Wednesday, July 12, 2006

"Privatisation" in Iran!

A little while ago, I posted a short piece on the Iranian command economy. During the last few days, there have been other developments in Iran too. The supreme leader issued a decree, paving the way for a massive " privatisation" programme in Iran. If you look at Iranian papers, you sould see articles after articles, calling it a historical decision, which would change the face of the country*. Up to 80% of the state enterprises- with a few exceptions- should be sold off to the private sector. I did a little exercise though. Obviously, this policy is not new in the country, it has been going on for a while. At the time of writing, we have an estimate of the total value of the state assets to be sold off, roughly $110 billion. On the other hand, if you were to take the annual average value of assets sold off in the period between 1991-2006 to the private sector and stimulate it forward, the completion of this project would take 535 years! As someone who is not so keen on the privatisation programme, I am glad that I would be gone by then!!

* I am old enough to remember that the late Shah also used to issue " historical decrees" too! What a coincidence!