LATEST: Rouhani Government — “We Are Facing Serious Budget Shortfall”

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Press TV reports that Omani leader Sultan Qaboos bin Said, is to visit Iran next week to “consolidate Tehran-Muscat ties”.

It is no coincidence that the Omani ruler will be the first high-ranking official to visit Tehran since President Hassan Rouhani was formally sworn into office on August 4. Rouhani has emphasized his plans for Iran to improve relations with the Gulf States and particularly Saudi Arabia, with whom he said Tehran has “very close relations culturally, historically and regionally”.

During Rouhani’s election campaign, his deputy campaign manager Morteza Bank told pan-Arab newspaper Alsharq Alawsat that “the Persian Gulf region enjoys a special geostrategic and strategic position in Mr. Rouhani’s government” and that “in order to improve relations with the neighboring countries, Saudi Arabia is Rouhani’s top priority”.

Speaking to Mehr News on Sunday about the Omani leader’s visit, Deputy Foreign Minister Hossein Amir-Abdollahian referred indirectly to Rouhani’s desire to improve relations with Gulf States, saying that “Tehran’s relations with the Persian Gulf countries are based on friendship, brotherhood and mutual trust” and that Iran and regional states are “determined to upgrade their cooperation in different domains ranging from the environment to security”.

Even before Rouhani’s election, senior political figures set the stage for improved relations with the Gulf States including Saudi Arabia. In June, Foreign Minister Ali Akbar Salehi met the Saudi Ambassador in Tehran, saying that he hoped “misunderstandings between the two countries would be cleared up in an appropriate way”. In July, during the last days of the Ahmadinehad government, Salehi — a fluent Arabic speaker whom Rouhani has appointed as head of the Atomic Energy Organization — showed off a gift he had received from the Saudi king:

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Rouhani Government: “We Are Facing Serious Budget Shortfall”

First Vice President Eshaq Jahangiri has said that “more than one-third of the [Government] budget is unrealistic” and it must be cut to about $45 billion.

“We face a serious budget shortfall,” Jahangiri said.

An aide to President Rouhani, Mohammad Baqer Nobakht, told State TV on Saturday night that a revised budget will bepresented to Parliament by mid-September.

“If the 2013-2014 budget law is revised, the government and the country will not face a budget shortfall and resulting inflation,” Nobakht said.