Sunday, October 03, 2004

Iran removes barriers to large-scale privatisations

Iran removes barriers to large-scale privatisations: "Iran removes barriers to large-scale privatisations
TEHRAN, Oct 3 (AFP) - Iran's most powerful legislative body has decided to remove constitutional barriers to large-scale privatisations in an effort to shake up the lumbering state-dominated economy, press reports said Sunday.

The Expediency Council, the Islamic republic's final arbiter of legislation, ruled that the reformist government could go ahead with privatising sectors of the economy protected by two articles in the constitution.

"In order to bring about economic development and prevent further losses to the national economy, the government is authorised to cede large industries and those mentioned in Articles 43 and 44 of the constitution to the cooperative and private sectors," the Expediency Council said.

The concerned sectors that had been protected by the post-1979 constitution are banking, transport, downstream oil and gas production, insurance, telecommunications and shipping.

Article 43 of the Iranian constitution, put together after the 1979 Islamic revolution, stipulates "economic independence", the "prevention of foreign domination over the economy" and "the provision of basic necessities to all citizens".

Article 44 refers to the sectors to remain under state control. It also includes radio and television, which was not referred to in the Expediency Council's ruling.

The decision by the council, which is headed by former president Akbar Hashemi Rafsanjani, a pragmatic conservative, gives a rare boost to the liberalising agenda of reformist President Mohammad Khatami.

The privatisation drive is enshrined in Iran's fourth five-year economic plan (2005-2010), which has met stiff opposition in parliament since hardliners took control of the legislature in May.

The five-year economic plan had been approved by deputies in the previous parliament, but was blocked by the Guardians Council -- a body that vets all legislation -- on the grounds that it was unconstitutional.

The dispute left the decision in the hands of the Expediency Council, whose decision is considered as final.

The council called on the speaker of parliament, Gholam Ali Hadad-Adel, to now forward the five-year plan to the government so it can be put into practice.

But exact details of the planned privatisations have yet to be worked out, meaning more conservative resistance could be encountered.

Deputies have already voiced opposition to foreign banks opening branches here, as well as moves to allow foreign oil companies to directly tap oil fields they have discovered.

Furthermore, parliament has passed a bill giving itself veto power over an airport and telecommunication contracts signed with Turkish companies, forcing Khatami to postpone a visit to Ankara.

The government has set itself an objective of selling six billion dollars of state assets before March 2005, and this month wants to sell off 570 million dollars of assets in heavy industry."

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