Iran should inject 100 billion dollars to secure its economy

In a seminar on challenges and opportunities of the world economic crisis for the Middle East and Iran held in Kish Island in the Persian Gulf, Iranian finance minister revealed that 100 billion dollar shares of public enterprises and government companies will be sold to the private sector in near future. The plan is based on the 44th article of the Islamic Republic constitution pending for three decades, due to war economic conditions and furious arguments.

According to the finance minister, supporting national capital market, absorbing foreign investment and using diplomatic capacities are three pillars of the plan to support economy from outside negative effects.

The plan seems to be ambitious due to obstacles in and outside Iran. Privatization policy has been under attack from hardliners since the beginning of the Islamic Revolution as a sign of capitalism and monarchy return. For a longtime, Iranian outside capitals were banned from investment in Iran. Foreign investment has also declined due to economic sanctions and the increase in investment risk in Iran during the past few years.

However, Iranian Central Bank president stated in the seminar that Iranian monetary system has come under less pressure due to the sanctions employed by the foreign banks. Thus, economy remains volatile amid the government emphasize on “economic justice” and support to the poor through rationalization of subsidy system. A government plan for paying cash subsidy to poor families has come under attack by economists and faced resistance from parliamentarians in the past few months. The Islamic consultative Assembly (parliament) insists that the motion should be merged in the five year economic plan to boost the living condition and not to push up the already high double digit inflation rate.