Privatization or Exclusive Ownership
According to recent reports by Iran Gate, a decision has been approved by the leaders of the three branches of government, which has sparked a strong reaction from economic experts and activists in this field. According to this decision, the government is required to sell, transfer, or lease properties and assets that essentially belong to all citizens. Economists believe that this action is motivated by the need to cover budget deficits and compensate for government imbalances, and it cannot be considered as a resource generator.
In the first part of the file, the government’s plan for resource generation was discussed in terms of how governments cover budget deficits. The methods of generating these resources and the consequences of using them were also explained. In summary, it can be said that the government always reaches into the pockets of ordinary citizens to cover its deficits.
The simplest solution that can be pursued by any government is the mechanism of printing money or printing powerful money, which ultimately leads to the intensification of the devaluation of the national currency. The second part of this file delves into the details and consequences of the so-called resource generation plan in the country’s economy.
What does the government mean by resource generation?
Tasnim News Agency, which has been a staunch supporter of the Ibrahim Raisi government and has defended all the policies of the thirteenth cabinet, has presented an interesting and at the same time strange definition of the government’s asset generation plan. Tasnim writes that the concept of asset generation for the government is to identify unused assets or assets with low added value and productivity that have been neglected for years and are not being optimally utilized, in order to optimize these assets.
Tasnim continues to write that asset generation for the government has been experienced worldwide and efforts are being made in many developed countries to make government assets productive. These assets are for the current and future generations, and it is not the case that we feel government assets are only for the current period. These assets, like oil, are intergenerational capital and efforts should be made to optimally utilize them.
The phrases used by this news agency to undermine the asset generation plan are exactly in line with the recent statements made by Ibrahim Raisi. But do the claims made by the government about this plan have any basis in reality or not?
The government’s plan is in the experimental stage.
As mentioned in the first part, this plan is being implemented by the government to cover the budget deficit. In other words, the government is unable to pay its employees’ salaries and benefits, as well as cover its current expenses. After depositing funds into the central bank, it now intends to sell public assets.
However, there are key points in this plan that have raised concerns among economists and experts. One of these points is the concept of self-generation, which means that the government intends to transfer part of its assets to what is called the private sector in order to benefit from its returns. Additionally, the heavy burden of current expenses of these entities will be taken off the government’s shoulders. Initially, this action seems logical considering the imposed sanctions on the government, but what is the reason behind the objections and criticisms of experts, economists, and even real actors in the private sector?
The reality of the situation is that the government, over the past 17 years since the approval of the privatization law in 2005, has taken steps to undermine a group of stakeholders who have proven their loyalty to the government. In fact, what has been done has had no resemblance to privatization and can be considered as a series of actions to allocate resources and assets to the government.
The dark record of privatization worldwide
Now there is fear that the privatization plan would be a complement to the same law that resulted in major disasters in the Iranian economy. Although privatization has been implemented in countries that gained independence after the collapse of the Soviet Union, such as the Czech Republic, Ukraine, and even East Germany, with great success, the same pattern has led to the formation of an oligarchic class in countries like Russia, Belarus, and Azerbaijan, who still hold direct power or have significant influence in the political power acquisition process, even after more than 30 years since the collapse of the Soviet Union.
Decoding with the help of global experience
Persian
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