Ahmadinejad submitted his first annual budget to Iran’s parliament on January 15, 2006. This year’s budget (starting March 21) law is based on oil price of US$40 per barrel. The budget is approximately 195,000 billion rial, about 70% of which is devoted to government controlled areas. The budget was planned to oppose economic monopolies, and is the largest in Iran"s history with a 50% increase on the previous financial year, a change some of Ahmadimejad"s opponents describe as “disastrous.” Some Iranian MPs believe that even this extremely large amount of money will be insufficient to fulfill Ahmadinejad’s election promises.
2006-2007 budget proposals is to be an operational budget where funds would be devoted based on the outcome of an operation rather than dividing the budget among organizations.
He pointed to certain rumors being circulated of an impending increase in gasoline prices which, he said, tend to have a negative on society, saying the "plan to ration gasoline is not new and is still under discussion."
Having pegged his reputation on his ability to help the ordinary man, Ahmadinezhad faces serious problems: the economy is a mess, his policies are disastrous, and Iranians’ expectations are sky-high. The World Bank’s 2003 report about Iran noted, “Despite the growth in the 1990s, GDP per capita in 2000 is still 30 percent below what it was in the mid 1970s, compared with a near doubling for the rest of the world.” Iranians are galled to find that their country has slipped badly behind the Arabs on the south side of the Persian Gulf, whom they traditionally have regarded as their social inferiors. Thanks to the tens of thousands of Iranians living in Dubai, Iranians know full well that Dubai is booming because it has embraced globalization, while their country falls ever farther behind, trapped by its suspicion of the West.
Ahmadinezhad’s policy is based on producing everything at home and creating barriers to trade -- he has no use for globalization. His government has been discouraging foreign investors, for instance, refusing to allow Renault to use the billion-dollar facility it built in Iran to build an inexpensive car for the Asian market. The recent Iranian boom has been based almost entirely on profligate government spending which cannot last forever. Despite the flood of oil money, government policies are such that the IMF warns the budget will fall back into deficit again within two years even if oil prices remain sky-high.
Economic discontent will lead to mistrust of Ahmadinezhad among people who voted for him hoping that he would fulfill his promises to fight corruption and improve the lives of common citizens.
In his presidential campaign, Ahmadinezhad promised the Iranian people that he would bring oil revenues to each citizen’s dining table. When Ahmadinezhad’s term began in August 2005, the price of crude oil was just above $55 per barrel. That price has risen rapicly since then, partially because of the Iranian nuclear crisis. Rising oil prices have increased the pressure on Ahmadinezhad to deliver, and the public perception is growing that rising state oil revenues have not improved the lives of average citizens. In the face of rising pressure, Ahmadinezhad has denied his televised promise and claimed that he said no such thing. In April, in a press conference, Gholamhossein Elham, head of the president’s office, joked that oil has a disgusting smell and therefore does not belong on the dining table.
There is an Iranian story that tells about a venerable old poet who traveled to