“Sayyid Ali Khamenei, the leader of the Islamic Republic, has approved the decision of the leaders of the three branches of government to sell surplus government properties and grant legal immunity to the decision-making body regarding the sale of these properties. With the approval of the decision by the leaders of the three branches of government, it is planned to soon begin the sale of non-real estate properties of the Iranian government and affiliated institutions such as banks, which will be decided upon by a designated body.”

The proposal to form a committee for the sale of excess government properties in Iran in 1399 was given by Seyyed Ali Khamenei to the President, the Chief Justice, and the Speaker of Parliament. Then, with the preparation of the “Government Asset Generation Resolution” in a meeting of the heads of the three branches of government, it was approved by him in November of this year. After the confirmation of the leadership of the system, the government of the Islamic Republic of Iran approved the implementation regulations of this resolution in December 1401 and the media also published it in the second week of Bahman. (1)

According to a resolution proposed by Seyyed Ali Khamenei and approved by him, all surplus non-movable assets of government agencies, state-owned companies, state-owned banks, and semi-finished projects must be sold. This means that movable assets will not be subject to this resolution. Surplus refers to assets that are idle and unused, do not serve the inherent duties of the owning agency, are not suitable due to economic value of the region and geographical location; and also includes assets with commercial, residential, recreational, and similar purposes.

It is planned that the proceeds from the transfer of non-movable properties and semi-completed government construction projects, after deducting the approved commission by the board, the details of which have not been announced, will be deposited into the treasury account. Half of the deposited amounts are intended to be immediately transferred to the account of the ownership of capital assets of the relevant executive headquarters or provincial office, in order to be included in the approved budget for expenses of that government sector. For example, if a building belonging to one of the ministries is sold in Tehran, half of the amount deposited into the treasury is intended to be used for expenses of that ministry.

According to the decision of the Iranian government, 100% of the deposited amounts to the treasury from the transfer of assets of the Ministry of Education and Ministry of Health, Treatment and Medical Education will immediately be deposited into the ownership account of the relevant ministry’s capital assets, and it is planned to invest in “deprived areas and regions”.

Ali Khamenei, in the 1980s, presented a new interpretation of the Constitution of the Islamic Republic of Iran and allowed for the privatization of certain non-sovereign sectors of the government, such as security institutions and healthcare services, in order to strengthen his power and align these forces with his goals.

After the privatization of companies and non-governmental organizations by the government, a large portion of them were purchased by government organizations such as the Islamic Revolutionary Guard Corps or influential individuals and officials within the government. For example, the largest telecommunications company in the country, which was previously government-owned, was bought by a consortium belonging to the Islamic Revolutionary Guard Corps and the executive headquarters of the Imam’s decree – both under the supervision of the Supreme Leader of the Islamic Republic. Former Iranian President Hassan Rouhani (2013-2021) referred to this method as “privatization,” which is a combination of private and government ownership. In reality, the sold companies were removed from the government’s hands and placed under the control of non-governmental entities, such as structures under the supervision of Khamenei, through the purchase of shares.

When a law is violated.

The announcement of the sale of Iranian government assets has been met with criticism, and even some officials of the Islamic Republic have expressed their grievances. Mohammad Reza Sabbaghian, a representative of the Islamic Consultative Assembly, said in a public session of the parliament that the leaders of the three branches of government “cannot ignore the 290 representatives and the Guardian Council and pass whatever they want.” He warned that this plan, citing Article 71 of the Constitution, “strips the parliament of its supervisory role and the judiciary of its jurisdiction, and sounds the death knell for the parliament. We have seen various councils legislating in the past, and today we are witnessing the leaders of the three branches doing the same.”

The leader of the Islamic Republic confirmed this decision in November of this year, amidst anti-government protests. However, the proposal to form this decision-making committee regarding the sale of government properties has been postponed to December of 2020. One of the prominent points of this seven-member committee for the transfer of properties – referred to as the “Supreme Committee” – is the identification of excess government properties and the method of their transfer, which includes determining the price. This task is also entrusted to the members of this committee, which has been labeled as “corrupt” by many observers.

Ahmad Alireza Bigi, representative of the Islamic Consultative Assembly, told Etemad newspaper: “Granting such powers has dire consequences, especially since society has experienced privatization with all those committees, commissions, and representatives who were involved in the transfer process.” Some legal experts have also considered it contrary to the Constitution, while mentioning the legal flaws of this law. According to Article 85 of the Constitution of the Islamic Republic, the Assembly cannot delegate legislative powers to an individual or a committee.

In one of the articles related to government property generation, it is stated that “any laws or regulations conflicting with this article will be suspended for a period of 2 years.” In other words, for 2 years, it is not permissible to have any legal actions that go against this article. In recent years, the issue of selling excess government properties has intensified. About two years ago, at the same time as the change in the presidency of the Tehran Stock Exchange, Farhad Dejpasand, the then Minister of Economy of Iran, announced the sale of government properties in the stock market. At that time, the Privatization Organization had declared the value of these properties to be “over 100 trillion tomans.”

The resolution of privatization has turned into a very controversial issue. In fact, the meaning of transfers and sales of unused government properties is privatization, which has been bitter experiences in previous years. In the process of privatization in the 1980s, it was announced that government companies would be sold, but ultimately the promised privatization led to widespread corruption. In fact, privatization, with the process it went through, resulted in the loss of billions of tomans of national assets.

Many large factories and huge agricultural and industrial companies were sold at a low price without considering the qualifications of the buyers. Only those who had connections with the government were able to benefit from these assets and economic opportunities. In reality, neither the real private sector had a demand to buy these properties, nor the ability to purchase them. It is regrettable that large loans were given to buyers with long repayment periods and low interest rates. (4)

It means that the money used to purchase these properties was from people’s deposits. This resulted in privatization, which was supposed to transfer around 2,033 units, but ended up with less than 50% capacity, accompanied by excessive talk, corruption, and rent-seeking. Essentially, the true meaning of generating wealth is not what is being discussed about this decision.

Waste of resources and increase in corruption

The government has failed to fulfill its promise of mitigating the impact of sanctions on the country’s economy and people’s livelihoods. Without resolving the issue of economic sanctions, the government presents a budget every year and funds it from the pockets of the people.

Basically, without reviving the JCPOA, it is unclear how the budget can be closed, as the government can close the budget from three main sources in the field of economy; the first is borrowing from abroad, which is the sale of oil. The government sells oil and meets its budgetary needs with the resulting foreign exchange revenues. The second way is borrowing from the people, which takes the form of selling securities and ultimately borrowing from the central bank. The sale of securities and borrowing have been done alternately in recent years, and in most cases, the government forced banks to buy these securities. The government has turned to borrowing from the central bank and borrowing from the people from these three known economic sources.

In fact, the government is forced to borrow from the central bank without solving the problem of economic sanctions. Although the government claims that it does not borrow from the central bank to prevent inflation, in reality, borrowing from the banking system creates inflationary shocks and causes numerous problems for the private sector. It should be noted that the sale of securities has been sufficient in recent years and the government’s last resort of selling securities has been exhausted.

In these circumstances, they have been forced to launch a generation plan that creates numerous problems. The plan may be desirable in normal conditions and may involve the private sector. However, in the current situation of sanctions and high budget deficits, the generation plan will only result in wasting resources and increasing corruption. If this plan was implemented by competent individuals, it would have been acceptable. However, since the seven-member committee lacks experienced individuals and sufficient knowledge of economic structures, it will create numerous problems. We must ask the designers of this plan, if the government manages to solve its budget deficit this year by selling assets, what will they do next year? This is where the issue of reviving the JCPOA is once again brought up. The government has no solution other than reviving the JCPOA and developing appropriate relations with the surrounding world.

Without this option, every move will be detrimental to the livelihood of the people. The only viable solution to solve the budget deficit problem is to increase productivity and reduce unnecessary expenses. However, in the 1402 budget, the government not only did not make any efforts to improve productivity and reduce unnecessary expenses, but also exacerbated the budget problems by increasing institutions such as the state radio and some cultural institutions.

Continuation of this trend leads to a higher budget deficit for the year 1403 compared to the previous year, and the budget for the following year will put more financial pressure on the people. With such budgets, inflation will continue to rise, liquidity will increase, and problems will worsen.

The last arrow in the bow.

In the early 1970s, one of the government officials of the time in charge of industries expressed the following statement: “All the capitalists affiliated with the Shah’s regime have fled, and the current capitalists of the country are nothing but grocers and market traders. Therefore, in order to privatize the industries and enterprises of the country, we must create new capitalists from among the defectors and the ruling establishment” [quoted closely to the content]. This strategy was welcomed by all the “greedy selves” of the regime and was immediately accepted. This was how the lack of security for foreign investors and non-indigenous capitalists led to a network of corruption and “auctioning off” of public property.

To facilitate the process of transfer, a legal law was passed to pay the price of factories in installments. However, due to the severe devaluation of the national currency and the lack of previous pricing history for transferable factories in the stock market, individuals such as Khadem Al-Maleh (then Minister of Industries) and his colleagues would set the prices themselves. For example, a company that was valued at one hundred billion tomans in the 1970s was transferred to the son of the head of the judiciary for a negligible amount of twelve billion tomans by the same person. Therefore, the desired industrial complex was transferred to them through negotiation (not the stock market) and in installments, and the remaining installments were forgiven after the first installment. [As quoted from the speech of Abbas Palizdar, the responsible researcher on behalf of the Islamic Consultative Assembly at the Basijis Conference in Hamedan] And this is how servants such as Morteza Re

Economic liberalism, or “privatization”, has reached a point where a military force of the country, namely the Revolutionary Guards, which had the mission of defending the Islamic Revolution and the country’s borders, has fully entered economic activities and in one instance, forcefully took over the management of Imam Khomeini Airport by bringing tanks onto the runway and competing with a Turkish company that had lost. In relation to the takeover of the telephone company, which in the current conditions has caused destruction in people’s lives, initially the winner of privatization was a Yazdi investor, but the same scenario was repeated and with the consent of Ahmadinejad, the company was handed over to a group of individuals affiliated with this “holy lineage”; with a long-term employee check for 12 billion tomans and the rest in installments. The situation has reached a point where the victims of embezzlement of 123 billion tomans and 3 trillion tomans, and the king of 20

One of the economics professors has stated: “Based on my calculations, from the time of Babak Zanjani’s two billion dollar theft to the end of the ninety billion dollar Mobarakeh Steel case, a total of seven hundred and eighty-seven trillion tomans of embezzlement and theft has taken place at the highest levels of the country.” It is ironic that these tragedies, which are a small part of “betrayal of the nation’s hope,” have been carried out under the cover of biased laws, and perhaps this time, the “generation” of the last arrow in the bow of the corrupt and thieving system will be for their own survival.

Notes:

1- Hasaninia, Arash, National Plunder under the name of “Generating Wealth”; Khamenei’s plan to sell government properties, Million website, 9 Bahman 1401 (January 29, 2023).

2- Supervisory immunity means the suspension of the constitution, Etemad newspaper, 14 Bahman 1401.

3- The general policy of generating revenue is the government’s response to the failure to achieve tax revenues/ The approved tax amount in the budget of 1402 is the government’s dream, according to the website Eghtesad24, on February 14, 2023.

4- Taheri, Amir, Moulding, Khamenei’s plan for buying loyalty, Unika news and analysis website, 16th of Bahman month, 1401.

5- Thirteen Horrifying Points about the Approved Sale of National Assets, the National Capital Auction under the Name of “Moulding”, Event 24, 10 Bahman 1401.

6- Asset Creation or Asset Sale?, Specialized Financial Supervision Quarterly, December 3rd, 2020.