Azerbaijan, Baku, Sept. 16 / Trend, S. Isayev
After purchasing the companies bellow the market price, and stripping the purchased companies of all valuable assets, the IRGC can re-privatize them at market price and benefit financially, Senior Fellow at Foundation for the Defense of Democracies, Ali Alfoneh told Trend.
"IRGC can also allow other IRGC front companies to purchase these companies in order to maintain control," he underscored.
The expert was commenting on the future of IRGC since the change of presidency in Iran.
Some analysts believe certain projects in Iran's energy and construction sectors would not develop further without IRGC's involvement, as Iranian private sector's capacities are limited.
Alfoneh said that ever since the election victory of President Rouhani, there has been a significant increase in public criticism of IRGC intervention in the economy.
"The main themes raised by the critics are the IRGC's poor performance in development of offshore oil and gas sector, and complains from the private sector, which accuses the IRGC of unfair competition," he said.
Board member of Tehran Chamber of Commerce, Industries & Mines, Hamid Hosseini said in August that Iran's privat sector has the capacity to replace armed forces in economic activities.
Hosseini noted that if the armed forces, namely IRGC can accept working under equal conditions with private sector and not compete against it, then their presence can be effective.
Earlier in August, Iranian media outlets quoted Chief of the General Staff of the Armed Forces of Iran, General Seyyed Hassan Firouzabadi saying that Iran's Armed Forces are ready to withdraw from economic activities if the government doesn't need their facilities.
Firouzabadi in particular said that the armed forces have not entered economy activities to earn income and are not competitors for domestic producers.
"On one hand, IRGC says that no private sector company is capable of undertaking large infrastructure projects hitherto conducted by the IRGC, but the other hand the IRGC has readily expressed its will to re-privatize some of the companies it has purchased through the Tehran Stock Exchange," Ali Alfoneh said.
He further said that the government of Iran is likely to to demand de-listing of the re-privatized companies from the international sanctions regimes, arguing that those entities are no longer owned by the IRGC.
"The net result would not constitute financial losses to the IRGC," he said.
IRGC's role in Iran's energy and construction sector has been increased during the presidency of former Iranian president Mahmoud Ahmadinejad. At the same time, Iranian experts and some officials have criticized the military forces for entering Iran's economic activities.
For example, Iranian conservative MP Ahmad Tavakoli has said that military forces are the competitors of Iran's private sector and prevent development of this sector.
Iran's major economic entity, the Khatam al-Anbia construction firm, belongs to IRGC, which won hundreds of lucrative government contracts, including more than $25 billion worth of oil contracts (until June 2011).
Khatam al-Anbia has also billions worth of contracts in construction, telecommunication, power generation, pipeline construction, gas and banking sectors.
According to Khatam al-Anbia's official website, this entity has finished construction of 1,836 projects, while it has 288 uncompleted projects.
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