Iran’s sell-off goes full circle
Iran’s privatization programme is putting shares in the hands of quasi-state organizations. That’s partly because the domestic private sector is starved of funds and foreign investment is hampered by US sanctions and local restrictions. Mainly, though, it’s because the ruling elite wants to retain control. Angus McDowall reports.
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WHEN HALF THE shares in Iran’s state telecom company were put on sale on September 9, the move was hailed as a great leap forward for the country’s programme of economic liberalization. "This is the biggest government company to be sold so far so it’s very important," says Behrouz Alishiri, head of international affairs at the ministry of finance. "It’s worth about 20% of everything the government has privatized. It will have a huge influence on the market."
With a market capitalization of $9.7 billion, Telecommunications Company of Iran (TCI) is the largest company to be listed on the Tehran Stock Exchange (TSE). With a monopoly on fixed-line telephone services and ownership of one of the country’s two mobile networks, it is also of vital strategic importance.
By any measure, therefore, the sale of TCI ought to offer proof of the Islamic republic’s commitment to privatization and economic restructuring.
Yet as they gaze up at the Alborz mountains from the executive suites of their new glass office blocks, Tehran’s financial elite are grimly aware that in many cases privatization is simply a cover for the redistribution of assets among other organs of the state.