Survival
Through Dispossession: Privatization of Public
Goods in the Islamic Republic
Kaveh
Ehsani
Since the 2005 election of President
Mahmoud Ahmadinejad, the burning economic issue
in Iran has been the privatization of public
assets and, more recently, the elimination of
subsidies for a vast array of goods and services.
Leading figures, including the Supreme Leader,
Ayatollah Ali Khamenei, have called the privatization
program “an economic revolution.”[1] But
it is not only the economy that private ownership
is supposed to rescue. There seems to be a consensus
across the political and ideological spectrum
that public ownership of economic assets is the
cause of a host of social and political ills,
from authoritarianism to corruption and nepotism.
Though the debate seems new, the
privatization of public assets has been a constant,
albeit disputed strategy of consolidation for
the Islamic Republic from the outset. Privatization
of public assets has taken place in waves, always
accompanied by a rational justification: The
privatization of public land in the 1980s was
carried out in the name of distributive justice,
while the sale of city skyline and the liberalization
of zoning laws in the 1990s were presented as
the precondition for urban renewal. The current
wave of privatization of industrial and financial
institutions is framed as the technocratic rationalization
of a hopelessly deadlocked economy. In fact,
it is only the latest in a series of enclosures
of the commons for the benefit of a select few
who happen to have, for the moment, the upper
hand in the political domain.
Cities for the Poor?
The Revolutionary Council nationalized
substantial sections of the Iranian economy in
1979. But the populist regime has never managed
to resolve the contradictions of its hybrid commitments
to Islamism and developmentalism, social justice
and cultural conservatism, and representative
politics and authoritarian paternalism. The core
issue remains one of property rights and defining
the proper boundaries of private and public.
Differences over the proper role and size of
the public sector in the economy appeared in
1979 during the heated debates over the drafting
of the new constitution. In the early days of
the new republic, radical factions demanded state
control of the economy and foreign trade, land
reform, paternalistic labor laws and the imposition
of severe limits on the accumulation of private
wealth, while their conservative rivals insisted
on the sanctity of private property in the shari‘a,
and the legitimacy of open commerce and piously
acquired wealth. Ayatollah Ruhollah Khomeini
tried to stay above the fray. While protecting
the radicals, he insisted that the economy of
the new republic had to be distinct—neither capitalist
nor socialist, but Islamic. Although vague, Khomeini’s
positions on the economy were above all nationalist,
insisting on self-reliance and independence,
and had a strong developmentalist slant.[2] In practice,
the “Islamic” aspects of the economy remain limited
to a “cooperative sector,” which has never exceeded
a minute fraction of the gross domestic product,
and the replacement of interest in finance with
“investment profits.”
For a decade after the revolution,
the land question, especially in cities, was
among the most contested issues in the Islamic
Republic. The collapse of state authority, coupled
with the populist convictions of the new regime
and spontaneous popular land occupations labeled
as “revolutionary housing,” led to the dramatic
expansion of cities. Tehran doubled in size within
two years, and Ahvaz tripled in area from 9 to
29 square miles. But only a small fraction of
this geographic expansion was confiscated private
land. The rest, more than 90 percent of
the total distributed, had been public land.
From 1979 to 1993 nearly half a million hectares
of predominantly public unoccupied land was converted
into private and cooperative residential property.
New state institutions like the Urban Land Organization
and the Housing Foundation played the key role
in this massive transfer of property. By the
mid-1980s more than 60 percent of all urban
residential land transactions were being allocated
by the state.
This large-scale transfer of mostly
public land, coupled with the absence of enforceable
regulation, transformed
Iran’s urban geography. Between 1979 and 1982,
75 percent of all new construction in Tehran
occurred outside the formal city limits, where
satellite villages were transformed into sprawling
suburbs. Remarkably, by 1986 urban housing stock
had doubled, as Housing Ministry surveys showed
that more than half of all urban dwellings in
the entire country had been built after the revolution.
It was private individuals who built these 2.3 million
new units. The state merely transferred the public
land into private hands; its share of investment
in housing construction (affordable or otherwise)
was less than 2 percent of the total after
the revolution.[3]
Aside from spontaneous occupations,
the public land privatized by the state was sold
at prices well below the market, not, as official
propaganda claims, to the most needy, but primarily
to state employees, the middle classes and people
who can only be categorized as state clients.
In the aftermath of the revolution the
dramatic expansion of the public sector had been
the main pathway of upward mobility for people
who joined the government bureaucracies and the
new Islamic revolutionary organizations. Public-sector
employment more than doubled after the revolution,
from 1.7 million in 1976 to 3.5 million
in 1986. According to one estimate, within three
years of the revolution, one in six Iranians
above the age of 15 belonged to one state and
revolutionary body or another.[4] Although public land was distributed or sold substantially
below market rates, nonetheless its sale became
an important source of revenue for the state
during the difficult years of war and international
sanctions. As a result, the greatest beneficiaries
of this privatization of public land were the
state treasury and the lucky recipients.
The scale of land distribution,
coupled with the worsening economy and wartime
population displacement, spurred a rush of urban
immigration and land speculation from 1981. The
nationalized banking sector contributed to this
speculative trend by channeling capital to the
construction and housing sectors. Subsidized
banking credit intended for low-income housing
did not benefit the poor, however, as the greatest
beneficiaries turned out to be public-sector
employees, state clients (veterans and families
of war dead) and the middle classes who could
maintain substantial bank deposits as collateral.
For example, in the provincial city of Ahvaz
in Khuzestan, between 1979 and 1988, 74 percent
of all state-distributed land plots and 91 percent
of state-built houses went to the latter groups.[5] In
smaller towns, like Ramhormoz in the province
of Khuzestan, of the 1,400 parcels of land distributed
in the same period only 80 went to war refugees
or others classified as “needy.” The rest went
to cooperatives of state employees, and to revolutionary
foundations, which in turn distributed the properties
to various public-sector employees and state
clients, primarily the families of the war dead.
These enclosures and property transfers
were condoned by the more radical factions of
the new regime, but the recipients spurred on
the state by eagerly lobbying for laws that would
finalize these privatizations. This process was
by no means smooth, and the “land question” in
its various guises remained the most controversial
topic of legal and political wrangling for years.
In an attempt to put an end to this phase of
revolutionary property transfer the state passed
a series of laws in 1986 and 1991. What had taken
place, aside from the remarkable transformation
of the urban geography of Iran, was the massive
enclosure of public land for the benefit of favored
clients. Alternative policies, such as public
housing or affordable rental housing, which would
have maintained public assets as collective goods
while dealing with the acute housing problem,
were never given serious consideration.
Vertical Enclosures
The end of the Iran-Iraq war and
the death of Khomeini soon after brought the
populist phase of the Islamic Republic to an
end. Faced with a nearly bankrupt economy and
an impoverished population, the unwieldy array
of factions that Khomeini had held together with
his personal popularity and political craft was
fragmenting fast. A major realignment, engineered
by Ali Akbar Hashemi-Rafsanjani, who had been
elected president in 1989, redefined the contours
of the Islamic Republic. Labeled “the reconstruction
administration,” Rafsanjani’s government transformed
the redistributive state of the 1980s into a
neo-liberal state capitalism by integrating various
revolutionary institutions into the state bureaucracy
and then forcing state institutions to become
economically self-sustaining. The driving force
of this new coalition was the old state class,
the technocracy and bureaucracy of the monarchy,
which had been sidelined after the revolution.
The state class offered Rafsanjani the qualified
personnel as well as a game plan for rebuilding
the economy, in the form of five-year development
plans. International organizations, notably the
World Bank and International Monetary Fund, obliged
by providing loans and developmental blueprints,
while Malaysia and China were seen as appropriate
models to emulate.
The social bedrock of this strategy
was the urban middle class, which had been battered
in the 1980s. Under Rafsanjani, the dominant
discourse of the regime changed, from privileging
revolutionary commitment (ta‘ahod) and
the poor to championing expertise (takhasos)
and the professional classes. To rebuild the
middle class the regime expanded education, especially
higher education. Universities, the strongholds
of the left and opposition forces under the Shah,
had been purged and closed down for almost three
years in the early 1980s following a violent
“cultural revolution.” But by the mid-1990s university
campuses had mushroomed across the country, and
enrollment in higher education increased from
160,000 in 1977 to 200,000 in 1988 to 1.4 million
in 2000. Sensing the changes to come, significant
numbers of the political elite, veterans and
state managers enrolled in universities to obtain
degrees. To rebuild the shattered economy Rafsanjani
embraced structural adjustment policies. State
planners included privatization as a basis of
the first five-year plan (1989–1993), although
the privatization of industrial and financial
assets remained negligible for another decade.
The Islamic Republic was ready to consider structural
adjustment, but first it had to create a loyal,
Islamic (but neo-liberal) middle class.
Within a decade after the war,
a substantial urban middle class had emerged.
This class found its political representation
in the reformist movement led by Mohammad Khatami
in the 1997 presidential election. It had accumulated
its status primarily through the cultural capital
of university and professional credentials, and
the wealth generated through speculation in urban
real estate and construction, which, unlike the
large industries and finance, had remained mostly
in private hands. Once again, the state was the
catalyst for this speculative boom, through the
privatization of the urban skyline, which, by
law, was common property.
In many ways Tehran was the laboratory
of the neo-liberal transformation of Iran during
the “reconstruction.” Mayor Gholamhossein Karbaschi’s
controversial transformation of the city in the
1990s was based on mobilizing a speculative and
entrepreneurial urban middle class that was called
upon to finance the ambitious program of urban
renewal and lend support to the political system.
Ignoring critics who objected to the “un-Islamic”
or gentrifying impact of the municipality’s public
projects—such as cultural centers, highways and
parks—Karbaschi confirmed that the municipality
was indeed introducing modern cultural practices
into urban public life. The goal was not to “Westernize”
the public, however, but “to protect them from
unregulated and corrupt behavioral models.”[6]
Unable to count on the central
government to bail it out, the virtually bankrupt
municipality had two options for raising revenues:
tax the residents or make an arrangement with
big capital, which in the Islamic Republic is
highly connected to the political power centers.
Taxation required the municipality to convince
the economically pressed and disillusioned population
to shoulder the heavy burden of financing the
capital’s renovation. Politically, such a radical
step would have been unthinkable unless the state
was willing to be more transparent and accountable
in its expenditures. Accountability would have
made Tehran’s urban renewal more democratic as
well as more politically stable, since property
taxes are largely immune to the chronic factional
struggles of the Islamic Republic.
Instead, and not surprisingly,
Karbaschi chose the second option. Financing
for Tehran’s urban renewal came from “public
participation,” a euphemism for a pact between
the municipality and speculative capital floating
in the shadow economy. The municipality decided
to extract fees and taxes from merchants and
developers in exchange for exemption from zoning
laws and protection from political pressure.
This alliance between the urban government and
speculators was presented as a win-win solution:
Urban renewal projects would jump-start the economy
using the construction sector as their engine,
with rising employment and housing supplies to
offset any potential inflationary pressures.
When Karbaschi was appointed in
1990, Tehran’s population of nearly 7 million
was growing at the pace of 100,000 per year,
demanding an additional 20,000 new housing units
annually. The city had no money; municipal services
had been badly neglected during the war. Tehran
was a polluted, spatially fragmented, overcrowded
city suffering from horrible traffic and lack
of architectural coherence. So profound was the
crisis that the government was debating the construction
of a new capital elsewhere. The structural reforms
of the municipality became the model of economic
renewal for the rest of the country. By spinning
off personnel and semi-privatizing most of the
municipal services, the new mayor balanced the
books and increased revenues, which were channeled
into development projects. From 1990 to 1998,
the municipality collected an estimated $6 billion
from Tehran’s economy, most of which was then
invested in the urban infrastructure.
Three quarters of the new revenues
came from the sale of residential permits that
were in explicit violation of zoning laws. These
violations either allowed commercial use of public
land or were generated by the “sale of density,”
which exempted developers from zoning laws by
allowing them to subdivide plots and build high-rises
well above the permitted norm. The latter, highly
controversial move was justified on the grounds
that it would boost the housing supply through
increased “vertical density.”
Regardless of its social impact,
this strategy succeeded in providing the political
stability to attract the substantial assets circulating
in Tehran’s economy to the construction sector
where, between 1987 and 1997, private investment
increased by a factor of 15, and the number of
employees nearly doubled. But this construction
boom primarily benefited the wealthier social
layers. By the late 1990s the flow of immigration
to Tehran had slowed due to the increasing cost
of living, but the capital’s agricultural hinterland
continued to morph into clusters of unregulated
satellite cities housing not only rural and provincial
migrants, but many working- and middle-class
Tehranis who could no longer afford residence
in the capital.
The municipality financed its urban
renewal project through the privatization of
the urban skyline. This strategy led to a proliferation
of high-rises, especially in the affluent north
of the city where profit rates on real estate
were significantly higher. Consequently, the
skyline came to visually recreate Tehran’s symbolic
division into two parts—the affluent north and
the working-class south. In 1992, only 20 percent
of all building permits issued in Tehran were
for buildings over four stories. By 1997, this
figure had risen to 64 percent, most of
them in the north. This trend was to be reversed
in the post-Karbaschi era.
The Post-Karbaschi Era
By 1999 the laissez faire era
of luxurious high-rises had run into difficulty
following the political trial and imprisonment
of Karbaschi on corruption charges and the election
of the first city council. The dilemmas of funding
the municipal budget and the worsening housing
crisis had become even more acute, however. Preoccupied
with national politics, even the newly elected
city council failed to consider alternative strategies
for providing mass affordable housing. After
much negotiation it was decided to allow the
municipality to continue along the same pattern
of generating revenue by privatizing public space.
The unregulated real estate boom
of the 1990s had caused considerable social outrage.
High-rises had been built with disregard for
safety codes and the character of neighborhoods.
Housing was unaffordable for the majority of
the working population. Karbaschi’s trial and
conviction, although clearly politically motivated,
only encouraged suspicion of corruption in the
municipality, where huge sums of money were floating
about with little regulation.
To quiet the outcry the municipality
shifted its emphasis from high-rises to permits
for smaller buildings at the height of four to
six floors throughout the city, also a violation
of city codes. Of course, the laws could have
been changed, but legislative debates would have
opened a can of worms. The current strategy has
“democratized” speculation: In lieu of a few
large, anonymous and politically well-connected
speculators, at present any urban property owner
can purchase a permit to build a lucrative multi-story
apartment building, while the propertiless are
increasingly impoverished due to inflation, rising
rents and a stalled economy. During Karbaschi’s
tenure, the average price of housing in Tehran
tripled. In the next five years, prices tripled
again, and they have continued to increase exponentially
since then.[7] The municipality continues to raise its revenue through an alliance
with capital, but capital of a different kind—the
petite bourgeoisie whose residences have turned
into gold mines because they can build upward
into a skyline that, by law, is public property.
The effects have been profound.
Since the 1990s, the average dwelling size in
Tehran has fallen by half, to 646 square feet,
while speculative apartment building has accelerated
considerably in the less affluent districts.
Private-sector investment in new urban construction
in Tehran increased from 5 trillion rials
($525 million) in 1998 to 19 trillion
rials ($1.95 billion) in 2002, before the
housing sector went into a slump.[8] By comparison, state investment
in affordable housing was negligible (204 billion
rials or $21 million in 1998 and 287 billion
rials or $29.5 million in 2002). As a result
the urban skyline has been enclosed into private
property for the benefit of the property-owning
urban middle class, while impoverishing the majority
of the working population. The extent to which
the propertied urban middle class is grateful
and loyal to the regime is, however, open to
question.
Privatizing Public Assets
The current debate over the privatization
of industrial and financial assets is centered
on legal interpretation of Article 44 of the
Constitution, which states that the Iranian economy
should consist of three sectors: public, private
and cooperative.
The public sector includes all
basic and large-scale industries, foreign trade,
banking, insurance, energy, dams and large-scale
irrigation, radio and television, the post,
telegraph and telephone, roads and railroads,
airlines, shipping, and so on, which are public
property under the control of the state…. The
private sector includes those segments of agriculture,
animal husbandry, trade, industry and services,
which complement the state and cooperative
sectors…. Determining the conditions, limits
and rules of property in these three sectors
will be determined by law.
The constitution etatized the economy,
while leaving room for multiple interpretations
of the boundaries of property relations, notably
the equation of “public” and “state” property,
which blurs the distinction between the two.[9] According to current policies,
public goods, which belong equally to every citizen
and to future generations, and are held in custody
(but not owned) by the state, are to be transformed
into the private property of individuals. In
the spring of 2005, shortly after Ahmadinejad’s
electoral victory, Ayatollah Khamenei issued
a directive reinterpreting Article 44 with the
following explicit purpose: “To speed up national
economic development; expand ownership among
the populace with the purpose of assuring social
justice; improve the efficiency of enterprises;
enhance economic competition; reduce the fiscal
and administrative burdens of the state; improve
employment and income for the population; and
encourage the people to invest and save.”
This directive seems to reverse
the limits set on the private sector in the constitution,
with the first clause explicitly allowing the
private sector to enter the constitutionally
prohibited key sectors mentioned in Article 44.
The government was ordered to reduce its share
in “non-essential” sectors annually by 20 percent
and to privatize some 80 percent of its
assets in “essential” sectors—mining, heavy industry,
downstream oil and gas, banking, insurance, energy,
communications and even some military industries.
If actually carried out, these
policies would indeed precipitate a neo-liberal
economic transformation not dissimilar to the
Egyptian infitah or, more disturbingly,
given Iran’s international isolation under sanctions,
Saddam Hussein’s selloff of the Iraqi public
sector in the late 1980s.[10] Given the absence of
transparency and accountability, in all likelihood,
“privatization” of public assets will replace
state monopolies with equally unaccountable private
monopolies and multi-national capital, without
necessarily benefiting “the public” in a discernible
way. The state dominates the Iranian economy,
and ironically this domination has been increasing
since 2005. Currently there are more than 500
major state-owned corporations, which in turn
are comprised of more than 16,000 subsidiaries.[11] In recent years, state corporations have taken up to
a 76 percent share of the total national
budget and two thirds of the GDP. The 2007–2008
budget designated $7.8 billion in state
assets for privatization, $3.3 billion to
be sold to “the public,” with another $3 billion
to be transferred to pension funds in lieu of
government debt.
The present privatization drive
has generated contention between the government
and its opponents, within the Majles, the Guardian
Council and the Expediency Council, at various
think tanks and in the press. Little of this
debate, at least within the corridors of power,
has been about the legality or the logic behind
the policy. Instead, the focus has been on the
mechanisms of evaluation and the marketing of
the assets. Some critics have challenged this
program by drawing comparisons with the experience
of “shock therapy” in the former Soviet bloc.[12] Others, notably in the online
political economy journal Alborz, have
argued that, in the absence of strong regulations
and a transparent and accountable legal system
that can resist political interference, replacing
state ownership with private property will amount
to replacing one type of oligarchy with another,
a state mafia with a private one.
“Justice Shares”
In a controversial move, Ahmadinejad’s
government has insisted on allocating up to 40 percent
of the public assets lined up for privatization
to low-income people and state dependents. In
Ahmadinejad’s first two years in office, nearly
6 million people, including pensioners,
state employees and the registered low-income
deciles of the population, received the equivalent
of $2.5 billion in stock in various public
corporations under the rubric of “justice shares.”[13] This
program has come under severe criticism from
both liberal and conservative proponents of the
privatization program. The government is claiming
that the poorest 10 percent of the public
are receiving stocks and dividends. Severe poverty
has become an acknowledged crisis in Iran, with
an official 8 million people living below
the poverty line.[14] Since there are no reliable statistics to
determine who falls within this category, it
is clear that the administration is using politically
connected distributive institutions, such as
the conservative Imam Khomeini Relief Foundation,
the Basij militia and pensioners, as its database
for doling out stocks and dividends. Recipients
have been handed stocks worth an average of 20 million
rials ($220), hardly a remedy for severe poverty.
Aside from doling out dividends
on stock of public companies whose profitability
is questionable at best, this “privatization”
is modeled on the disastrous voucher distribution
programs of Russia and Czechoslovakia in the
1990s, which, at least in the case of Russia,
led to the rise of the oligarchs.[15] These impoverished recipients can be used
to form reliable voting blocs or as tools of
repression of dissidents and popular disturbances.
As in Russia, a few well-connected actors can
quickly pool at bargain prices the nearly worthless
stock widely distributed among a poor and vulnerable
population and use it to create corporate empires.
Despite vociferous objections from the Majles,[16] the government is continuing
with its distribution of “justice shares,” at
least until the presidential election on June 12.
Privatization Proper?
While the government’s policy regarding
“justice shares” is unabashedly populist, the
same can also be said about the entire program
of privatization as currently formulated. While
few would dispute the fact that the state’s economic
record is poor, to lay the blame for this performance
on the question of ownership alone, rather than
the highly politicized environment of the economy,
is disingenuous. While the state controls two
thirds of the Iranian economy, the private sector
does control the other third.[17] The
key blockage in the Iranian economy is political,
rather than juridical or economic. The state
sector is neither transparent nor accountable
nor competitive. If the genuine aim of the state
is to jump-start the economy by enhancing the
private sector, the state could accomplish this
task by removing the impediments to existing
private enterprise, while simultaneously weaning
state managers from the protective subsidies
that put the private sector at a disadvantage.
According to the World Bank, overall,
Iran is number 142 out of 189 countries in terms
of ease of doing private business.[18] If the treatment of the actually existing
private sector is an indication, then further
neo-liberal attempts at privatization should
be treated with skepticism. In 2005, in an attempt
to reduce red tape, the government contracted
a number of young certified notaries to open
some 200 “communications services offices” throughout
Tehran, to act as intermediaries between the
public and the state by handling an array of
services, including payment of utility bills
and issuing of passports, driver’s licenses and
birth certificates. This micro-scale privatization
is of great convenience in a sprawling metropolis
where one has to stand in interminable lines
across the city to get the simplest task done.
Yet, already, 70 of these offices have shut down
and many of those that remain are on the verge
of going out of business. They were contracted
to receive a 12 percent commission on the
services performed, but instead are paid 2 percent.
They have to open their books to multiple suspicious
inspectors from numerous agencies, instead of
a single inspector, as agreed. The notaries established
their own trade union, codified their rules of
conduct and commissioned appropriate business
software for their computer networks. But the
state disbanded their union and established its
own rival “guild.”
The privatization of large-scale
public enterprises has also been plagued with
problems. At present, at least 20 percent
of the companies slated for selloff are officially
loss-making. While the rest have earned an average
profit of 5.5 percent in recent years, that
figure does not take into account the extensive
political and economic incentives and monopoly
protections that they enjoy. Furthermore, an
estimated 85 percent of Iran’s stock exchange
is dominated by state agencies or the non-governmental
public sector,[19] which
encompasses pension funds, the Social Security
Organization, various foundations and municipalities.
Many of the nominally major private enterprises,
such as the automakers Iran Khodro and Saipa,
or the nominally private banks, like Parsian
or Pasargad, are in fact part of a shadow public
sector, as they are mostly owned by other non-governmental
public enterprises, or directly by the state
itself. As a result, “in Iran the public sector
reproduces itself regularly, even via privatization.”[20] The management of all these companies remains
in the hands of state-appointed boards and CEOs,
meaning that the few genuinely private investors
who enter the market have no hope of exercising
control.
As a result of uncertainty about
the actual worth of these enterprises, not to
mention a sense of insecurity regarding the political
and economic environment, the private sector
has been highly reluctant to buy these shares.
On the occasions when state enterprises have
been privatized, the results have often been
questionable. Witness the 2003 “privatization”
of Sadra, the country’s largest shipbuilding
conglomerate, employing 2,500 permanent personnel
and 3,000 contractors, and owning a range of
additional businesses in construction, oil and
gas. The largest privatization to date when it
took place, Sadra was sold to a series of shareholders,
including 21,000 small private buyers (who purchased
17 percent of the stock), as well as major
non-governmental public enterprises, such as
two investment companies belonging to Bank Melli
(48 percent). Within two years of privatization,
Sadra’s profits had plummeted by 90 percent.
Like most other large industries in Iran, Sadra’s
sole client is the state. Its “privatization,”
even though it was sold to a semi-public entity,
brought it into disfavor with the political decision-makers
who, despite Sadra’s competitive tenders and
track record, favored its rival, Qarargah-e Khatam-ol
Anbia, the (non-governmental) public construction
business arm of the Revolutionary Guards.[21]
In July 2006, a Majles commission
looking into the Privatization Organization,
the institution in charge of the process, complained
that “many activities of this organization cannot
be classified as privatization. In some privatized
enterprises the buyer has fired the workers,
changed the land-use title of the property, sold
the assets and speculated on the real estate.
Our priority is increasing employment and production.
This is not proper privatization.”[22] The Chamber of Commerce has
also complained that the state is trying to reduce
its deficit and, as a result, overprices its
assets, thus scaring off private buyers. The
newly proposed and highly controversial labor
law, which permits the layoff of workers at the
mere suggestion of employer discontent, is also
an indication that the privatization scheme is
aimed at benefiting select groups of politically
well-positioned actors, who will be able to obtain
favorable credit through state-owned financial
institutions, deal as they like with the employees
and do as they please with the assets. The key
issues plaguing the economy, such as unemployment,
rising poverty and income inequality, repression
of working people’s self-representation, political
control of the economy and constraints on the
actually existing private sector will not be
solved by schemes such as the “justice shares”
or neo-liberal privatization.
There are no intrinsic “public”
qualities to any of the three forms of property
specified in the Islamic Republic’s constitution.
Property is not a natural, but a political
arrangement. Since the revolution of 1979, a
struggle has raged over the meaning of the public
domain—whether it means “state property” or whether
the notion of “public” should not be easily alienable,
even by the government, as it comprises resources
held in the interest of all citizens and future
generations. The process of permanently enclosing
these commons for the benefit of private individuals
as well as the state is equally a political act
of significant consequence. Under the Islamic
Republic, enclosures have been carried out in
the name of social justice, but in fact they
have enriched the state and select social groups
who lent their support to the political establishment.
In the era of modern capitalism, the enclosure of the commons lies at
the origin, often violent, of new cycles of accumulation
by newly emerging dominant classes. Thus it is
in the Islamic Republic of Iran today.
Endnotes
[1] Etemad,
February 29, 2007.
[2] See
the fascinating interpretation of Khomeini’s position
on the economy by Mohsen Rezaei, the retired Revolutionary
Guards commander, writing under the pseudonym,
Mohsen Mirqa’ed, “The Foundations of the Model
of Economic Development from the Perspective of
Imam Khomeini,” Ettelaat, August 2–11,
1992. [Persian]
[3] Kamal
Athari, “Sanjesh dar andakhtan-e tarhi no-e,” Goft-o-gu 39
(March 2004) and “Bakhsh-e maskan dar Iran,
bazar ya barnameh?” Iran Farda 7 (July 1993).
[4] Farazmand, The
State, Bureaucracy and Revolution in Modern Iran (New
York: Praeger, 1989), p. 187.
[5] M. A. Mowlazadeh, “Evaluation of the Post-Revolutionary Urban Land
Policy in Iran,” unpublished Ph.D. dissertation,
University of Glasgow, 1991, pp. 169, 173–183,
200–202.
[6] For
details, see Kaveh Ehsani, “Municipal Matters:
The Urbanization of Consciousness and Political
Change in Tehran,” Middle East Report 212
(Fall 1999).
[7] See
Azam Khatam and Fardin Yazdani, Garayeshha-ye
Toelid-e Maskan va Jam‘iat dar Tehran, Center
for Urban and Architecture Research and Study,
Ministry of Housing, 2005; Fardin Yazdani, Tarh-e
Tahqiqi-e Siasatha-ye Zamin dar Iran, Ministry
of Housing and Urbanism, 2005. See also Eqtesad-e
Maskan for more recent trends.
[8] Bank
of Iran, Economic Trends and Statistics (1381),
available at http://www.cbi.ir/simplelist/1800.aspx.
[9] See
Carol Rose, Property and Persuasion (Boulder,
CO: Westview Press, 1994), chapters 1, 2 and 5.
[10] See
Marsha Pripstein Posusney, “Privatization in Egypt,” Middle
East Report 210 (Spring 1999); and Christopher
Parker and Pete Moore, “The War Economy of Iraq,” Middle
East Report 243 (Summer 2007).
[11] These
and the following figures are taken from various
Iranian government statistics and studies.
[12] See,
for instance, Ahmad Maydari, “Yek naqd va yek pasokh
dar bareh ketab-e khosousisazi-e mardomi,” Majles
va Pajouhesh 12 (2005).
[13] Ettelaat,
October 3, 2006; Ettelaat, October 11,
2006; Etemad, March 5, 2007.
[14] Etemad
Melli, September 18, 2006.
[15] See
Marshall Goldman, The Piratization of Russia (London:
Routledge, 2003); and Stephen Kotkin and A. Sajo,
eds., Political Corruption in Transition (Budapest:
Central European University Press, 2002).
[16] Donya-e
Eqtesad, December 24, 2007.
[17] Ettelaat,
October 29, 2006.
[18] World
Bank, Doing Business in Iran (Washington,
DC, 2009).
[19] Ettelaat, September 25,
2006.
[20] Ali
Nassiri Aghdam and Mohsen Fatehizadeh, Does
Privatization Reduce the Size of the Public Sector?,
unpublished paper, 2008.
[21] See
Ahmad Maydari, “Good Governance or Privatization?
The Case of the Sadra Company,” Goft-o-gu (forthcoming
2009); and the fascinating interview with Jalil
Khobreh, the CEO of Sadra, in Donya-ye Eqtesad,
August 4 and 5, 2006.
[22] Sharq,
August 16, 2006.
