Iranian parliament taps oil fund for $465 million

31 Jan, 2005

Iran's parliament on Sunday approved the withdrawal of $465 million from the country's rainy day oil fund for allocation to security forces and the poor and disabled. Oil revenues in excess of budgeted amounts go into the Oil Stabilisation Fund (OSF) which has swelled to more than $10 billion in the last year as world crude prices flirt with record levels.
The fund is supposed only to be tapped to fund major capital investments or if oil revenue falls below budgeted targets.
Reformist allies of President Mohammad Khatami's government criticised conservative lawmakers, who now hold a majority of parliamentary seats, for the latest withdrawals.
"The fund was originally established to boost production, employment and investment ... Don't you see scores of jobless people in our provinces?" said reformist MP Hossein Afarideh, who voted against the legislation, in a debate broadcast live on state radio.
Out of the $465 million total, $120 million will go to the basij militia, a volunteer reservist army, $130 million to war veterans, $100 million to buy new equipment for the police and $115 million for low-income families and the disabled.
Afarideh argued Iran could set up 30 medium-sized factories with the amount.
"We accept there is an unemployment problem, but we think security is also important," conservative MP Iraj Nadimi said in favour of the legislation.

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