Iran Economy NewsCorruption in Iran Spiraling Out of Control

Corruption in Iran Spiraling Out of Control

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According to the Iran regime’s media reports, the 2021-2022 public-private partnership bill will pave the way for legalized corruption in the coming years.

The 2021-2022 budget bill has run into problems. Serious doubts about the realization of the budget line to the staggering increase in taxes and sales of government assets and the scandals over rising prices of energy carriers and the impact of removing preferential currency from some imported goods account for this.

Moreover, another case that has become a source of great concern among the regime’s economists is the so-called ‘Public-Private Partnership Bill’.

According to the regime’s media and Ahmad Tavakoli’s ‘Transparency and Justice Watch Organization,’ the ‘public-private partnership bill’ is currently being pursued under two parallel axes in the Iranian parliament. Tavakoli belongs to the regime’s principlist faction close to supreme leader Ali Khamenei.

First, in the 2021-2022 Budget Consolidation Commission, under the note of the four budget laws of 2021-2022, Ebrahim Raisi’s government intends to recognize transfers to the private sector.

Secondly, in the Civil Commission of the regime’s parliament, it has been decided to review and decide on the bill proposed by the regime and instructions by the Planning and Budget Organization.

According to this instruction and note, some 86,000 projects are to be selected within two months of the date of the budget announcement, without even specifying the mechanism of this selection and even though the owners of these projects must submit these projects within one month.

‘Transparency and Justice Watch’ quotes Ahmad Tavakoli as saying that the corruption that is being observed now has started from the top of the regime and should be pursued by the officials and agencies in charge of monitoring and dealing with those who are corrupt.

On November 2, 2021, the state-run daily Shargh wrote, “The background to the Public-Private Partnership bill shows that it was drafted by a group of profiters so that they can institutionalize corruption, graft, and discrimination in the legislative and executive process through legislation. According to official statistics and statements, there are more than 86,000 semi-finished construction projects in the country. Ten billion rials in credit was allocated to complete each one.”

The report says that no government can bear the cost of completing these projects, so under this pretext, they try to hand them over to their friends for a small price, which is the source of disputes and conflicts of rival mafia currents.

Mohsen Renani, a regime economist, said that considering the amount of debt owed by the government and the prospect of a huge budget deficit even with the help of oil and tax revenues, the regime cannot complete these projects.

Renani concludes that in this case, it is ‘rational’ to create a process as soon as possible so that some of these semi-finished projects could be transferred to the private sector or even to foreign investors, and they try to complete these projects.

On the surface, it seems that this might work, but the problem occurs when according to Renani’s remarks and as the regime’s Court of Audit has reported,  several of these transfers to the private sector (meaning companies affiliated with the IRGC), are 68 percent corrupt.

Renani mentions Moghan Animal Husbandry as an example, whose real value was 40 trillion rials, but the regime’s profiteers estimated falsely its value to be 18 trillion rials, and it was handed over to some of the regime’s elements under the pretext of privatization.

Renani also pointed to the period from the beginning of privatization in Iran in 1991 to the end of 2019 and concluded that 900 government-run projects and enterprises have been transferred to the private sector, the total value of which is currently estimated at 7,200 trillion rials.

He cites a report by the Court of Audit of 2018, when several major examples of corruption in the privatization of state-owned companies were highlighted, with the lowest level of corruption standing at 52 percent of the wealth of these companies.

Considering this percentage of corruption in 30 years after the Iran-Iraq war, the equivalent of 3,740 trillion rials of the wealth of the Iranian people has been looted by those in power.

According to him the ‘Public-Private Partnership’ bill, which is currently being quietly approved by the regime’s parliament, could create corruption equivalent to 15,600 trillion rials in the country, which will flow directly from the pockets of the Iranian people into the pockets of the corrupt officials.

He estimated that this amount was equivalent to four times the corruption of the privatization policy over the past 30 years leading up to 2019.

Farshad Momeni, a regime’s professor of economics, said that the so-called ‘public-private partnership bill’ would take the most corrupt part of the government (i.e., ‘government transactions’) to darker chambers of the government and will quietly attach this wealth of the people to the wealth of the regime’s nobles.

Quoted by the regime’s state-run news agency ILNA on March 21, 2021, he warned, “According to the Organization for Economic Cooperation and Development (OECD), public transactions, which have an annual value of nearly 20,000 trillion rials in the country, have the highest volume of bribes exchanged among the eight branches of government and equivalent to 57 percent of total government bribes.”

Some of the regime’s economists said the negative consequences are no less than the possible consequences of a 25-year contract with China.

The amount of corruption in this bill is so huge that Renani said, “The scale of corruption in all privatizations in the 30 years after the war (with Iraq) is roughly equivalent to a banknote going  1,440 times around the earth. It can be said that the ‘public-private partnership’ bill, which is now being passed quietly in parliament, has a ‘corruption capacity’ equivalent to 6,000 banknotes around the earth, i.e., more than four times the total privatization corruption of 30 years after the war.”

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