Minister Slams Pushback Against Privatization

EghtesadOnline: Economy Minister Ali Tayyebnia said rent-seeking, astronomical executive salaries and cronyism are examples of corruption in state-run companies.

News ID: ۷۴۰۱۵۷

04 March 2017

Blaming the stiff resistance mounted by provincial officials and some parliamentarians to privatization, the minister added, “Not a single day goes by without the ministry receiving letters threatening me and my deputies with impeachment.”

Tayyebnia, who was speaking at the closing ceremony of the 10th Conference on Tax and Fiscal Policies in Iran, noted that Article 44 of the Iranian Constitution was supposed to bring about an economic revolution to the country but when it comes to privatization of one company, the beneficiary groups exert pressure from all directions, IRNA reported.

The minister’s comments echoed those made by the head of Iranian Privatization Organization last week, according to Financial Tribune.

“The current surge of opposition put up to privatization is ‘horrible’,” Mir Ali Ashraf Abdollah Pouri-Hosseini said.

“Right now, 400 economic entities have yet to be handed over. In addition, 300 public companies have been removed from the list of privatization offers on different grounds,” he said.

After the 1979 Islamic Revolution of Iran, almost all strategically situated economic sectors were nationalized or expropriated for the purpose of redistribution of wealth.

Under Article 44 of the Constitution, the government owns all major industries. In 2008, a new wave of criticism over the disproportionate state ownership and its inefficiencies in promoting economic development in the country brought attention to Article 44.

The Law on Implementation of Article 44 of the Constitution, which redefined the limitations on private sector participation in the economy, was drafted. The law kept the core management of the government in main industries and allowed privatization of all other activities or participation of the private sector in expanding the previously public sector.

The process marks a move toward market economy and aims to achieve full privatization.