Analytical Report: The 2024 Budget Proposal and New Priorities of the Islamic Republic’s Government

The administration of Masoud Pezeshkian, in its first year in office, has submitted a budget proposal to parliament that includes a significant 200% increase in military spending, earning it the title of a “war budget.” This sharp increase in military and security expenditures has come at a time when Iran is facing intense economic pressures and domestic instability.

This report analyzes the potential causes and impacts of this budget, examining its implications for Iran’s economic and social conditions. Background and Domestic Implications In recent years, Iran has experienced a rise in internal protests and unrest, which has significantly heightened the government’s concerns about the potential intensification of these protests.

The increase in military spending may be aimed at strengthening internal security forces and preparing for further unrest. Notably, following the “Women, Life, Freedom” movement, the government has increasingly focused on suppressing dissent and tightening control over the internal situation. Regional Context and Security Challenges On a regional level, Iran is confronted with multiple security challenges, including the U.S. military presence in the Persian Gulf and regional tensions with Arab countries and Israel.

Additionally, Iran’s nuclear program, which remains under international scrutiny and pressure, may have motivated the government to boost its military budget in a bid to strengthen its defensive capabilities. The military and security forces, such as the Islamic Revolutionary Guard Corps (IRGC) and Basij, play a crucial role in Iran’s power structure. Increased funding for these entities could further bolster their position within the regime. This move likely reflects the government’s growing reliance on these forces to maintain order and sustain its hold on power.

Economic and Social Consequences While resources are being allocated to military spending, other essential sectors like healthcare, education, economic infrastructure, and public welfare are at risk of budget cuts. This scenario is particularly concerning given that Iranians are already grappling with high inflation, unemployment, and decreased purchasing power, which may further fuel public discontent. Reduced funding for economic and social sectors will worsen the economic hardships faced by the population, potentially

exacerbating inequality, poverty, and the prevalence of economic and social crises across different social groups. Impact on Public Trust and Potential for Increased Unrest A focus on military spending may erode public trust in the government and amplify feelings of hopelessness among the population. If this trend persists, it could lead to further internal unrest, compelling the government to rely even more heavily on military forces to maintain stability.

Long-Term Strategic Implications Given the intensifying international pressures and economic sanctions, the Islamic Republic faces reduced access to revenue sources. Allocating more resources to the military while diminishing investments in economic development and job creation could further isolate Iran economically, solidifying the role of military institutions as the dominant forces in the country’s economy and politics.

Decreased funding for welfare and social services is likely to place greater strain on the lower classes. Should this situation continue, public dissatisfaction is expected to rise, creating a fertile ground for new protests and unrest. The likelihood of the Islamic Republic relying on its military and security forces to suppress these protests may give rise to a cycle of repression and resistance.

Conclusion The proposed budget of Masoud Pezeshkian’s government and its focus on military and security sectors indicate a significant shift in the Islamic Republic’s priorities.  As the government faces numerous internal and external challenges, these policies are seemingly designed to safeguard its stability and power against both domestic and foreign threats. However, the long-term consequences of this approach could deepen social and economic crises, further destabilizing the country’s overall condition in the coming years.