Ahmadinejad presents next year's budget to parliament amid criticism over inflation

Says "government can't remain indifferent to (people's) expectation. We need to redistribute the oil money to the people."

Ahmadinejad 298.88 (photo credit: AP [file])
Ahmadinejad 298.88
(photo credit: AP [file])
President Mahmoud Ahmadinejad presented Iran's budget to parliament Monday, promising it would reduce soaring inflation and redistribute Iran's abundant oil revenues among the country's 70 million people. The unveiling of next year's proposed 2,710 trillion rial (US$285 billion) budget comes amid a sharp rise in inflation that has provoked fierce criticism of Ahmadinejad, not only from his reformist opponents but also from senior conservatives who helped bring him to power in 2005. "The government can't remain indifferent to (people's) expectation. We need to redistribute the oil money to the people," Ahmadinejad told a session of the parliament as he presented the budget to the legislature for approval. Ahmadinejad was elected on a populist agenda promising to bring oil revenues to every family, eradicate poverty, improve living standards and tackle unemployment. Now he is being challenged for his failure to meet those promises. Reformists and some fellow conservatives say Ahmadinejad has concentrated too much on fiery, anti-US speeches and not enough on the economy - and they have become more aggressive in calling him to account. The price of basic commodities has suddenly jumped since November. A kilogram (about 2 pounds) of chicken has increased 35 percent to US$2.44, and rice is up 43 percent, selling for US$2.12 a kilogram. Prices for fruit and vegetables have almost tripled in the past year, and housing prices have more than doubled since last summer. Recent Central Bank of Iran figures show the price of basic commodities and services in November increased 19 percent when compared to the same month last year and confirmed that overall inflation stood at 16.8 percent _ double the rate when Ahmadinejad took office. Independent economists and experts put the inflation rate well over 30 percent. The proposed budget bill for next year, which begins March 21 under the Iranian calendar, was presented to the conservative-dominated parliament before the crucial March 14 parliamentary elections, a vote seen as a referendum on Ahmadinejad's rule. It shows an increase of about 18 percent compared with the budget approved by the legislature for the current Iranian year, which ends on March 19. Outlining the budget, Ahmadinejad said the main direction of the spending plan is to "promote justice, create equal opportunities for the entire nation ... and reduce inflation." The budget must be approved by the 290-seat parliament and then ratified by the Guardian Council, a constitutional watchdog, before it becomes law. The parliament is expected to immediately begin debates on the budget and vote in mid-February before campaigning begins for the legislative elections. Ahmadinejad said the proposed budget has assumed a price of US$39.70 for each barrel of crude oil, a figure far below the current price of about uS$100. Lawmaker Ahmad Tavakoli said the assumed price for oil in the budget was apparently based on very conservative assessments that oil prices may fall next year.