Privatization has been one of the most significant economic policies of Iran’s regime over the past three decades. Regime officials have repeatedly presented this policy as a way to reduce the size of the government, increase efficiency, and strengthen the private sector. However, statistics published by official institutions show that a large portion of these transfers has been made not to an independent private sector but to entities affiliated with the ruling establishment, often through debt settlements. An examination of official data and recent examples of asset transfers presents a different picture of the privatization process in Iran.
Privatization and the Real Share of the Private Sector
The privatization policy entered a new phase on a large scale in 2005 following the implementation of the policies associated with Article 44 of the Constitution. Under these policies, approximately 80% of state-owned companies were supposed to be transferred to the private sector.
However, official statistics published in recent years indicate that the share of the private sector in these transfers has been very limited. On June 7, the state-run Jahan-e Sanat newspaper, citing data from the Privatization Organization, reported that of the total 78.36 quadrillion rials in transfers carried out between 2011 and 2024, approximately 44.98 quadrillion rials were conducted through debt settlements. This figure represents about 57% of all transfers.
Abdolnasser Hemmati, the former Minister of Economic Affairs and Finance, stated in November 2024 that only 11% of transfers had been made to the private sector. According to him, 29% of transfers went to public institutions, while 56% were carried out through debt settlements.
These statistics indicate that the majority of the privatization process has not resulted in the transfer of ownership to independent investors but rather in the redistribution of assets among various entities linked to the ruling structure, including the Islamic Revolutionary Guard Corps (IRGC).
Debt Settlements: The Main Mechanism of Privatization
One of the principal methods used in privatization over recent years has been the transfer of state-owned companies and assets through debt settlements. Under this mechanism, the government transfers shares of state-owned companies to creditors instead of paying its debts in cash. A recent example of this process became public in February 2025, when the state-run Mehr News Agency reported the transfer of portions of the shares of Mobarakeh Steel Company of Isfahan and the National Iranian Copper Industries Company to Astan Quds Razavi, a Mashhad-based religious endowments that acts as one of the regime’s economic power centers.
According to published information, these transfers took place after efforts to sell the shares on the market failed. The shares were subsequently transferred to Astan Quds Razavi at prices below their nominal value. Reports indicate that Mobarakeh Steel shares were transferred at approximately 48% of their value, while shares of the National Iranian Copper Industries Company were transferred at around 50% of their value. Most of the payment for these transactions was carried out through offsetting claims and debts, with only a limited amount paid in cash.
The Impact of Privatization on Labor and the Economy
Critics of privatization in Iran argue that this policy has often been accompanied by a decline in job security for workers. In a number of transferred enterprises, employment structures have been altered, with temporary and subcontracted positions replacing permanent employment.
At the same time, various reports point to increasing economic pressures on households, declining purchasing power, and a widening gap between incomes and inflation. Economic experts have repeatedly warned about the effects of budget deficits, monetary expansion, and inflation on people’s livelihoods.
Alongside these issues, the transfer of profitable state-owned assets to public and quasi-governmental institutions remains one of the central controversies surrounding privatization in Iran. Official statistics show that a significant portion of these transfers has gone to organizations that continue to maintain ties to the ruling establishment.
On February 11, 2025, the state-run Mehr News Agency reported the transfer of shares in Mobarakeh Steel Company of Isfahan and the National Iranian Copper Industries Company to Astan Quds Razavi.
An examination of official statistics on privatization shows that the majority of transfers over the past three decades have been carried out through debt settlements or transfers of assets to public institutions. While the stated objective of this policy was to expand the role of the private sector in the economy, the available data indicates that the share of the independent private sector in these transfers has been limited. As a result, privatization remains one of the most controversial economic issues in Iran, and there is widespread disagreement regarding its actual outcomes.
