Capital Flows , CONTRIBUTORGuest commentary curated by Forbes Opinion. Avik Roy, Opinion Editor. Opinions expressed by Forbes Contributors are their own.
GUEST POST WRITTEN BY
Amir Basiri
Mr. Basiri (@amir_bas) is an Iranian human rights activist.
For slightly over a decade the office of Irani Supreme Leader Ali Khamenei has been quietly and yet surely taking full control over a large swathe of Iran’s economy, all under the deceptive pretext of privatization.
The motive driving this major effort forward can be understood in the desire, and need, seen in Khamenei and the Revolutionary Guards (IRGC) to enjoy all the more control and influence over Iran’s vast natural resources.
On Tuesday, March 21, 2017, Supreme Leader Ayatollah Ali Khamenei waves to a crowd in Mashhad, Iran. (Office of the Iranian Supreme Leader via AP)
This privatization campaign, as dubbed by those behind it, was sparked with a significant turn of events dating back to 2005. With firebrand Mahmoud Ahmadinejad becoming the regime’s president, Khamenei and the IRGC went the limits to pack the entire executive branch with a long slate of loyalists who at least at the beginning of their campaign were in line with Khamenei’s strategic blueprint for the regime’s future.
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With oil revenues skyrocketing, Khamenei sought a wind-blown opportunity to profoundly restructure Iran’s economy as he saw fit. This included bringing a conglomerate of industries and institutions under his direct ownership.
In May 2005, shortly after Ahmadinejad came to office, Iran witnessed the first official order issued for this purpose. The regime’s executive branch was instructed to begin placing 80% of all economic enterprises under the supervision of “non-government public, private and cooperative sectors," with a specific timetable of sealing the plot by the end of 2009.
These enterprises included airlines, banks, foreign commerce, insurance companies, large mines, power generation, posts, roads and shipping companies. Most important of all were primary industries including the likes of downstream oil and gas entities. Estimates indicate a whopping $12 billion in shares were handed over from 2005 to 2008.
Khamenei’s office and its network of entities were enjoying the main portion of such transfers. This included the all-powerful “Setad Ejraiye Farmane Hazrate Emam” Headquarters for Executing the Order of the Imam, in reference to regime founder Ruhollah Khomeini. Iran’s armed services and the notorious foundations were also receiving their share.
The impact is more easily comprehended considering the fact that these institutions are in full control over all their decision-making processes, intelligence gathering mechanisms, legislative methods and having unprecedented access to budgetary commitments of significant proportions. The resulting financial mini-empires have literally transformed into the main players and bouncers, if you may, before Western companies seeking to breach into Iran’s economy.
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