Privatization in Iran

Privatization In Iran

According to the Fourth Five-Year Economic Development Plan (2005-2010), the Privatization Organization of Iran affiliated to the Ministry of Economic Affairs and Finance is in charge of setting prices and ceding shares to the general public and on the Tehran Stock Exchange. The privatization effort is primarily backed by reformist members of the Iranian government and society who hope that privatization can bring about economic and social change. Iranian president Mahmoud Ahmadinejad, a staunch conservative, has on several occasions lambasted the privatization policies and tried to counteract them.

In 2007, Supreme Leader Ayatollah Khamenei requested that government officials speed up implementation of the policies outlined in the amendment of Article 44, and move towards economic privatization. Khamenei also suggested that ownership rights should be protected in courts set up by the Justice Ministry; the hope was that this new protection would give an additional measure of security and encourage private investment. Despite these statements, true official backing for privatization remains very slow due to political reasons.

It is widely believed that if current governmental organizations are privatized they will need to become more efficient. At present many are not profitable due to large numbers of unnecessary employees hired by the government to reduce unemployment. Furthermore, many of these companies are subsidized by oil revenues. True privatization will inevitably lead to many unpopular job cuts and large scale lay offs.

The current privatization effort calls for an initial public offering (IPO) of five percent of the firms being privatized. Once the five percent is public, it will establish a market price that further offerings can be based on. According to a study conducted by the IMF in 18 countries, privatization adds 2 percent to the government’s GDP per annum.

Read more about Privatization In Iran:  The Iranian Constitution, "Justice Shares" Plan, Shares For Workers, Iranian Expatriates Role, Foreign Investment, Top 100 Iranian Companies, Major Companies Listed For Privatization, Progress, See Also

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