Insider news & Analysis in Iran

 

Many of Iran’s economic institutions have been placed under the authority of the office of the Supreme Leader, which has been dubbed “privatization,” during the past decade. Khamenei's office and the Islamic Revolutionary Guards Corps (IRGC) have gained significant power over Iran’s economic resources.

The decisive point of the privatization campaign began in 2005, when Supreme Leader Ali Khamenei and the IRGC enjoyed an executive majority of people who shared their vision for the regime. “At this point, Khamenei began to implement a profound restructuring of Iran's economy, including the ownership of a wide range of industries and institutions,’ writes Alireza Jafarzadeh, deputy director of the Washington office of the National Council of Resistance of Iran, who is credited with exposing Iranian nuclear sites in Natanz and Arak in 2002, triggering International Atomic Energy Agency inspections. 

In an article for Fox News, he says, “This first took the form of an official directive issued in May 2005. The government was instructed to transfer 80 percent of its economic enterprises to ‘non-government public, private and cooperative sectors’ by the end of 2009. Among these were large mines, primary industries (including downstream oil and gas), foreign commerce, banks, insurance, power generation, post, roads, railroads, airlines, and shipping companies. By some estimates, close to $12B in shares were transferred over just three years, from 2005 to 2008.”

The Supreme Leader’s office and its various branches, including the dominant Setad (the armed services), and the bonyads (foundations), were the beneficiaries of the bulk of these transfers. These institutions have control over all decision-making, legislative mechanisms, intelligence gathering, and access to budgetary commitments. According to Jafarzadeh, this resulted in the rise of powerhouses that act as the main players and control the western companies who enter into the Iranian economy.

The U.S. office of the National Council of Resistance of Iran recently release the newly published, Rise of the Revolutionary Guards' Financial Empire: How the Supreme Leader and the IRGC Rob the People to Fund International Terror, that identifies the 14 economic powerhouses directly or indirectly controlled by Khamenei, the IRGC, or their affiliates. 

According to a recent Reuters calculation, Setad's holdings alone total about $95 billion. Additionally, these entities are tax-exempt while some also receive annual government funding.

The Supreme Leader and the IRGC control at least 50 percent of Iran’s GDP, and they use the profits to fund activities such as the conflict in Syria, the terrorism and sectarianism in Iraq, the war in Yemen, the nuclear and missile programs, the security apparatus in Iran, and fundamentalist operations around the world. “In the end, Iran’s national economy has been made to serve the domestic suppression, warmongering, export of fundamentalism, and terrorism,” writes Jafarzadeh.

He adds, “Tehran is spending between $15-20 billion annually to fund the war in Syria, including at least $1B in salaries to its proxies. IRGC Qods Force commander Qassem Soleimani spends billions of dollars in Iraq to fund the Shiite militias and instigate sectarian violence. At least one billion dollars is provided to Hezbollah in Lebanon annually, and Tehran has poured at least 1.3 billion dollars into the coffers of Hamas.”

While Western companies would like to believe that they make deals with the “private sector,” many of the official banks and companies are backed by institutions controlled by the IRGC.  The West cannot ignore the reality that those who run Iran’s economy are those who suppress the Iranian population and export the terrorism that threatens the West.

“To do business with Iran is to do business with Khamenei and the IRGC,” writes Jafarzadeh.

By designating the IRGC as a Foreign Terrorist Organization, the Trump administration has an opportunity to cut off resources to the IRGC and impose limitations on its profit-making, terror-funding operation. There would most likely be bipartisan agreement in the US Congress on this issue. 

 

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