Iran: Why rejection of Rouhani's budget is a bigger battle than it seems

New Delhi, IndiaEdited By: Gravitas deskUpdated: Feb 03, 2021, 11:09 PM IST


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In Iran, the hard-liners in parliament have rejected President Hassan Rouhani's draft budget proposal

In Iran, the hard-liners in parliament have rejected President Hassan Rouhani's draft budget proposal. They say it will lead to financial ruin but beyond some technical differences - this is a battle of ideologies. There's an election coming up in Iran, and conservative parties are hoping to win the presidency. It's a high stakes battle that will have implications in the whole of West Asia especially on the Iran nuclear deal which is hanging on by a thread.

A moderate president and a hard-line, conservative parliament conducting legislative business in Iran is not easy. With elections due in June, tensions are running high. On Tuesday - the two sides clashed over the annual budget. Out of 261 lawmakers, 148 rejected Rouhani's budget, while 99 supported it. This back-and-forth has been going on for some time now as the budget was first introduced in early December. Conservatives say the plan is unrealistic, and that it will run up a deficit and worsen inflation.

A key concern is the projected oil sales, as the government believes it can raise 8.1 billion dollars from oil. Critics argue that with Trump-era sanctions still intact, this projection is not achievable. Rouhani's government has a two-week window to tweak the budget and send it back to parliament.

If the impasse continues - Iran will have to pass a temporary budget, which is not an ideal situation in an economy crippled by sanctions. The logjam over the budget is symbolic of Iran's larger political divide. Conservatives already control the parliament and the judiciary and are likely to win the presidency in June and this could have major implications on the nuclear deal.

Joe Biden has signalled his willingness to talk but he wants Iran to rejoin the deal - before lifting sanctions. Tehran wants sanctions lifted before the deal is restored. Rouhani is willing to give diplomacy a chance, but his successor may not. Conservatives have traditionally opposed the nuclear deal.

They reject talks with the West - A position that has strengthened after the assassination of Qasem Soleimani and Mohsin Fakhrizadeh. Rouhani is under pressure both from within Iran and the international community. Regional powers - including Saudi Arabia see a role for themselves in an expanded nuclear deal. But the president has ruled out any changes in the deal's terms. "Take it or leave it" was Rouhani's message.

"This agreement is not something that was easily achieved. This is the agreement. If they want it, everyone comes into compliance. If they don't, they can go live their lives", Rouhani had said. West Asia will be watching the upcoming polls closely, and a conservative takeover could define regional politics for years to come.