According to a report released by NDF Public Relations, Mahdi Ghazanfari elaborated on the history of development funds and national wealth funds in a TV talk show and said: "the establishment of development and wealth funds was first started in oil-producing countries so that they would prevent direct injection of oil revenues surplus to their budget and economy leading to unwanted inflation or Dutch Disease. Fortunately, NDF, established 10 years ago based on successes and failures of the main reserve account, set development and protection as its main objectives and prohibition of resources withdrawal for the government current and construction budgets have clearly been stipulated in the Fund's Articles of Association and the five-year plan, added Ghazanfari.
NDF President continued, "Development and protection in NDF mean supply of financial facilities to the private sector and protecting resources for next generations, while investment has recently been added to the Fund's objectives."
Resources Deposit with NDF, Less than 10 percent
To answer the question on whether the entities have fulfilled their commitments regarding the deposit of resources with NDF, Ghazanfari said," There are few entities which are committed to deposit their shares with the Fund. Based on policies of five-year plans and the Fund's Articles of Association, the origin of resources has been stated. Accordingly, it was planned to inject 20 percent of oil revenues to the Fund, increasing 2-3 percent annually so that 30-40 percent deposit could be met. The Fund's share in the current year equals 40 percent, which is required to be provided by National Iranian Oil Company as the entity in charge of selling oil, gas and natural gas condensates. NIOC is committed to deposit the revenues with the Central Bank who must allocate the shares of the government and NDF."
"No government is authorized to decrease the Fund's share or is authorized to decrease the share based on the parliament's decision. Provided that the government faces budget deficit, it must ask for the legal green light to pay 20 instead of 30 percent, for instance. There are examples of governments, legally permitted to pay the Fund's shares less than the determined percentages," noted Ghazanfari. Explaining
the amounts of resources deposited with the Fund within the last 10 years, he said, "Although the five-year has emphasized on deposit of 30 and then 40 percent of oil revenues with the Fund, within the last 10 years, less than 10 percent and nearly 9 percent of the resources has been deposited.
Oil Revenues -State Budget Relation Needs to be Split
Stressing on the need to cut the relation between the national budget and oil revenues, NDF President restated, “Here in NDF, we believe that all resources, supplied by oil sale, must be deposited with the Fund. These deposits are not considered wealth and all constitute our capital, which must not be spent but invested to create profit and wealth, which can be injected to national budget. In fact, the country must not feed on oil revenues but on profit earned from investments, which has been made by NDF.”
6 Billion USD of NDF Resources Recognized
In reply to a question on the latest status of loans repayment, Ghazanfari explained, “Since the formation of the present administration, NDF and the government tries to reach a mutual understanding through talks and discussions that NDF resources belong to the people. Fortunately, since then and following NDF effective resolutions, the flow of resources back into the Fund has been satisfactory and both sides, well supported by the legislative and the judiciary powers, have properly collaborated for better achievements.” Ghazanfari added, “out of a 7-billion-dollar loans overdue, 6 Billion USD has been decided upon and just one Billion USD is under negotiation. Out of 6 Billion USD, 2 Billion USD has been repaid and 4 Billion USD has been repaid through reposition of corporate shares. Generally speaking, the repayment of resources granted to investors has been promoted.
ICC and Power Plants Supporting NDF
Elaborating on repayment of loans received by power plants, NDF President continued, “power plants management have raised the issues of imperative pricing and impossibility of exporting their products. However, they all believe that NDF resources in foreign currencies must be repaid to the Fund at current market rate. No one believes that NDF is not entitled to receive the resources back but they say that other authorities’ decisions and resolutions make them face challenges in loan repayment.”
Iran Chamber of Commerce was the next question NDF President Ghazanfari explained about, “ICC has not received any NDF loan. It is essential to have such entities active in the country. The Chamber had been told that people’s rights are not observed by the Fund. Accordingly, the Fund and ICC representatives negotiated over the issue and they were provided with detailed performance reports. Being informed of the issues, they declared full support of the Fund and highlighted the current market rate for repayment of loans. They even asked the Fund to raise the issue and present the reports in ICC presiding board in presence of top players of national economy.