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Sixth Majlis’ Privatization Drive
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Majid Ansari, Head of Majlis Plan, Budget and Audit Commission |
Everything is always disputed in Iran, well almost everything. Privatization
has been a rare exception. All of Iran’s officials have now come to a belief
that privatization and downsizing the government are the only option left for
breathing new life into a stagnant economy dependant on oil. Even though the
need for privatization has been accepted on all fronts, it has yet to produce
tangible benefits and is proceeding at a slow pace. This is why the Sixth
Majlis has tried to speed it up and increase its momentum. We had an interview
with Majid Ansari, Head of Majlis Plan, Budget and Audit Commission in regards
to the steps the Majlis has taken to achieve this end.
Has the government been successful in reducing its control over the domestic
economy?
Yes.
Various approvals by the Majlis have paved the way for downsizing the
government and promoting privatization in such economic fields as banking,
insurance, telecommunications and other fields. At present, we are witnessing
increasing private investments in the above fields. Although the number of
private banks, insurance firms and airlines were already increasing and
private companies were active in such fields as telecommunications and even
power generation, steps taken by the sixth Majlis gave the trend a new
momentum and more steps are still needed.
To what extent has the sixth Majlis been successful in privatizing the
economy?
I must
first say that some figures are not factual. For example, some claim that 80%
of the economy is state-run, but this is not true because latest studies put
the figure at 64%. The agricultural sector has been 100% privatized and the
government is primarily concerned with policymaking. In addition, the housing
and construction sectors have been mainly privatized and the government’s role
in the industry and mine sector is diminishing.
Based on available figures, service sectors, especially the commerce sector is
run mainly by the private sector. The private sector is also playing a
considerable part in tourism and traveling. The Majlis has banned the
establishment of new state-run companies and governmental companies are being
gradually ceded through specialized parent companies. Iran Khodro, Saipa and
many cement and steel companies have offered their stocks on the stocks
market. However, the increase in budgetary share of credits allocated to
state-run companies would not be construed as developing such companies, but
the credits are to be used for renovation and improvement of governmental
companies.
Why hasn’t Majlis pursued privatization in the oil and gas sector?
Privatization has not been desirable in the oil, gas and petrochemical sector.
Of course, some companies are at the beginning of the process, but we hope
that the process would speed up. Also, we have made two phases out of the 16
phases of the South Pars gas field operational. Many wells have been drilled
in the joint field and the construction of marine platforms as well as
refineries and upstream and downstream installations—the majority of which
were constructed at the hand of Iranian specialists—have brought prosperity to
the Assaluyeh region. Anyway, investments made during the recent years have
increased our crude output to above the quota considered for Iran by the
Organization of Petroleum Exporting Countries (OPEC).
What have been the consequences of Majlis’ approval for attracting foreign
investment?
The most
important step was approving the Foreign Investment Attraction and Support
Bill, which has paved the way for investments by foreigners and Iranian
expatriates in various economic fields. So that, despite the short time that
has passed since its approval, we have broken new grounds with regard to
attracting foreign investments.
Does the law provide the adequate incentives for attracting foreign
investments?
Yes. Of
course, the Guardian Council raised several objections and it was referred to
the Expediency Council. The council’s view was fortunately positive in such a
way that Mr. Karroubi and I were sorry that we had made adjustments in it. It
would have been better if we had forwarded the Cabinet’s approval intact.
Anyway, the act enjoys the necessary capabilities for attracting foreign
investments. |
