Iran’s decision on IRGC may affect ties with rest of world

Baku, Azerbaijan, Jan.23

By Leman Zeynalova – Trend:

Reducing the armed forces and the Islamic Revolutionary Guard Corps (IRGC) influence in the Iranian economy is easier to say than to achieve, Francis Perrin, Senior Fellow at the OCP Policy Center (Rabat) and Senior Research Fellow at the French Institute for International and Strategic Affairs (IRIS, Paris), told Trend.

His comments came after Iranian Supreme Leader Ayatollah Ali Khamenei tasked the general staff of the armed forces of the country with privatizing the economic institutions affiliated with army and the IRGC.

The Iranian defense minister, brigadier-general Amir Hatami, told the official Iran daily that the decision seeks to prevent the armed forces form being involved in “irrelevant economic activities”.

It is not the first time - and perhaps not the last one - that the Supreme Leader of the Islamic Republic of Iran, Ayatollah Ali Khamenei, is asking for more privatizations and is calling for the armed forces and the Islamic Revolutionary Guard Corps (IRGC) to stop from being involved in economic activities. This demand was first formulated more than ten years ago, noted Perrin.

‘Since his first mandate President Hassan Rouhani has had some very hard words about this major and growing economic and industrial role played by these entities, especially the IRGC. He stressed that a significant part of the Iranian economy was transferred from an "unarmed government" (the Iranian government) to an "armed government", an obvious reference to the IRGC. He added that this second government was armed with guns, media and news agencies. It is not a sound economic and privatization policy, he explained. We have to transfer more activities to the "real private sector", President Rouhani added,” recalled the expert.

He believes that the very recent orders coming from the Supreme Leader must be analyzed as regards two main aspects: it is part of the fierce political struggle within the Iranian regime (see the paragraph above) and it could have an impact on economic relationship between Iran and the rest of the world.

When President Trump decided in October 2017 to impose new sanctions on Iran the US Department of the Treasury's Office of Foreign Assets Control designated the IRGC as a foreign terrorist organization under US law, recalled the expert.

“It means that foreign companies working with economic entities in Iran linked to the IRGC could be sanctioned by the US Administration, which will make much more difficult the economic opening President Rouhani and his government, including Oil Minister Bijan Namdar Zanganeh, want to achieve. This reminder by the Supreme Leader is also a way to try to reduce this higher political risk for Iran and for foreign investors or potential investors in Iran,” noted Perrin.

As US Treasury Secretary Steven Mnuchin said last October, "we urge the private sector to recognize that the IRGC permeates much of the Iranian economy and those who transact with IRGC-controlled companies do so at great risk".

“Of course reducing the armed forces and the IRGC's influence in the Iranian economy is easier to say than to achieve. The Corps has very strong political connections and major interests in the industrial sphere and will not accept to retreat gracefully. The Supreme Leader asked them to withdraw from economic entities not related to their missions but there is here some room for interpretation. And the Defense Minister, General Amir Hatami, has just said that Khatam ol-Anbia, the main engineering and construction arm of the IRGC, would not be affected by the Supreme Leader's orders. Khatam ol-Onbia is playing a very important role in the oil and gas sector,” he added.


Follow the author on Twitter: @Lyaman_Zeyn

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