Over the past month, Rouhani has twice insisted that stock exchanges of companies owned by the government, public institutions, and the armed forces be offered on the stock exchange. Iran’s supreme leader Ali Khamenei also agreed to the release of shares in the stock market at Rouhani’s request.
The Rouhani government’s move to offer bankrupt corporate stocks to the stock market is a continuation of the policy and process of so-called privatization, which many officials have called a corrupt procedure under the name of “private-governmental” companies.
During the so-called privatization of many state-owned enterprises, these entities were handed over to institutions such as the Revolutionary Guards (IRGC) and elements such as the owners of HEPCO and sugarcane Haft-Tapeh company, many of whom went bankrupt, and large numbers of workers joined the army of the unemployed.
Judiciary Chief Ibrahim Ra’isi admitted on 30 April: “The factories were handed over to people who were incompetent, and they took over the factories with the money of the banks and government funds, and inefficiently stopped the production cycle and created problems for the workers.”
The Rouhani government has now taken over the transfer of shares in state-owned companies to the stock market in order to loot people’s property and compensate for the government’s budget deficit, and Ali Khamenei has ordered the release of Edalat shares, but this policy is so treacherous that the media affiliated with Rouhani’s faction have inevitably criticized these actions and blamed them for the destruction of the country’s economy.
Among them, Donya-e-Eqtesad daily with the title: ‘This is not privatization’ wrote: “Putting some company’s stocks into a few bags, stirring the bags, and giving a few grams of each bag’s weight to a large population has nothing to do with privatization, liberalization, or, in other words, popularizing the economy, especially since the government does not remove these warm and soft bags from itself.”
“After the transfer of the second half of the 80’s (Persian calendar) in the form of debt cancellation and the transfer of companies to government sectors, (strange) creatures were born in the Iranian economy.
“These newly grown creatures were neither private nor public, but have become key players in Iran’s economy, now with the implementation of a plan to so-called liberalize the Edalat stock in 2014 at the Ministry of Economy, despite much criticism of the program at the time, we are on the verge of the creation of a strange creature, that will only result in increased corruption and inefficiency.” (Donya-e-Eqtesad, 2 May)
Jahan Sanat newspaper considers the government’s action to compensate for the budget deficit and wrote in an article entitled ‘How to make up for the budget deficit’:
“If the government were to cover the budget deficit by issuing financial securities, it would have to prevent the unreasonable growth of the capital market.
“But the state of the capital market indicates an increase in the government’s preference for the supply of state-owned companies while maintaining public management of those companies.
“Thus, the supply of public companies in the capital market has only the aspect of financing the budget deficit and does not mean increasing the powers of the private sector in these companies.” (Jahan Sanat, 2 May)
Donya-e-Eqtesad in another article with the title ‘crooked great assignment’ wrote on this issue:
“The goal that the government has sought to maximize is the financing of its budget deficit by complying with the following three conditions:
- Assignment of ownership while maintaining control and government management in enterprises.
- Not to be limited to the requirements of governance in Trade Law, and freedom of practice in the way of management and governance of these enterprises.
- Not getting involved with regulatory bodies on the issue of ‘buyer eligibility’ due to the challenging experience of privatization … Although the government’s proposed structure can achieve the government’s funding objectives while maintaining the government’s dominance over firms, its long-term damage to firms as well as the challenges it will create in the capital market.” (Donya-e-Eqtesad, 2 May)
In a report on the transfer of shares in state-owned companies, the Research Center of the regime’s parliament, referring to previous experience in privatization and its challenges in terms of transfer methods, pricing and incompetence of buyers, considers Rouhani’s new plan to transfer shares in state-owned companies to be problematic, “which will lead to the loss of people’s rights and public property and will become a new hub for the country’s economic governance.”
The summary of the report of the Parliamentary Research Center on the purpose of the government in handing over the shares of state-owned companies to the capital market is as follows:
“With all the explanations provided, it is clear that the Cabinet’s decision cannot be considered real privatization, but rather the main purpose of this action is to generate revenue from the transfer of ownership of enterprises and to ensure an end to the rapid budget deficit, while maintaining government management over these companies until the end of the Sixth Development Plan.
“Using the mechanism of investment funds, although it will solve the short-term problem of the government in a simple way, will create big problems for the country in the future.” (MEHR news agency, 2 May)
According to state media and the regime’s parliament, the plan to transfer the Edalat share and the plan to transfer the shares of state-owned companies, as far as the interests of the Iranian people are concerned, is against their interests.
The leaders of the regime call these actions in line with the leap of production, but while during the so-called privatization, many privatized manufacturing companies, they benefit nothing and this was a major blow on the production of the country, certainly, the same situation will be repeated this time, and the amount of money collected will only add to the unbridled inflation.