports makes it vulnerable to fluctuations in global energy prices. Sanctions, imposed due to its nuclear program, have further restricted its access to international markets and financial systems.This creates a challenging habitat for economic growth and enduring development.

Frequently Asked Questions about Iran’s Budget

• What is the primary issue with Iran’s national budget? The primary issue is that a significant portion of the allocated funds are not actually disbursed, leading to corruption and hindering economic development.
• Who benefits from the diversion of funds? regime insiders, military entities, and foundations loyal to the ruling elite benefit from the diversion of funds.
• How does this impact the Iranian people? It deprives citizens of essential resources for healthcare,education,and economic opportunities,leading to widespread hardship.
• What is the role of Khorasan State in exposing this issue? Khorasan State is a state-run newspaper that openly admitted the systemic failures within Iran’s budgetary system.
• Is Iran’s economy heavily reliant on oil? Yes, Iran’s economy is heavily reliant on oil exports, making it susceptible to global energy price fluctuations and international sanctions.
• What are the long-term consequences of this budgetary mismanagement? The long-term consequences include economic instability, increased social unrest, and a weakened state.

What are your thoughts on the implications of this budgetary deception for the Iranian people? Share your viewpoint in the comments below and share this article to raise awareness.

How does the Iranian regime’s control of off-budget funds impact openness and accountability in the allocation of national revenue?

The Systematic Diversion of Iranian National Wealth

The Islamic Republic of Iran has long been accused of prioritizing regime survival over the welfare of its citizens. A important component of this strategy involves the systematic diversion of public funds – derived from oil revenues, taxes, and other sources – towards entities and activities directly aimed at maintaining the ruling elite’s grip on power.The National Council of Resistance of Iran (NCRI) has been instrumental in uncovering and documenting these financial malfeasances. Understanding these mechanisms is crucial for anyone following Iran politics, human rights in Iran, and the broader Middle East geopolitical landscape.

Key Entities Benefiting from Misappropriated funds

The NCRI’s investigations consistently point to several key entities as primary beneficiaries of this financial manipulation:

* The Islamic Revolutionary Guard Corps (IRGC): The IRGC, a powerful paramilitary organization, receives a ample portion of the national budget, far exceeding its legitimate security needs.This funding fuels its domestic repression, regional interventions (in countries like syria, Lebanon, and yemen), and its extensive economic empire.IRGC funding is a central issue in understanding Iran’s internal and external policies.

* The Office of the Supreme Leader: Directly controlled by Ayatollah Ali Khamenei, this office commands vast financial resources, used for patronage networks, propaganda, and maintaining loyalty within the regime.

* The Basij Militia: This volunteer paramilitary force, loyal to the regime, receives funding for recruitment, training, and suppressing dissent.

* Foundations (Bonyads): These tax-exempt charitable foundations, ostensibly dedicated to social welfare, are largely controlled by the Supreme Leader and the IRGC. They operate as massive economic conglomerates, often engaging in illicit activities and diverting funds away from genuine charitable causes.Bonyad economic activity is a significant source of concern.

Methods of Financial Diversion

The Iranian regime employs a variety of sophisticated methods to siphon off public funds:

1. Off-Budget Funds: A significant portion of national revenue is channeled through off-budget funds, making it arduous to track and audit. these funds are often controlled by the IRGC and the Office of the Supreme Leader.
2. Corruption and embezzlement: Widespread corruption within goverment institutions and state-owned enterprises allows for the embezzlement of public funds. The NCRI has documented numerous cases of high-ranking officials and their families accumulating vast fortunes through illicit means.
3. Money Laundering: The regime utilizes complex money laundering schemes to conceal the origin of illicit funds and transfer them to foreign accounts.
4. Strategic Investments in Foreign Entities: The IRGC and Bonyads invest in foreign companies and real estate,often using shell corporations to obscure their ownership. This allows them to generate revenue and exert influence abroad.
5. Exploitation of Natural Resources: The regime exploits Iran’s vast oil and gas reserves, but a significant portion of the revenue is diverted to fund regime-linked entities rather than being invested in infrastructure or social programs. Iran oil revenue allocation is a key indicator of regime priorities.

The Impact on the Iranian People

The diversion of public funds has devastating consequences for the iranian people:

* Economic Hardship: The Iranian economy is in a state of crisis, with high inflation, unemployment, and poverty. The misappropriation of funds exacerbates these problems, leaving ordinary citizens struggling to make ends meet.

* Lack of Social Services: Funding for essential social services, such as healthcare, education, and welfare programs, is severely inadequate.

* Increased Repression: The regime uses its financial resources to strengthen its security apparatus and suppress dissent, leading to widespread human rights abuses.

* Environmental degradation: Lack of investment in environmental protection, coupled with corrupt practices, contributes to environmental degradation and resource depletion.

Case Studies: Documented Financial Misconduct

* Astaneh Quds Razavi: This religious foundation, controlled by the Supreme Leader, owns vast properties and businesses, generating billions of dollars in revenue. The NCRI has documented evidence of its involvement in illicit activities, including land grabbing