The Iranian government has spent at least $19 billion in the fight against the novel coronavirus, budget chief Mohammadbaqer Nowbakht told the Iranian parliament on Tuesday.
Iran’s state budget has become a political football in the United States, as the Trump administration defends against criticism that its policies towards Iran have exacerbated the coronavirus pandemic. The administration claims that corruption and wars of aggression rather than U.S. economic pressure have deprived Iranian health authorities of the resources they need.
Several high-profile congressional Democrats signed a letter to the Trump administration on March 31, claiming that the Trump administration’s “maximum pressure” campaign against the Iranian economy risks “putting the Iranian people into further health and economic peril.” Former Vice President Joe Biden, the presumptive Democratic nominee for President, wrote in his own statement that continuing the pressure campaign would "compound…failure with cruelty."
The U.S. State Department defended the Trump administration’s policies in a Monday night statement, claiming that Iran’s “regime has spent over $16 billion to fund its terror proxies abroad while Iranian healthcare services have remained woefully underfunded” over the past eight years. The Trump administration plans to block Iran's application to the International Monetary Fund for an emergency loan on the same grounds.
But the real story is more complicated—although health spending had declined in recent months, Iran's self-reported emergency coronavirus spending now dwarfs the State Department’s claims about the cost of Iran’s foreign wars.
“Our people are under sanctions and harsh conditions, but we have allocated twenty percent of this year’s budget—that is, 100 trillion toman [$23.75 billion]—to fight and eradicate this virus,” President Hassan Rouhani had told the National Coronavirus Response Headquarters on March 28. “In one week, the government has been able to provide 1 trillion toman in cheap loans and facilities to people in trouble.”
Nowbakht told members of parliament on Tuesday that the government’s planning and budget office has allocated more than 81 trillion toman to the coronavirus response. He divided the coronavirus crisis into two components: the strain on the healthcare system and the loss of livelihoods.
The budget chief claimed that the government has spent 51 trillion toman ($12.1 billion) on meeting the needs of health institutions and 30 trillion toman ($7.1 billion) covering cost-of-living. He also mentioned a program to provide low-interest loans to keep small businesses afloat and a proposal to increase subsidies to low-income Iranians.
The Rouhani administration had originally requested 75.9 trillion toman ($18 billion) for the health ministry in December. (The Iranian calendar year begins on March 21.) This was a reduction from the year before, prompting then-Health Minister Dr. Ghazizadeh Hashemi to resign in frustration.
Ghazizadeh later claimed in a March 23 social media post that he had warned the Rouhani administration about the potential for a coronavirus catastrophe.
Rouhani’s budget request for the health ministry later increased to 78 trillion toman ($18.5 billion).
The final budget allocated 44.16 trillion toman ($11.75 billion) for the military, including 26.74 trillion toman ($6.35 billion) for the Islamic Revolutionary Guard Corps.
But the official budget may not tell the whole story.
“Tehran has a variety of off-budget sources of funding, making it difficult to accurately estimate the true size and scope of Iranian defense spending,” according to a November 2019 report by the U.S. Defense Intelligence Agency.
Much of the $16 billion Iran sent to proxy militias across the Middle East over the past eight years may have been off the books.
The State Department statement pointed out that Iran possesses hundreds of billion dollars through a sovereign wealth fund called the National Development Fund, as well as a slush fund of confiscated property.
The Iranian government has tapped the National Development Fund several times over the past few years to pay for both military spending and emergency relief, including €200 million ($218 million) to the Revolutionary Guards during a war scare in January.
Ayatollah Ali Khamanei, the unelected religious cleric who controls the fund, allowed the government to take €1 billion ($1.09 billion) for coronavirus relief from the fund on Monday.
Matthew Petti is a national security reporter at the National Interest. Follow him on Twitter: @matthew_petti.