Budget plan reveals Iran’s shifting priorities in foreign policy

Iran’s proposed budget for next year, in the face of a shrinking economy, reflects its Foreign Ministry’s diminished role in critical political and economic aspects of foreign policy.

al-monitor Iranian Foreign Minister Mohammad Javad Zarif attends a press conference about a meeting of the Syria constitution-writing committee, Geneva, Switzerland, Oct. 29, 2019. Photo by FABRICE COFFRINI/AFP via Getty Images.

Dec 24, 2019

Iran's parliament is studying a proposed budget for the next fiscal year amid an extremely tight economy suffering under intense US sanctions. One important aspect of this proposal is Foreign Ministry funding, which has been under increased pressure from both proponents and opponents of President Hassan Rouhani’s administration.

Rouhani’s critics argue that Foreign Minister Mohammad Javad Zarif has been focused exclusively on repercussions of the US exit last year from the 2015 nuclear deal and subsequent sanctions on Iran, and has neglected other important aspects of foreign affairs.

For instance, Ahmad Sobhani, Iran’s former ambassador to Mexico, believes the ministry has been held hostage by the issues surrounding the deal, known as the Joint Comprehensive Plan of Action (JCPOA).

Rouhani’s proponents, however, argue the ministry’s influence has been downgraded in Iran’s foreign policymaking. Mohsen Aminzadeh, who was deputy foreign minister during Mohammad Khatami’s presidency (1982-1992), asserted recently that the main problem with Iran’s current foreign policy is rooted in that weakened role.

It’s fair to say most Iranian analysts agree the Foreign Ministry should have a more influential role in easing current political and economic difficulties.

It’s interesting to examine the ministry’s near-term priorities, and how the budget for the next fiscal year, which begins March 20, compares with this year’s.

Iran has its hands full in both multilateral and bilateral relations.

First, Iran’s diplomatic maneuvering in international and regional organizations should be a critical mission for the Foreign Ministry, especially with the intensive effort by the United States to isolate Iran. In recent weeks, even some European countries have been looking hard at Iran’s nuclear and missile activities.

One of the ministry’s most critical responsibilities is to launch a political and legal campaign aimed at international institutions such as the UN, EU and International Atomic Energy Agency (IAEA) to prevent an international consensus against Iran, especially with some newly elected officials such as the IAEA secretary-general and the EU high representative. Tehran also needs to actively engage institutions such as the Eurasian Economic Union and OPEC to find ways to circumvent tough US sanctions on the Iranian economy.

Second, regarding bilateral ties, the Foreign Ministry should consider political and economic issues its priorities. In the political arena, the ministry should attempt to revitalize Iran’s relations with some key players in Europe such as the United Kingdom, France and Germany. It’s worth noting that rebuilding bilateral relations with a non-EU United Kingdom would be an important endeavor in the near future. It’s also important for Iran to strengthen its fragile relations with neighbors like Iraq, Lebanon, Oman, the United Arab Emirates and even its longtime nemesis Saudi Arabia. 

As for the economy, improving economic and legal diplomacy with Russia and some Asian partners, such as China, Japan and South Korea, is critical.

In sum, Iran’s Foreign Ministry faces a heavy burden to not only prevent the formation of international animosity against Iran, but also to rebuild relations with neighbors and big players to reframe the political and economic relations in the context of the US policy of ongoing maximum pressure against Iran. This challenge requires significant financial resources.

Will the proposed budget accommodate the ministry’s mission?

Generally speaking, the proposed budget for the ministry’s next fiscal year is about 25 trillion rials ($750 million), or 17% more than the current year. However, more specific analysis shows that the budget devoted to promoting international economic cooperation would be less than 5% of the ministry’s whole budget.

The budget for Iran’s membership fees in international organizations like the UN would more than double to 4 trillion rials. The ministry’s budget for the affiliated Center of International Relations Education would decline 12%, and funds for emergent financial necessities of Iran’s representative bodies in other countries would dive from 250 billion rials to zero.

Another important change is that funds would be eliminated for construction/reconstruction of Iran’s diplomatic buildings like embassies and consulates in Herat, Afghanistan; Damascus; Manila; and other places. The budget also calls for eliminating money for promoting international relations and public diplomacy, and for the program that takes advantage of international organizations for Iran’s national development.

In contrast, funding for developing information technology would grow dramatically, from 10 billion rials to 150 billion rials. It is also worth noting that human rights support for the Iranian diasporas and getting them involved in the process of national development would grow 32%.

In the wake of structural reform in the Foreign Ministry, separate items for managing political relations with the United States, Europe, Asia and the Middle East would be merged into: political and security agreements, multilateral and bilateral relations, and interaction with international organizations. The budget for the merged items would grow from 5.05 trillion rials to 6.1 trillion rials.

The changes would have other implications as well: 

  • Despite the immediate need for rebuilding Iran’s weakening soft power, especially in the Arab world, the budget for public diplomacy would be omitted. This could deteriorate Iran’s public image and deprive the republic of its legitimate interests in countries around the region. 
  • While it is urgent for Iran to develop its economic relations and links with other countries, the budget for international economic cooperation would be less than 0.5% of the whole Foreign Ministry budget. This would greatly limit the ministry’s ability to counter US economic sanctions. 
  • Expanding the budget for supporting Iranian human rights around the world means that Iran probably would intensify its efforts to follow up on the situation of Iranian prisoners in other countries, like the United States. Therefore there could be more prisoner exchanges.
  • Attracting the Iranian diaspora to help in Iran’s national development could mean some new challenges between the Foreign Ministry and other security institutions in Iran regarding the security verification of Iranians with dual citizenship who return.

In sum, soft power, public diplomacy and international economic cooperation can be considered Iran’s current priorities, though they have been marginalized in the proposed budget. Instead, more financial resources would be redirected toward Iran’s membership fees in international organizations, IT infrastructure in the Foreign Ministry and supporting human rights of the Iranian diaspora.

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