Iran Approves Privatization of State-Owned Firms through Share Ceding

Strategic Insights -

The Expediency Council in Tehran has approved a directive that cedes over 65 percent of shares of state-owned firms to the private and cooperative sectors. This decision comes after a prior ruling by the arbitrative body to delineate comprehensive policies pertaining to Article 44 of the constitution, which covers the expansion of non-state sectors via privatizing state-owned and affiliated organs. The defense and security-related industries, the National Iranian Oil Company (NIOC), and affiliated firms are excluded from the directive.

Key Takeaways:

  • The Expediency Council has approved the ceding of over 65 percent of shares of state-owned firms to the private and cooperative sectors, with large industries and mines being the primary focus of this transfer.
  • The defense and security-related industries, the National Iranian Oil Company (NIOC), and affiliated firms are exempt from this directive due to their sensitive nature.
  • Article 44 of the constitution identifies the domain of the state sector as large industries, mines, foreign trade, banking, insurance, and other areas with public ownership or state affiliation.
  • The directive emphasizes the importance of the government's role in expanding economic infrastructure and monitoring the national economy, particularly in the oil and gas, water, electricity, and pharmaceutical sectors.
  • The Expediency Council has listed priorities such as raising productivity and efficiency, creating infrastructure for socio-economic development, and widening ownership among the public.
  • The decision to revise articles 43 and 44 of the Constitution aims to end the state's monopoly over economic affairs and promote privatization.
  • A 20-year strategy for economic, social, and cultural development has been drawn up by the Management and Planning Organization (MPO) and forwarded to the government for implementation from 2005 to 2025.
  • The Expediency Council has emphasized the importance of adopting transparent mechanisms for ceding economic affairs, such as the stock exchange, to provide equal opportunity for the public and cooperatives.

Statistics:

  • 65% of shares of state-owned firms will be ceded to the private and cooperative sectors (Asia Pulse)
  • 20 years: The duration of the Management and Planning Organization's (MPO) drawn-up strategy for economic, social, and cultural development (IRNA)
  • 2005-2025: The period during which the 20-year strategy will be implemented (IRNA)
  • NIOC and affiliated firms excluded from privatization (Asia Pulse)

Sources:

  • Asia Pulse
  • IRNA
  • IRNA (second mention)
  • Asia Pulse (second mention)