Iran’s economy minister: Over $61 billion of state shares transferred to private sector

Business Materials 27 November 2013 13:21 (UTC +04:00)

Baku, Azerbaijan, Nov. 27

By Fatih Karimov - Trend:

Some 1,515,000 billion rials, about $61 billion based on the U.S. official exchange rate of 24,880 rials of shares of Iranian government companies have been transferred to the private sector, the Iranian ministry of economy said, the Fars News Agency reported on November 27.

Of the total transferred shares, 1,495,376 billion rials, about $59.8 billion have been transferred since October 2005 after the outlining of privatisation policies by the Iranian Supreme Leader.

Moreover, shares of 594 state companies have been totally or partially transferred to the private sector.

On November 5, Iranian Economy Minister Ali Tayyebnia said that the maximum 17 per cent of privatisations in the past have been real and the rest of the shares have not been really transferred to the private sector, the Mehr News Agency reported.

The national economy is in a crucial situation, so that in recent years economic growth has been low and inflation rate has been high in the country, he added.

More than 800,000 jobs should be created annually, he said, adding that attaining goals such as high economic growth rate and sustainable employment require supporting the private sector and improving the business environment, the minister said.

On September 10, Tayyebnia criticised the implementation of privatisation policies by former administrations saying that just 10-15 per cent of state shares have been handed over.

Therefore, the privatisation process has not improved the efficiency of the private sector considerably, he added.

Many economic experts have expressed concern about transferring shares of state-run companies to semi-government entities which are neither governmental nor privately-owned.

During the administration of former President Mahmoud Ahmadinejad, security and military organisations, particularly the Islamic Revolutionary Guard Corps (IRGC) and the semi-state companies affiliated with them have gained a big share of privatised assets.

The IRGC has grabbed a large portion of Iran's economy, especially in the oil and gas industries and its former commanders occupy numerous government posts. As a result, most trade and oil contracts signed by Iran necessarily involve the IRGC.