Why Iranian President wants to increase number of state employees by 20 percent?


Iranian President Mahmoud Ahmadinejad has decided to recruit 500,000 new employees for
government work, while seven months remain to the end of his presidency. Some 15,000 of them will be involved in organizations subordinate to the Iranian President's Administration.
Currently, some 2.5 million people work in state organizations. According to the presidential
administration's decision in June last year, the minimum wage of civil servants was set at 3,921,500 Rials ($ 320). The maximum wage is $2,240. When only taking into account the amount of minimum wage, attracting new 500,000 employees will cost Iran at least $2 billion annually.
Taking into account the fact that new employees will be appointed at various positions, the state budget expenditure will be higher.
For example, the wage costs for employees of state agencies hit some $28 billion during Iran's last year (ended on 2011, March 20). Taking into account that Iran's annual budget hit $461 billion, this figure is very high.
The Iranian government's common budget hit $155 billion last solar year. Thus, the wage costs hit 18% of the total government budget.
According to data released by the ISNA on Wednesday, the Iranian parliament reviewed last
solar year's total budget, revealing a deficit of 287.9 trillion Rials ($23 billion). According to OPEC's annual report, Iran's revenues from oil and petroleum product exports totaled $ 115 billion in 2011.
Last year, Iran's oil revenues dropped by 50% due to sanctions. Therefore, an even greater deficit awaits Iran's budget this solar year which comes to an end on March 19.
In this case, the Iranian government's logic to increase spending by attracting half a million new workers is not understandable.
Last solar year, Iran's president promised to create two million new jobs and 2.5 million this year. According to some members of the Iranian Parliament, only 400,000 jobs were created the year before.
According to statistics, one million people reach working age in Iran every year and the
creation of a million jobs requires 8% growth in Iranian economy. According to estimates by the International Monetary Fund, Iranian economy will fall by 0.9% in 2012.
According to official statistics, current unemployment in Iran stands at 12.3%. It should be noted that even people working one hour a week are attributed to the "employed" category in Iran.
Thus, the Iranian president is going to attract half a million unemployed people to public service, and is doing this either to reduce unemployment or win votes in the upcoming presidential elections.
Ahmadinejad can not run as a candidate in the presidential elections on June 14, 2013, as he has been elected twice. However, his conservatives allies will most likely have to lead a serious political struggle with the other factions of the conservative Iranian coalition.

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