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Dr. Rachel Ehrenfeld Headshot

Ahmadinejad -- the Economic Reformer

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On September 9, Iran will stage one of its biggest economic shams, seemingly selling fifty percent of its telecommunication company, Iran Telecom (TCI), to private investors. The well-advertised "privatization" of the company, described as "the biggest of its kind in the history of Tehran Stock Exchange," is expected to fill Iran's depleted coffers with $7.9 billion. In addition, Iran plans to privatize 230 companies in the coming year.

Could this be the controversial, newly elected Iranian president Mahmoud Ahmadinejad's plan to remake his image as an economic reformer? Is he really selling off the control over the telecommunications services, including domestic and international telephone and mobile, telegraph, data transmission, and radio paging services? Moreover, this is the national telecommunications system he and his goons were unable to stop from broadcasting to the world dramatic photos, videos and messages of the brutal crackdown on demonstrations following his fraudulent re-election.

Dictators do not give up such important controls. So, who are those investors that Iran's Privatization Organization "previously approved technically and financially"?

Ahmadinejad's privatization is no laissez-faire style capitalism. If the past is of an indication, Iran's latest privatization sham is designed to consolidate the Islamic Revolutionary Guard Corps' (IRGC's) power over Iran's state controlled economy.

The Ayatollah Khomeini created the IRGC in 1979 after the successful takeover of Iran by the Islamic Revolution. The IRGC's early mandate was to defend the Islamic Revolution from within and without. But, over the years, it expanded its security role to control most businesses. The IRGC controls all strategic industries - including nuclear, weapons, transportation, shipping, energy, commercial services, banks, clinics, and even the black market industry. What the IRGC does not control on behalf of the State is owned directly by the state.

The forthcoming "privatization" of TCI demonstrates that Ahmadinejad, himself a former IRGC member, is now working to strengthen the IRGC's power over all state assets, putting his former radical comrades in charge.

As in previous "privatizations," domestically, the shares are sold to different companies and individuals whose names mean nothing to non-Iranians. Nevertheless, those familiar with Iran can attest that these are minimally veiled fronts for the IRGC.

A few foreign investors have been also pre-approved to buy some of TCI's shares. Undoubtedly, pragmatic European companies in Germany, Italy, France and England would be pleased to use the pretext of this new "wave of privatization" to bolster their business with Iran.

The U.S. designated Iran as a state sponsoring terrorism on January 19, 1984. Incredibly, it took the U.S. more than thirteen years to identify the IRGC and some - not all - of its affiliated entities as supporting terrorism.

Judging by Obama Administration's efforts to find "mutual interest" to start a dialogue with disinterested and contemptuous Tehran, perhaps the TCI privatization would be enough of a "reform" for Washington to beg Iran again to come to the negotiation table.

Instead, it is time for the U.S. to follow the money trail and to accurately identify all Iranian linked businesses and organizations as assets of the Iranian state. The U.S., preferably with some allies, should then stop the money flow that allows Iran to develop its nuclear weapons, arm itself and its many subversive groups and terrorist organizations the world over.