Sunday, May 14, 2023
National Development Fund Receives Support from 13th Government to Strengthen Claim Collection and Implement Currency Accounting System National Development Fund Receives Support from 13th Government to Strengthen Claim Collection and Implement Currency Accounting System
By kangarloo-a @ 12:12 PM :: 133 Views :: 0 Comments :: Article Rating :: News

According to a public relations report from the National Development Fund, the conference titled "The New Governance of the National Development Fund" was held on May 14, 2023. The event was attended by heads of state, ambassadors from over 20 countries, bank managers, parliamentarians, experts in the sector, and members of the media.

During the conference, Ghazanfari clarified that out of the total $150 billion in the fund's resources, $100 billion had been withdrawn by the government. However, he explained that this was in the form of free loans, which were not irreversible and must be repaid like other facilities provided to the private and public non-governmental sectors. He also noted that $40 billion had been paid to the private sector in the form of facilities over the past 12 years, the majority of which has been repaid, and that the collection of outstanding claims is ongoing.

The Chairman of the Executive Board of the National Development Fund further noted that the private sector has received $40 billion in facilities over the past 12 years, a significant portion of which has been repaid. However, the fund is still in the process of collecting outstanding claims.

He emphasized that government facilities taken from the fund are not a withdrawal of its resources, but rather a form of loan. He also stressed the importance of distinguishing between loans to governments and aid to the government. Fortunately, the honorable president is in support of the fund and is actively seeking solutions to ensure its resources are returned.

Ghazanfari emphasized the need for a currency accounting system in the National Development Fund, and suggested that the Santiago principles, which emphasize governance, transparency, and supervision, could serve as the general axis of the fund's operations.



National Development Fund to be Treated as More Than Just Rials

The Chairman of the Executive Board of the National Development Fund referred to the experience of establishing similar funds in 55 other countries, stating that national wealth funds can be commodity-based (such as those generated by the sale of oil and other resources) or non-commodity-based (such as trade surpluses), and some countries even have multiple national wealth funds. He also noted that up to two funds could potentially be established in Iran.

Regarding investment strategies, he explained that national wealth funds tend to be very risk-averse and prioritize low-risk investments, with many funds around the world investing in stocks, bonds, and real estate. He highlighted the strong performance of funds in the Persian Gulf region, whose assets have surged to $10 trillion as of 2022.

Ghazanfari emphasized that the National Development Fund is a foreign currency fund and should not be treated as Rials. He suggested that if all proceeds from the sale of oil were directed to the fund, it would be capable of financing the country's budget through investment profits.



National Development Fund Calls for Currency Accounting System to Enhance Financial Management

Referring to the conversion of a portion of the National Development Fund's foreign currency resources into Rials in recent years, the Chairman of the Executive Board explained that the fund's capital of $9 billion has effectively been reduced to $1 billion. This represents an $8 billion reduction in the fund's value, despite the allocation of bank interest to the Rial amount. Additionally, the fund is required to pay taxes on an annual basis.

The Chairman emphasized the need for a dedicated currency accounting system for the National Development Fund, noting that the fund should not be subject to existing systems. He suggested that a new accounting system be established specifically for the fund, and that legal support may be necessary to ensure that all calculations within the fund are conducted in foreign currency.



National Development Fund Prioritizes Entrepreneurship and Enterprise Creation Over Profit-Seeking

The Chairman of the Board of Directors of the National Development Fund highlighted the important roles of the government and parliament in the fund's new governance. He explained that all oil revenues must be directed to the fund, as oil represents capital rather than wealth. Furthermore, efforts are being made to collect outstanding claims owed to the fund by governments, particularly in upstream oil fields and shared fields.

Regarding the fund's priorities, the Chairman emphasized a focus on entrepreneurship and enterprise creation rather than profit-seeking. He urged stakeholders to refrain from involving the fund in small-scale industries and instead allow it to participate in large-scale projects.




National Development Fund Clarifies Its Role as a Public Currency Fund, Not a Hidden Rial Fund

The Chairman of the Executive Board, Ghazanfari, reiterated the importance of transparency and new accounting standards, emphasizing that the National Development Fund is a public currency fund and not a clandestine Rial fund.

He expressed optimism for the inclusion of appropriate regulations in the 7th Development Plan, and announced that negotiations with the government to collect outstanding claims owed to the fund have been underway and will be announced soon. Ghazanfari also noted the positive collaboration between the parliament, board of trustees, and economic commissions in clarifying the fund's policies through the 7th plan.