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Iranian bank privatizations: another power grab?

Privatization in Iran involves big transfers of stakes from one arm of the state to another, propping up the establishment and helping unbalance the economy.

In the past two months, the Iranian government has sold parts of Saderat, Mellat and Tejarat, three of the biggest financial institutions in the Islamic Republic. In Iran, bank privatization is accelerating. Is this part of the power grab, the conservative coup, that might have occurred during this summer’s disputed presidential election?

One might even suggest that the privatizations were even accelerated so that the Basij, the Revolutionary Guards and other entities with an interest in preserving the leadership could consolidate their power, just at the point when the conservative rule of Mahmoud Ahmedinejad came under pressure from street protesters.

The process was probably not speeded up much as a result of the rulers being surprised by the protests. Iran’s privatization programme, and more particularly the privatization of banks, has not been implemented suddenly. Privatization has been accelerating for more than a year. Long before large crowds started to express their support for opposition candidate Mir-Hossein Mousavi, the state had planned to offload chunks in these banks round about now.

Still, in privatizations under Ahmedinejad, even when stakes are sold on the stock market, only a small proportion goes to entirely private-sector investors (usually individuals).

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