On May 21, 2005, Leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei issued a decree vis-ˆ-vis Article 44 in the Iranian Constitution pertaining to the privatization of state-owned sector.
According to Mehr News Agency, Ayatollah Khamenei requested that government officials speed up implementation of the general policies outlined in the amendment of Article 44, and move toward economic privatization. The leader also suggested that ownership rights should be protected in courts set up by the Justice Ministry; the hope was that this new protection would give an additional measure of security and encourage private investment.

The leader has suggested that ownership rights should be protected in courts set up by the Justice Ministry to give an additional measure of security and encourage private investment.

The current privatization effort calls for an initial public offering (IPO) of 5 percent of the firms being privatized. Once the 5 percent is sold, it will establish a market price on which further offerings can be based. According to a study conducted by the IMF in 18 countries, privatization adds 2 percent to the government’s GDP per annum.
Under Article 44, the economy of Iran is to consist of three sectors: state, cooperative, and private; and is to be based on systematic and sound planning.
- The state sector is to include all large-scale industries, foreign trade, major minerals, banking, insurance, power generation, dams and large-scale irrigation networks, radio and television, post, telegraph and telephone services, aviation, shipping, roads, railroads and the like. All these will be publicly owned and administered by the government.
- The cooperative sector is to include cooperative companies (Bonyad) and enterprises concerned with production and distribution, in urban and rural areas, and in accordance with the Islamic criteria.
- The private sector is to consist of those activities concerned with construction, agriculture, animal husbandry, industry, trade, and services that supplement the economic activities of the public and cooperative sectors.
A strict interpretation of the above has never been enforced in the Islamic Republic but the private sector has been able to play a much larger role than is outlined in the Constitution. In recent years, the role of the private sector has been rising steadily. Furthermore, an amendment of the article in 2004 has allowed 80 percent of the state assets to be privatized.
In line with Article 44, the government also approved a plan to offer shares to low-income families, starting with the poorest. Under the ’Justice Shares’ plan, millions of Iranian families continue to receive shares in state-owned firms, the value of which will be reimbursed in 20 years from the dividends generated by those shares.
The holding period for the shares is 2 years. The project is in line with President Mahmoud Ahmadinejad’s election promise to improve the condition of the low-income strata. Ahmadinejad in July 2005 promised to distribute shares to the poor families, adding that these shares would be from the privatized companies.
Those covered by charity services rendered by the Imam Khomeini Relief Committee and the state welfare organizations were prioritized in the first phase of the justice shares initiative. In the second phase, the rural population and tribesmen will receive the shares.
Directives on identifying those eligible to receive justice shares (in the second phase) have been issued and the shares will be distributed (among the rural residents and tribesmen) after receiving their national code number. Up to 6.5 million eligible rural residents have been identified and 1.2 million more are yet to complete their documents.
The government is promoting the shareholding culture. The total number of shareholders has reached 700,000 people and this figure is expected to reach 24-25 million. In December 2006, the government informed that some 4.6 million low-income households had received justice shares worth $2.5 billion as part of the privatization scheme. Each person received around $550 in shares with a maximum of 5 payments for each family.
In February 2008, the Economic Ministry announced that some 15 million people living in rural areas are also entitled to receive justice shares this year (started March 20).
In the words of Ayatollah Khamenei, Article 44 has indeed given a new lease of life to the Iranian economy and its much needed development and growth.

Gas produced from Phase 13 of Iran’s South Pars gas field will likely be reserved for domestic use, according to oil major Royal Dutch Shell.
“It makes gas available which probably Iran may use for domestic purposes,“ Reuters quoted Chief Executive Jeroen van der Veer as saying at the company’s annual general meeting on Tuesday.
Shell had planned to develop multibillion dollar facilities to produce liquefied natural gas (LNG) from the South Pars gas field so that it could be easily transported on ships for export.
Shell, Europe’s largest oil and gas company, teamed up with Spain’s Repsol to sign a memorandum of understanding with the National Iranian Oil Company (NIOC) in January 2002 to invest $10 billion in Phase 13 of South Pars development project, known as the Persian LNG.
The oil major backtracked on the project in May, but later voiced interest in exchanging its stakes in Phase 13 of the offshore gas field with phases 20 or 21.

The First International Leather, Shoes and Bag Exhibition is scheduled to be held in Mashhad, Khorasan Razavi province, from May 26-30.
According to IRNA, the head of Mashhad International Exhibitions Organization observed that holding an exhibition would provide the best opportunities for those active in leather industry to get acquainted with one another.
“Those involved in leather, shoes and bag industry including businessmen, unions, cooperative societies, natural and artificial leather producing factories will be represented in the event,“ Mohammad Seyyedi said.
Seyyedi added that 20 foreign and domestic companies will take part in the five-day event. “Various kinds of natural and artificial leather, machinery, leather clothing, bag and leather handicrafts will be put on display at the event,“ he said.
According to Seyyedi, four delegations from Pakistan, Tajikistan, Turkmenistan and Afghanistan will also visit the exhibition.
“Bag and shoes designers will showcase their latest products in an area of 1,500 square meters,“ he said.

A successful miner should be either technically competent or financially sound if not both.

The only way to expedite economic development is by exploiting the real potentials of mines. This necessitates that banks grant facilities for investments in mining industry.
Global hike in the prices of metals and other raw materials used in the industrial sector provides a good opportunity for efficiently exploiting mines. This opportunity must be utilized in the best manner if the national economy is to witness betterment and improvement, the Persian daily ’Asr-e Eqtesad’ reported.
Deputy head of Industries and Mines Department of Khorasan Razavi province, Abol Qassem Baqeri said, “Once the required infrastructures in the mining sector are established, minerals can become a suitable substitute for oil in the national economy. Those interested in active involvement in the mining sector should possess desirable technical and financial abilities. Moreover, they should love their job.
This is something that must be institutionalized in the society.“
One major problem in most industrial endeavors is the activities of middle-men and profiteers--the worst being in the mining sector.
“Given the very nature of investments in the mining sector and the banking system’s lack of information about the real value added in this sector, banks have been reluctant to grant facilities. However, a recent Cabinet decision authorizing banks to accept mine exploitation certificate as collateral for loans, it can be expected that the situation will improve,“ Baqeri commented.
He recalled that the comprehensive plan for mine exploitations has been presented by Industries and Mines Ministry and State Geology and Mining Exploitations Organization.
“Once the budget is allocated, the plan will be implemented this year. The budget for the sector in the fiscal year 2008-9 amounts to 15 billion rials,“ he noted.
The body in charge of the plan is State Geology and Mining Exploitations Organization, which has seasoned experts and state-of-the-art laboratories. The organization should identify exploitation priorities nationwide to facilitate private investments.
Baqeri recalled that in Khorasan Razavi, the comprehensive plan takes in areas such as Kashmar, Neishabour and Torbat Heidarieh, which have high potentials for extracting copper, gold and iron.
One of the duties of the government is carrying out geological studies and general exploitations so that potential investment opportunities could be delegated to the private sector on the basis of the law.
Baqeri commented, “A successful miner should be either technically competent or financially sound if not both. This is the minimum requirement.“
Like all other industrial activities, improvement in the mining sector depends on the level of commitment of the skilled workforce.
“For favorable results, the value system of the society should be based on devotion and commitment, as otherwise, individual efforts in itself will not be fruitful,“ Baqeri pointed out.
Amid all this, it must also be understood that Ministry of Industries and Mines must purchase modern mining equipment, as productivity cannot be expected with outdated machinery.

Increased saffron production and low international demand has led to a 50-percent decline in price.
Executive director of Saffron Producers Union told Iranian Agriculture News Agency that the price per kilogram of super saffron has declined from 19 million rials to 16 million rials.
Gholamreza Miri added, “The dominant system of pricing is currently based on supply and demand so if demand goes up, price in the domestic markets will go down. Since the beginning of the harvest season there have been no major orders from European countries. However, traders in the UAE have announced that they are more than wiling to purchase Iranian Saffron.“
Last year the country exported 220 tons of saffron but this year it will be just about 110 tons.
Saffron, botanical name crocus sativus is the most expensive spice in the world. Derived from the dried stigmas of the purple saffron crocus, it takes anything from 70,000 to 250,000 flowers to make one kilogram of saffron. Moreover, the flowers have to be individually hand-picked in the autumn when fully open. Fortunately, only a little needs to be added to a dish to lend it color and aroma.

About $1 billion should be allocated annually for the next five years from the Oil Stabilization Fund to confront the impacts of drought and provide people with food security, observed deputy agricultural jihad minister for planning and economic affairs.
Sadeq Khalilian said at the annual gathering of the ministry’s provincial directors for planning affairs that the move would make up for shortages in the water and soil sector and develop irrigation and drainage methods, Fars News Agency reported.
The official said that so far sufficient fund has not been earmarked for the agricultural sector, adding that fruitful measures in the area would help the government to increase gross domestic product, reduce unemployment, raise non-oil exports, develop rural areas and keep inflation rate under control.
Khalilian stated that henceforth funds for the agricultural sector will be spent on specific and efficient projects. He stated that sustainable development and food security would not be achieved without water and soil development. “Current drought gives us an opportunity to pay more attention to water and soil projects,“ the official said.
Iran’s agricultural sector contributed more than 11 percent to the GDP in 2007 and provided employment for a third of the labor force.