Azerbaijan, Baku, May 21 / Trend , T.Jafarov/
Interview Trend with Chairman of Privatization Committee, Deputy Economy and Finance Minister of Iran Golamreza Heydari Kord Zengene.
Trend : How would you estimate the participation of Azerbaijani companies in the privatization process in Iran?
Golamreza Heydari Kord Zengene: We want to attract Azerbaijani companies for privatization and investment in the economy of Iran. In recent years we have witnessed an active investment by Azerbaijani companies to the economy of our country. In particular, this is actively observed in East Azerbaijan. We are willing to make special concessions for Azerbaijani companies in the privatization process. Of course, these benefits we provide to other companies as well, but also for Azerbaijan, they may be more significant that, for example, includes the provision of loans at low interest rates.
Iran adopted a law on privatization which provides simplification of investment. Three or four years ago, state participation in the economy of Iran was 60 percent, now it is below 40 percent. We look forward to more active participation of Azerbaijani companies. And we are also interested in the participation of Iranian companies in the privatization process in Azerbaijan.
We are trying to raise the private sector in the economy of Iran. To do this, for example, we abolished impressive benefits to state-owned companies in the privatization process, created a structure to support investors. The State, the Central Bank and the Ministry of Economy should apply incentives to enhance the private sector. These bodies should annually attract $10 billion of foreign loans to private companies for issue of Iranian private companies.
Q: What problems may encounter and curretly experiencing foreign private and local companies in investing in Iran?
A: Formerly there were problems mainly in the legislation. This is a serious problem. Therefore, under the supervision of the President of Iran there was created a team to eliminate problems in the legislation. The work group is to amend the labor laws, the Financial Regulations of tax on insurance and on banks.
Another problem was the delay prior to issue licenses to private companies. For example, if you have a company wanted to build a factory, it receives a license only after 3-4 months. Now all the Government no later than 1 month must present a license to companies
Q: What about the privatization in Iran, which sector is more active in this process - oil or non- oil?
A: Over the past 3 years $ 40 billion was transferred to the private sector. During this period, 265 enterprises were privatized in the industry sector. Petrochemical and processing plants were privatized in the oil sector. Steel mill in Isfahan and Huzestane, the entire copper industry in Iran has already been privatized. The proportion of the state in these enterprises is below 20 percent. In machine-building enterprises the state share is 30 percent.
Iran's shipping companies and a number of companies of the Energy Ministry have been privatized. For example, the Mepna company, which is engaged in building hydroelectric power stations in the country, have already been privatized. We plan to fully privatize all the country's power plants.
A third of the equity of the Iranian communication company which includes 33 companies has been privatized. Two more mobile communication operators have been privatized in the country.
In general, a total of 389 enterprises were privatized in 2009.
By the way, the law prohibits the privatization of government companies, both large and small. Ministries and military organizations can not have a direct stake in privatization.
But there is one problem. This is social funds. There are the governmental social funds, social funds for militaries, public social funds and investments companies associated with banks in our country. From a law point of view, they are private and there are no bans for them. But in Iran, the problem of such funds is in their regulations. For example, the Social Protection Minister appoints the head of the social fund in our country. From this view, people think that this is a public fund. Funds are not allocated to social funds from the public budget. In general, the world's foundations are private. For example, Shell is the largest oil companies in the world. Some 90 percent of the company's shares belong to social funds of the United Kingdom and Netherlands. In most countries, privatization is provided by this fund. It is more advantageous from an economic point of view.