to Privatize Iran's Oil Industries
Persian Text متن فارسی
The idea of privatization of Iran's oil industries is not anything new. The same way the idea of nationalization of Iran's oil was not anything new at the time of Mossadegh and actually nationalization was even executed long after Mossadegh's fall from power. Nationalization of oil industries was something needed not only in Iran of 1950's but also in the Middle East and elsewhere in the world including Latin America. The same can be said today about the need for privatization of oil industries in Iran regardless of who seriously follows through with the initiative to make it happen.
The reality is that the economic crisis that Iran has been facing is not just because of the intensification of sanctions on Iran during the last decade, and the stagnation of Iran's oil industries has been with Iran for a long time. The issue is a structural problem related to this main industry of Iran -- namely the oil industries. Iran's private capital has grown in the last half century to new dimensions but it has been mostly limited to imports and to a lesser degree to the internal manufacturing. The oil business which comprises more than 90 percent of Iran's economy has been kept out of the reach of private capital, whether under Islamic Republic or under the Shah.
The private capital in Iran has reached the critical mass to allow it to play a major role in the oil industries and such privatization can help Iran to get out of the current financial crisis. Such an effort can be done piecemeal. For example, 40 percent of the industries related to oil business can be immediately opened to private capital and the other 60 percent can be tendered in the following years. This way the oil sector can be revamped not only to improve the internal refinery and production but also to create new private initiatives worldwide to sell Iranian oil in international markets.
Such structural changes in Iran's oil business are vital for
Iran to allow it an exit strategy from current crisis to face the challenges it
is facing in the global economy.
Hoping for a democratic and secular futurist republic in Iran,
Sam Ghandchi, Editor/Publisher
March 23, 2014