Commentary

Iran Launches Major Privatization Initiative

With most of the recent news from Iran revolving around the nuclear standoff, it makes sense that news like this falls under the radar:

TEHRAN, July 3 (MNA) — Supreme Leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei on Sunday issued an executive order for privatization of state companies as envisaged by Article 44 of the Constitution. The plan aims to privatize state industries, excluding companies in the oil sector. Tehran Stock Exchange Director Ali Salehabadi announced that the organization is prepared to sell off the shares of state-run companies through the stock market. . . . . Former deputy minister of economic affairs and finance Mohsen Safaii Farahani called the move a “major and strategic step” to clear the path for the entry of private sector companies into activities which had previously been prohibited for them. “A competitive atmosphere should be created for the activities of the private sector. For example, there is no ban on signing deals with the private sector but, in the last seven or eight months, the major contracts in the country have been signed with institutions other than the private sector,” Safaii Farahani noted. According to the Fourth Development Plan (2005-2010), the government or government institutions should participate in activities that the private sector shows no interest in or is unable to perform, he said. Minister of Economic Affairs and Finance Davud Danesh-Jafari told reporters on Monday that the plan would create a great reform in the country’s economy. He said the purpose behind the plan is to “prevent monopolization by the government or the private sector.” Through such a plan, the government will delegate a major part of its activities to the private and cooperatives sectors, he added. The size of the government will be reduced by selling 80 percent of the large state companies, he said, noting, “Generally, such policies will have a determining effect on the country’s development.” On Monday, Judiciary Chief Mahmud Hashemi Shahrudi called on Judiciary officials to heed the Leader’s privatization order, calling the move the savior of the country’s economy.

More on this from Lebanon’s Daily Star:

Iran’s supreme leader has unveiled plans for a major privatization of state industries apart from companies in oil and other critical sectors, press reports said Monday. The government plans to sell off 80 percent of its stake in a range of state-run industrial companies in the banking, media, transportation and mineral sectors under an order issued by Ayatollah Ali Khamenei. The move is likely to lead to a major upheaval in the economy, which is currently about 80 percent state-controlled.