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Iran's Budgets Are Fiction

(Washington Institute for Near East Policy) Patrick Clawson - On Feb. 27, the International Monetary Fund released its annual report about the Iranian economy. Buried in the report's supplement is the following: "Non-central government agencies can commit government funds (e.g., through public guarantees) and shift the cost of these commitments to the central government, who then fund these obligations. Moreover, there is no system to record these commitments or monitor arrears." Note the present tense in those sentences. The Rouhani government has no control over institutions that report directly to Supreme Leader Ali Khamenei - the Islamic Revolutionary Guard Corps (IRGC), clerical foundations, and other such entities that can incur major debt for which the government is then liable. In other words, the Iranian government does not even know about, much less control, much of the country's spending, and the main international agency responsible for evaluating Tehran's fiscal policy is glossing over this massive problem. The writer, director of research at The Washington Institute, previously worked as a senior economist at the IMF and World Bank.
2017-03-17 00:00:00
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